Preoccupations: Older, Unemployed, and Landing the Job

In 2011, I was an account executive with Scor Global Life Americas Reinsurance Company, in Plano, Tex., near where I live. When Scor acquired Transamerica Reinsurance, I was laid off along with several other people that October.

At that point I called Mike Pado, a former colleague at Scor who had left the company several months earlier for a job as president and C.E.O. of Aurigen USA Holdings. Aurigen is based in Bermuda, and Mike had been hired to look at starting a life reinsurance company in the United States.

Mike, who works out of Red Bank, N.J., was still in the planning stages for the new venture when I spoke to him. He said that at some point he’d need a person who knew the reinsurance industry and its top executives and could contact them for a snapshot of the United States market. He knew I fit that bill. But he was hoping that the person he hired would also be an actuary. I’m familiar with risk assessment and risk management in that field, but I’m not an actuary. So besides my age, I was worried about that.

I had done a good job at Scor for 12 years, and I was disappointed that I had been laid off. My level of anxiety was fairly high. The Aurigen venture sounded like a great opportunity if it worked out. But the business world often has certain misperceptions about workers 55 and older. Some people think we’re set in our ways, we don’t have the energy we used to have, or that we’ve lost our drive. They may worry about offering us a lower salary than we earned previously. I knew I’d have to address these concerns when job-hunting.

I told Mike I was interested in working for him, and we left it that we’d stay in touch while he continued to develop a business plan and consider a staff for the United States company. In the meantime, I sent out 300 résumés. I heard back from about a third of the companies and had about 12 or 15 interviews, but no luck.

By June 2012, eight months after Mike and I first talked, I still hadn’t found a job. Then Mike called and said he could offer me a three-month position as a marketing consultant, and that we’d see what happened after that. I was excited, but a consulting job was not ideal for me. I told him I would do the best job I could for him but would continue looking for a staff job with benefits, and he understood.

Consulting works well for people who like short-term projects and freedom, but I’ve always liked having a staff job. I like the feeling of belonging, and benefits are important.

I started talking to executives right away to gather the information Mike wanted and help him determine whether there was room for another entrant in the United States life reinsurance industry. I spoke to a vice chairman, 11 company presidents, 25 chief actuaries and 30 life underwriters and sent Aurigen’s annual report to customers and others, sometimes with a handwritten note.

My work helped Mike make a case to his board that another United States life reinsurance company could do well. In October I got the news that Mike’s proposal had been accepted. He was finally able to hire me as an account executive on staff for his new-business development team. I was able to stay in Texas for my new job at Aurigen.

Right after hiring me, Mike had me join him and the Aurigen pricing team at the October 2012 conference of the Society of Actuaries in Washington. Many industry executives attend, and I’d help sell prospective clients on the benefits of working with the new venture.

When word got out that I’d been hired, my former colleagues gave me a warm reception, which was nice. Several welcomed me back to the industry, and one asked about my sales territories. It felt great to know that I hadn’t been forgotten.

Rather than start a new company from scratch, Mike began looking at United States insurance companies to buy, choosing one that Aurigen closed on and renamed this past spring.

Some people might have no problem retiring after being laid off at 59. Maybe they tell themselves it’s not what they would have wanted, but they make the best of it. Or maybe they are ready to retire, so it turned out to be perfect timing. I’ll be 61 in September, but I want to keep working, so getting a chance at this job worked out well for me.

It’s easy to get depressed about being an older job seeker. You have to keep your eyes open, stay focused, and be open to possibilities. You never know when and how an opportunity may come along.

Off the Shelf: In ‘Buy Side,’ a Wall Street Trader’s Crash Landing

But I suspect that things might have turned out almost as badly as they did for Turney Duff, a callow, young hedge fund trader who writes of his own noteworthy flameout in a bracing new Wall Street memoir called “The Buy Side” (Crown, 320 pages).

Mr. Duff’s tale calls to mind books like “Bright Lights, Big City,” by Jay McInerney, and especially “Liar’s Poker,” by Michael Lewis — stories of wide-eyed newcomers confronted by the temptations of moneyed New York. As literature, it doesn’t rise to the same class. As spectacle, it easily trumps both.

Mr. Duff makes millions, pays brand-name rappers to perform at his birthday party and marries a glamorous singer. But instead of riding into the sunset, he ends up retreating to sumptuous hotel suites where he inhales piles of cocaine, swills Scotch and watches pornographic movies. By himself.

Along the way, by his own admission, Mr. Duff becomes a caricature of the arrogant young Wall Streeter that so much of America loves to hate. If “The Buy Side” is remembered for any single line, it will be the remark that Mr. Duff says he uttered one evening upon confronting a lengthy queue outside a downtown Manhattan nightclub. Barging past the bouncers, he announces: “I don’t stand in lines. I snort them.” He and his trading pals think the joke so hilarious that they later emblazon it on souvenir T-shirts.

