“Ah, Moira.” he said, standing up. She was trying to place him.
“Winifred,” she said.
“I saw you in The Elliot Bay Book Company,” he said. “Last month. Moira was a guess.”
“Oh, yes . . . something funny . . . you had a projection.”
“Very funny,” Joe said. “Winifred, my name is Joe, Joe Burke. Why not come sit? Talk story . . . ”
“I've given up on men,” she said to someone listening in the banyan.
“Very sensible,” Joe said.
She hesitated and sat. “I love this tree,” she said, placing her sun glasses on the table between them.
“Didn't someone write about it? Or under it?” he offered.
“Stevenson,” she said. “Or was it Mark Twain?” Her eyes were intensely brown with radiating streaks of garnet.
“It's a literary banyan,” Joe said.
“So, what brings you to Hawaii?”
“I used to live here,” Joe said. “I stopped computer programming, and I stopped being married—again. It seemed natural to come back.”
“Hawaii gets to you,” she said. Winifred lived in Manoa. She was a photographer. Joe would have bet that she was some kind of artist; he found them wherever he went. Her sister lived on Queen Anne Hill in Seattle, close to Kate and the Caffe Ladro. Her father, Arthur Soule, was a professor, retired in Vermont.
“Lot of Soules on the Maine coast,” Joe said. “And a Coffin clan. The line is: `For every Soule, there's a Coffin.”'
“So my father has told me.”
“Win, Winifred . . . what do you prefer to be called?”
“Either works. `Winny' is what horses do. My father sometimes calls me Freddy.”
“How about Mo?”
“No one calls me Mo.”
“Excellent! I shall be the first.” She had large features, a wide serious mouth that turned slightly up or down at the corners. Down in this case. “I thought of you as Moira,” Joe explained, “mysterious Celt, born for the luck of the Burkes.”
“Born to be bad,” she said. “You can think of me any way you like, Joe Burke. I must be going. Bye.” She twirled her sun glasses, smiled once, and left. He watched to see if she would swing her ass a little for his benefit, but she didn't. Her eyes stayed with him—large and sensitive, clear. She was nearly six feet tall and broad across the shoulders. Her hands were as big as his. Not the happiest of campers, he said to himself.
He went back to thinking about Victor Sperandeo's book. As a teen-ager, Trader Vic made a living playing cards in New York. Then he moved into the big casino on Wall Street. His book was straight exposition, written without pretense. Joe had read other books about the market. There were many different approaches and specialties: day trading, intermediate and long term investing, stocks, bonds, currencies, and commodities. Sperandeo was someone he could relate to personally, a maverick.
There were other market gurus who made sense to him—John Train and Warren Buffett, especially. They espoused a long-term strategy: think before you buy, and then, once having bought, continue to buy on dips and hold unless the company changed fundamentally for the worse. Sperandeo was more of a trader. Joe was torn between the two approaches. Discount brokerages had just become available on the Internet; one could trade without having to actually live in New York. On line discussion groups argued about stocks 24 hours a day. He decided to buy a computer.
Three hours later Joe paid the cab fare and carried his new system up to the apartment, one box at a time. He had it working in an hour and went to bed pleased with himself.
The following day he opened an account with a service provider for Internet access. There was an e-mail message from Kate waiting at his old address in Maine. Joe had agreed to pay Kate's mechanic $30 a month to store the truck and had asked him to go over it, change the oil, and do whatever needed doing. Joe replied that the check would be in the mail and wished her a Happy New Year. The Internet is amazing, he thought. The message was in Maine; Kate was in Seattle; he was in Honolulu and could be anywhere.
“Damn, Batman, we're global!”
On impulse, he found a number listed for W. Soule and called her on the old fashioned telephone. After a recorded message and a beep, he said, “Mo, this is Joe Burke. I'm having adventures. Want to have lunch?” He left his number and hung up. When he returned from a walk, the red message light was blinking.
