When I saw Alex Berenson was evicted from Twitter, I decided to finally start a Substack. He started his own Substack and I have thought about doing it for a bit. I have blogged for a long time at Points And Figures. I think since Jan 2011.
I quit Twitter in the heat of the 2020 election. I am reluctantly back on. Social media companies are run by horrible people. It’s not just the headliners, but their management teams as well. I don’t think government regulation will help.
The reason I started that blog was because of Dodd-Frank. Dodd-Frank was horrible legislation and few people understood how horrible it was. I have been proven to be right about that I think as community banking took a tremendous fall upon passage of the legislation. Banks have higher reserve requirements, but big deal. That could have been done with overarching invasive regulation. If you read the fine print of Dodd-Frank it ought to scare you as much as the Patriot Act passed in haste under the Bush Administration.
It turns out, now there is a lot of censorship and groupthink in America. Your character is assassinated if you think differently, even when you show data that disagrees with the beliefs of the mob. It’s the new Jim Crow.
I have been a victim of the new Jim Crow.
I’ll give you a little history about me, and my life. Then at least you will have some context at how I approach things and what sort of lenses I use to look at life. For those that have followed me in the past, some of this stuff will be familiar. However, I will try to add some things that you have never read before.
I am a conservative Republican/Libertarian. I have worked for myself since 1986. I grew up in the suburbs of Chicago. My dad was a teacher and for most of my life, my mom stayed at home. I have a couple of younger sisters, 90% female cousins, a wife, and two daughters. Even though I am a conservative, I try to be very objective when I look at things. We recently escaped Illinois and I live in Las Vegas now.
I am very atypical. I went to three colleges in four years and wound up on the trading floor of CME. I had a good career there. I was elected by my fellow members to be on the board of directors there at a historically pivotal time for CME. We fundamentally changed the structure of the exchange and changed the trajectory of the entire futures industry during my time on the board. It was hyper innovative.
I started trading in 1988. Roger Carlsson backed me. I was his fifth employee. I left Roger and I bought a seat in 1992 for $730,000. I put half down in cash. I had to pay the rest back over five years at a point over the prime rate. Soon after, I swapped up to a full seat for $50k.
One of the things I loved about CME aside from the competition and camaraderie was that your word was your bond. Break your word, be a shit, be sneaky, and the people on the floor would cease to trade with you, and you were done.
At that time, the board ran the exchange. They were like C-level managers and the organization reported back to them. I ran a few committees and was a member of the strategic planning committee. We met almost every single day for hours after the close to figure out how to remake the CME.
My days started at 5 am. I’d wake up, drive in from Geneva, IL and trade all day. From 2 pm to 5-6 pm, we’d meet. Then, I would drive the hour to an hour and a half home. It was grueling and intense. It was just like founding a new company.
However, electronic trading came into the Hogs at the end of 2008, and I 100% lost my job. I went from making lots of money a year to losing lots of money. From 2009 to 2016, I had a net loss every single year of my life, but still paid taxes since I was self-employed. I watched my nest egg drop two-thirds in value in the market crash.
I had moved to the city in 2003. I had a co-op on Lake Shore Drive in Chicago that we had gut rehabbed. My kids went to a tony private school, Francis Parker. I ran with some pretty good social circles in Chicago. I was on my way to being broke if I didn’t change anything.
I did wallow in self-pity. I think that is normal and human. It’s how you snap out of it that matters.
It wasn’t my first time experiencing failure. In my life, I had experienced some failures. Some of it self-inflicted and some of it due to the fact that I just wasn’t up to the task.
It turns out when I was a representative in Torino, Italy at the first-ever i7/G7, I was part of the “future of work” group with Dyan Gibbons and Ted Ullyot. I remember asking everyone in my group if they ever had been automated out of a job. No one had. I was the only person there that had real-life experience with it.
However, I had tried to make some “luck” for myself. In 2003, I went from being up $750k in May trading to down $250k on the year by December. It was a wake-up call. Electronic trading invaded the Eurodollars and took my edge away.
I started to search. In my generation, the default was to get an MBA. However, most people did it right after undergrad, or in their late twenties and early thirties. I was 41.
I switched pits from the Eurodollars to the Hogs. It was a big and difficult transition but fortunately for me, some of the traders in the Hog pit took me under their wing. Remember, I didn’t have customers. I traded my own money. A good day meant my wife could shop at Hermes. A bad day meant she was going to Walmart.