A middle-class kid from Maine, Mr. Duff began his career in 1994, in the early years of the hedge fund era, when he arrived in New York as a fresh-faced journalism graduate from Ohio University. Unable to land a job in writing or anything else, he reaches out to an uncle on Wall Street, who arranges interviews with several of the big firms. Mr. Duff aces the one at Morgan Stanley by recapping the previous evening’s episode of “Melrose Place,” the interviewer’s favorite television show. Hey, so much for that diploma.

One of the book’s strengths is Mr. Duff’s self-awareness. He realizes what he became. At Morgan, where he spent five years as a desk assistant, he knew little about Wall Street and learned even less about investing, acknowledging that he was too lazy to read research. Where he thrived was after the closing bell, when he proved adept at staging office parties and leading his peers — and a few higher-ups — through the assorted watering holes he frequented.

His light-bulb moment comes one evening when he successfully introduces a group of pretty girls to a senior trader. “I realize I’m in my element,” he writes. “I feel in total control and at ease. Only in looking back can I see how seminal this moment is. I would never be able to stand out at my job. There I’m out-experienced, out-connected and out-degreed. But here, with a glass in hand, I have as good a chance as any to move and shake.”

Mr. Duff puts his social skills to good use when, unable to secure an actual trading job at Morgan, he moves to an up-and-coming hedge fund, the Galleon Group — the same Galleon Group that was eviscerated in Wall Street’s continuing insider-trading scandals.

As a “buy side” trader executing transactions for senior portfolio managers, he is a conduit to the “sell side” traders at the big Wall Street firms who actually carry out his trades. Mr. Duff’s decisions on how and where to allocate his trades make him of crucial importance to the sell-side traders, who earn commissions on them.

It is Mr. Duff’s portrait of how sell-side traders ardently romance their buy-side counterparts that is probably the book’s most memorable contribution to Wall Street literature. He takes everything they offer: booze, dinners, Super Bowl tickets, private jets to Las Vegas weekends, parties in South Beach, lots of cocaine and, while at Galleon, scads of tips that move stocks. One of his mentors, a trader named David Slaine, ended up cooperating with the government’s Galleon investigation, but the scandal proves peripheral to the book.

WHAT stays with you is the portrait of a young man who seemingly never met a temptation he could deny.

For a time, Mr. Duff rides high, earning million-dollar bonus checks, renting a TriBeCa triplex with drop-dead Hudson River views and eventually adding a wife, a Long Island manse and a beloved daughter. But the drugs soon take hold, and his long downward spiral grows uglier at every turn. After two stays in rehabilitation facilities, he loses the trading job he took after leaving Galleon, then his marriage and the real estate. The financial crisis does the rest, and today, Mr. Duff says, he tries to make a living writing from a tiny apartment in Long Island City, Queens.

Mr. Duff proves a fine wordsmith; his prose is smooth, lean and rhythmic. Where the book misfires — badly — is when he tries to plumb the existential side of things, or to employ literary artifice. There is one cringe-worthy chapter about his girlfriend (who would become his wife), where he begins every few paragraphs with a letter, “I,” then “I L,” and so on, which of course ends up spelling out “I LOVE YOU.” It made me want to throw the book across the room.

Almost as bad is his “Bud Fox” moment, the obligatory episode in these lost-in-Manhattan memoirs when the protagonist must replicate that memorable scene from Wall Street when Charlie Sheen, having sacrificed himself to Gordon Gekko and the gods of capitalism, stares out at the Manhattan skyline and asks, plaintively, “Who am I?”

Mr. Duff’s moment comes the morning after his 34th birthday party, when he wakes on the roof deck of his triplex, fires up a marijuana cigarette and realizes how hollow all his newfound wealth and party-hardy friends make him feel. “Why,” he wonders, “do I feel so empty?” My bet was all that cocaine; whatever the reason, I didn’t much care. I just wanted to smack the guy.

That said, this is an entertaining and cautionary tale, well worth your time. I can imagine parents out there who might give it to children pondering Wall Street careers. Of course, should it excite rather than frighten your budding Bud Fox, you might consider urging an alternative career path.

Blindness Can't Stop Attorney From Landing Federal Clerkship

Daniel Matzkin
Photo by J. Albert Diaz

It wasn't until after legal secretary Nancy Cedeno sent a funny cartoon by email to attorney Dan Matzkin that she realized her mistake.

Cedeno doesn't think of Matzkin as blind, nor does anyone else at his office at Squire Sanders in Miami.