“Joe, thanks for asking, but, no . . . I'm not an adventure.” She made an amused sound. “Call me again sometime when you've grown up.” Click. Joe called back immediately.
“Hi, I grew up,” he said when she answered. “A woman on TV just explained it to me. You have to transcend the grieving child within.”
“Hmmm,” Mo said.
“Pie,” Joe continued, “what's the name of that place on Hausten Street where they have great pie? The place with a fish pond. The Willows. Back in time.”
“I'm afraid you'd have to go back in time to eat there; they closed two or three years ago.”
“Damn. How about Keo's? Tomorrow, 12:30 or thereabouts?” His best offer. You'd have to be seriously repulsed by someone to turn down Keo's.
“Ulua with black bean sauce—I'm going to regret this,” she said.
“Great. No. I mean, we'll have a nice lunch. See you there,” Joe bailed before she could change her mind.
4
Joe put down his fork. “Lemon grass,” he said with satisfaction. Mo was eating rapidly; she raised her eyebrows.
“So, what have you been up to?” she asked, breaking off a piece of spring roll.
“I bought a computer.”
“Ughh.”
Joe laughed. “I hate them, really. But they're good tools—I bought it for the Internet, so I can trade stocks.”
“I'm remembering,” Mo said between bites, “what they say about how to make a small fortune on Wall Street.”
“How's that?”
“Well, you start with a large one.”
“Ha, ha. That's one method I can't use.”
“I should have eaten breakfast,” she said. “What is the damned Internet anyway?”
“Mo, I have to warn you—the last ten people that asked me questions like that are lying face down.”
“I can take it,” she said.
“It's a way of moving information around,” Joe said, “that doesn't require a dedicated phone line. The telephone system works like a string stretched between tin cans. Two people monopolize the string until they're done. The Internet is different. Info is coded and split into small packets. Each packet is numbered and addressed; it heads toward its destination by any route that is open; it doesn't have to travel with its sister packets. A program at the receiving end collects the packets and reassembles them correctly. No need to dedicate one string to one conversation at a time.” Joe paused for breath. “The Internet is a lot of fat strings with packets zipping through. Each year the strings get fatter and the packets zip faster.”
“Where did you learn this stuff?”
“Right up the road at the university. I actually have a degree in it.”
“You don't look the type,” Mo said.
“You say the nicest things. The Internet is here to stay. Twenty-some years ago, when I was a student, I typed an algebra equation into a computer; it was beamed from an antenna on top of the engineering building to a satellite and then down to an antenna at MIT in Massachusetts. A few seconds later, blak, blak, blak, the answer came out of the printer, back from MIT. That was state of the art, a marvel. Now, my God!” Joe paused. “I'm going to make money on it.”
“Is that what you want to do, Joe, make money?”
“Some, anyway.”
“What do you really like to do?” Mo took a mouthful of rice. Her eyes were wide open, looking directly at him.
“Uh . . . I like to write about things.”
“Aha,” she said.
“How do you get by?” he asked.
“I do all right
with photography, commercial work. I teach a couple of courses. When I get the chance, I do my own stuff; I have a show every couple of years if I can.”
“The only photographer besides Ansel Adams and Cartier-Bresson that I can remember is the Hungarian guy, Kertesz.” Mo looked at him sharply. “His pictures of New York are so still,” Joe said, “like etchings, but they're awake. There is always something—tracks in the snow, a falling leaf, something that echoes time.”
“Wonderful,” she agreed. “I love his early Paris shots. You know about Kertesz? You're full of surprises.”
“My father is a painter.”
“So you grew up with it?”
“Actually, I was raised by my grandparents. My mother died when I was a kid. Did you ever hear of Franz Griessler, the painter?”
“Yes, I've seen some of his work.”
“I met him once. Want to hear about it?”
“Sure. How about dessert?”
“Absolutely.” They ordered.
“I used to drive a Charley's cab. A woman flagged me down in the shopping center one day. She was holding a flat package in both hands, wiggling her fingers. She was slim, intense, in her late thirties, with high coloring and black hair pulled into a bun. She was damned good looking—hapa—Asian, French maybe. She lived nearby, just behind The Pagoda, but the package was clumsy to carry. It was a drawing of hers. We got to talking, and she asked if I'd ever modeled.”
“Had you?”
“Nope. She talked me into it. The next day I drove her to Franz Griessler's studio, way up the mountain on Round Top Drive, and sat for her drawing class.”
“What was he like?”
“Short. Square. Close cut gray hair. Powerful guy. Lili—that was her name—told me afterwards that he was 82. Hard to believe. I was very tense at first. I thought for a few minutes that I couldn't do it, couldn't just sit there with people looking at me. Drops of sweat started to form over my eyebrows. I wanted to run away. But something happened. I began to enjoy listening to the charcoal scratching and the small noises people made as they concentrated. The sweat disappeared. I felt part of a tradition. I felt that I belonged.”
The waitress brought dessert and cleared the table.
“At break time, Franz showed me his studio. He was working on a portrait, a seated matron—silver hair, a lot of greens, sage, purple lilac colors. Her hands were partially sketched, folded in her lap. A diagonal grid of pencil lines mapped the unpainted portions of the canvas into large diamonds.
“`Ach, the jewelry. Always the jewelry. I hate it.' Franz said, looking at indications of bracelets and rings. `Ach.' I asked him what the pencil lines were for.
“`Structure. Composition. Always I start with them.”'
Joe stretched and finished his coconut banana dessert. Mo looked thoughtful. “What became of the babe?”
“I saw her across the street, a few weeks later. I don't think she noticed me. Every so often I look at the mountain and remember that studio, especially at night. You can see a couple of lights way up there. You know what I keep seeing?” He answered his own question. “Those diagonal pencil lines.”
“Mmm . . . “ Mo pushed her plate away. “Thank you, Joe. It was a nice lunch.” As they left the restaurant she put a hand on his arm. “When the going gets tough, the tough get going, right?” She was looking at him as though he were a sixth grader.
“Right,” he said, and they went in different directions on Kapahulu Avenue.
Joe took the long way home, around the zoo and through Waikiki. He didn't know what to make of Mo. She was a good listener. She didn't seem to be involved with anyone. It was a shame to let that body of hers go to waste.
Joe had started the day at 4 a.m. to catch the market opening on the East Coast; by the time he got back he was tired and already anticipating the next day's trading. Precious metals were hot. He was making money. He had made the acquaintance in cyberspace of Claude Ogier, a knowledgeable gold bug from Quebec who issued a constant stream of communications about the latest mining developments. Claude was preparing to launch a newsletter, working into it. Joe was up $3000 in six weeks by following his advice.
Southwest Precious Metals was attracting a lot of interest. They claimed an area of desert basin that was filled to a depth of 400 meters with material eroded from an adjacent range—a mountainous area that had been mined for gold in the last century. The deposit, known as `desert dirt,' contained gold, silver, and platinum in small concentrations. Small, that is, by the ounce. By the square kilometer, Southwest was sitting on the find of the decade. The problem lay in the extraction. There's a lot of gold in the Pacific, too, in the salt water, but no one has figured out how to extract it economically.
Arguments raged on the Internet. Gold and platinum are rarely found in the same deposit. Conventional fire assay methods are ineffective on desert dirt. The samples could have been fraudulently salted. A prestigious independent auditor was engaged to evaluate the deposit. Various explanations were advanced to counter the objections. Seasoned investors said that these companies were scams nineteen times out of twenty, so why bother at all? Optimists brought up investor resistance to heap leaching, an extraction method that had made fortunes in the 80's. Several mutual funds bought big positions after sending their mining aces to investigate first hand. The price was beginning to rise on larger volume.