"From day one he's always had a great sense of humor," Cedeno said.

Blind since birth with a condition called Leber congenital amaurosis, Matzkin, 29, never let his disability stand in his way through undergraduate studies at Wesleyan University and law school at the University of Michigan, as a litigation associate at Squire Sanders and in applying for a clerkship with Judge Adalberto Jordan of the U.S. Court of Appeals for the Eleventh Circuit.

Matzkin beat out more than 100 applicants to land the clerkship starting this fall. According to the American Association of Visually Impaired Attorneys, few blind attorneys have ever clerked for a federal judge. Isaac Lidsky is an exception. He clerked for U.S. Supreme Court Justice Sandra Day O'Connor in 2008.

"It's so competitive you have to be surprised when you get a federal clerkship," Matzkin said. "I know folks with great credentials who didn't get it. I think it will be a great opportunity to see how the court works."

The judge previously worked at Steel Hector & Davis, which merged with Squire Sanders. So when Matzkin applied, Jordan called around to inquire about him. Hearing only positive feedback, he decided to bring in Matzkin for an interview. Knowing Matzkin was blind, the judge had reservations.

"I wondered how it was someone with that kind of issue can manage the rigors of a legal practice," Jordan said.

After all, a law clerk routinely reads hundreds of pages to prepare a judge for oral argument and conduct legal research.

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Common Sense: A Hard Landing for University Endowments

Their investing success along with their vaunted academic reputations led many financial experts to conclude that Harvard and its peers at the pinnacle of higher education had solved an age-old conundrum: how to generate higher returns with lower risk.

An investment stampede ensued as other universities, giant pension funds and even individuals slavishly copied their strategy, which stressed diversification along with high-cost, often illiquid alternative investments like hedge funds, venture capital and private equity funds. Today, it’s hard to find a college or university that stuck with the older and far simpler allocation between stocks and bonds. Hedge funds alone currently have what is estimated at over $2 trillion in assets, much of it from large institutions.

College and university endowment returns for the most recent fiscal year, which ended June 30, are starting to roll in. And in many cases, they warrant a grade of C at best, and in some cases, an F. Harvard reported a 0.05 percent loss and a drop in its endowment of over $1 billion in the same period, even as a simple Standard & Poor’s 500-stock index fund gained about 5.5 percent. Harvard’s endowment decline is more than the entire endowments of roughly 90 percent of all colleges and universities.

Even more startling, data compiled by the National Association of College and University Business Officers for the 2011 fiscal year (the most recent available) show that large, medium and small endowments all underperformed a simple mix of 60 percent stocks and 40 percent bonds over one-, three- and five-year periods. The 91 percent of endowments with less than $1 billion in assets underperformed in every time period since records have been maintained. Given the weak results being reported this year, that underperformance is likely to be even more pronounced when the fiscal year 2012 results are included.

The impact is significant. Universities depend on returns on their endowments to finance operations, pay faculty and administrative salaries, provide scholarships and pay for building projects. Harvard said it planned to spend $172 million this year on need-based scholarships. Many colleges budget 4 to 6 percent of the endowment’s value for current spending. At Harvard, funds from the endowment account for 35 percent of the university’s annual budget.

“The compelling simplicity of a 60/40 strategy is very hard to beat,” Timothy J. Keating, president of Keating Investments in Greenwood Village, Colo., and author of two reports on endowment performance, told me this week. “Many investors would be much better served with a simple 60/40 strategy, or at least a core where you have low-cost index funds. When you understand the role of transaction fees, it’s a very high mountain to scale.”

Those fees for so-called alternative investments can be enormous. Hedge fund and private equity fund managers typically keep 20 percent or more of the gains, which is known as carried interest, and a percentage of assets under management. Private equity, real estate and natural resources partnerships may also impose an array of transaction fees on top of performance fees. “The audacity of Wall Street at extracting fees never ceases to amaze me,” Mr. Keating said.

Simon Lack, a founder of SL Advisors in Westfield, N.J., and a hedge fund insider — he allocated capital to hedge funds during his 23 years at JPMorgan Chase — caused a stir earlier this year with his book, “The Hedge Fund Mirage,” in which he calculated that the hedge fund industry as a whole lost more money in one year (2008) than it had made in the previous 10 years. “If all the money that’s ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good,” he asserted. And he maintained that nearly all the hedge funds’ gains had gone to hedge fund managers rather than clients.

“If you look at the data, hedge funds have underperformed a simple 60/40 stock/bond mix every year for the past 10 years,” Mr. Lack told me this week. “They did well in the downturn of 2000-2. But that’s when assets under management were less than half what they are now. There’s no disputing that as assets have grown, performance has declined.”