The day after Joe had lunch with Mo, he bought 1500 shares of SPM at $4.75. The next morning, the price was $5.75 bid / $5.94 asked. A press release announced that an experimental extraction technique had yielded results that were higher than expected. Tests were continuing with larger samples. Joe jumped on the ask and bought 1500 more shares. “Damn it, Batman! We've got a live one.” The price spiked to $6.75 before profit taking knocked it down. It closed at $6.25 after heavy trading.
For several months the price continued to move up, as larger samples processed with the new technique yielded consistently higher results. He bought 1500 more shares at $10.50. When the price rose over $11, Claude shocked the online bulls by selling most of his shares. “But Claude,” Joe wrote, “if the extraction method is as cheap as most people think it will be, shares will go to $100, easy.” ($450,000 to him.)
“Don't worry, mon ami,” Claude answered. “I still have a position if that comes to be. I have my original investment returned with a profit. And my heart keeps the normal beat.”
Joe thought about buying more but held back. One detail bothered him. The CEO, a thirty year mining pro, claimed to have a degree from an obscure college in the Northwest. Several investors had tried unsuccessfully to verify this. Joe e-mailed the company to inquire but received no answer. Kate had an academic friend in Seattle who checked and was unable to find a record of graduation. The closest any one could come was to determine that he had gone to school there for at least three years. The college had gone through many changes over the years. Degree requirements were different. Records had been moved many times. They failed to pin it down.
Joe didn't care whether or not someone had a degree. It is what one can do that matters. But he cared if someone lied about it; lying is a bad sign. SPM stock broke above $14 and began to correct. The short sellers piled on, selling borrowed stock, driving the price down in order to frighten investors into dumping their shares. The price held in the $10 range for a few weeks and then quickly fell to $8 and then $7. The short position grew larger by the day. The bulls argued that all those borrowed shares had to be bought back sooner or later and that the upcoming positive mining audit would trigger a massive short squeeze that would quickly put the price over $20. The company continued to release good news.
When the audit report was finally released, it verified only the original assay results, a year old, and made no mention of the extraction yields. The company made bland assurances about ongoing efforts to improve the extraction technique, but there were no hard numbers and they were running out of development capital.
Trading in SPM was suspende
d. When it resumed, the stock cratered to below $3 in seconds. Joe waited for a bounce, clamped his jaw, and sold out at $3.25, just below the high of the day. Over the next few months, the price dropped to a nickel and the company went bankrupt.
Joe was in shock. He had lost $17,160 plus commissions, half his savings. As he thought it over, he realized the mistakes he'd made. He'd broken the primary law of diversity. You should never have all your eggs in one basket. Secondly, he had wavered between the attitudes of the trader and the long term investor, ignoring the safeguards of each approach. If you are trading, you must wait for good entry points and you must exit immediately if the price moves against you. Gains more than compensate for losses, if the losses are strictly limited. Furthermore, Victor Sperandeo had cautioned never to give back more than half your profits—they are too hard to come by. At one point Joe had been $32,000 ahead. It hurt to remember.
If you are a long term investor, on the other hand, you must know that the company is sound. Joe failed to follow through on his investigation of the CEO. He had been too cheap to go to the annual shareholder's meeting where he would not have found the qualities he looked for in management.
He had been neither trader nor investor. He had been a loser. Not only that, he had spent months staring into his monitor, living on the Internet, reading the Wall St. Journal every day and Barrons every weekend, and dreaming about how he would invest $450,000. He asked himself how he could have been so stupid, so inept.
He went to a Korean bar. Gorgeous women paraded continuously past his table. When he tired of sitting with one, the next slid in against him and put her hand on his leg. “Buy me drink? You want pu-pu's?” The music was loud, hypnotic, non-stop. They danced. They accepted MasterCard. Joe staggered home with further losses.
He was in deepest day-after shambles when the phone rang.
“Ugh, hlo?”
“Hi, Joe.”
“Max! How ya doin', buddy?”
“Fine. I'm at the airport.”
“Great! Come on over, or are you just flying through?”
“I thought I'd stay a couple of days. Kate told me you were here.”
Joe Burke's Last Stand Page 3