The Hogs were good to me. 2004 came and went but I decided to be proactive. I enrolled in the Executive MBA program at Chicago Booth. I started in June of 2005. At the end of the program in November of 2006, my buddy Vishal Verma approached me about forming an angel group. I didn’t even know what an angel group was.
We did form the angel group, Hyde Park Angels, in April of 2007. None of the other founders had really good Chicago connections, but I did. The first meeting went horribly. Interestingly, before that first meeting, only Ryan and I wrote dues checks. I think we are the only two founders to actually do it.
We had a “managing director” who’d never done any angel stuff and it totally showed. The University of Chicago said if we kept him, they wouldn’t partner with us. One of my co-founders called me up and was livid. We asked the first MD to leave on the spot.
Later I found out that guy stabbed me in the back with a local venture blogger.
Professor Ellen Rudnick told us unless we “hired” Ira Weiss, we were done. Vishal, Ryan, Rick, Sharon, and I agreed to chat with Ira. Ryan and I met with Ira. I remember that meeting like it was yesterday. Ira talked about what he had done at Columbia, how he had a cadre of investors there and wanted a fund. So did I since I knew trading was going to end for me. I thought angel investing was my ticket to becoming a venture capitalist. I was wrong and being a “nice guy” screwed me.
I was learning that people not from the floor were not as trustworthy as people on the floor.
We had made the first investment, Shuffletech, where one of our co-founders Rick was going to be the CEO. Only Ryan, Rick, and I invested. Ira never liked that investment. He always fought putting it on the HPA website! Ironically, Shuffletech had an exit due to a lawsuit. That would not have happened without Rick leading the company. Not exactly the best way to get a win, but it’s a win! It also shows that you bet on jockeys at the seed stage.
Eventually, I left HPA. It was time for me to leave. The consultants, the people that were looking to use the organization for their own gain, and the bureaucrat/corporatists had taken over. Not only that, because most of the board was very very liberal, we had political differences too. I don’t think Ellen had ever been super comfortable with any of the founders since we didn’t fit the classic profile.
To date, no one from the University of Chicago has ever made an introduction for me when I have asked for it to further my career. A former friend who is a professor at U of C did introduce me to a few people in hopes of helping but he is the only one.
I think when you spend $100k+ for an MBA, not only should you be able to utilize the network and get introductions but people that know you ought to feel enabled to advocate for you. I know that’s how it works at a lot of places.
I think that in the future, you will be defined and enabled by your network. Networks will win and today, many of them are in flux which aids the instability in the world. In the world I grew up in, you were more able to be singular and networks weren’t as important as they are today.
I had tried to raise a fund by myself for a few years. It didn’t go well at all.
I was introduced to my current partner Kenny, and we decided to do a seed fund together. It took us two and a half years to raise $10.75MM. It’s that hard to raise the first fund, but it is especially hard in places like Chicago. If we had the same street cred and had been in Silicon Valley all of our careers, we’d have raised something like $50-$100MM. What is funny is my friend Dick Kiphart told me not to waste my time unless we raised $80MM. He’s sort of right and that is the subject for another blog post.
Kenny and I have made some promising-looking investments. You can see them at West Loop Ventures. You don’t know until you ring the cash register, but so far some of them look like real companies.
Interestingly, our first “investor” decided not to invest in us because I am a Republican. I wrote a blog post outlining why the minimum wage creates unemployment and he took vehement, overwrought exception to it. He was a successful trader from the CBOT. So, I guess the aggressive cancel culture I am seeing today isn’t surprising to me.
Kenny and I are going our separate ways now that the fund investment period is over. I am 59 and trying to figure out what to do with my life now. I had a health scare earlier this year that changed the way I think about life. One of the reasons I started this Substack is to try and figure it out.
If you subscribed, thank you. I like to interact with commenters. I am not some oracle on the mountaintop. We all are human and we all have interesting lives. My old pre-Trump friend Professor Mike Gibbs used to say when you start to scratch under the surface of a Chicago Executive MBA student, you find out the most fascinating things. Mike is one of the smarter people you will ever encounter in your life if you are lucky enough to have him for a class.
I meet people all over the place that have read my blog, or interacted with Twitter, Facebook, or Linked In. Once a guy in Istanbul reached out to me and we met for beers. Another time, two guys reached out to me in Austin, Texas and we wound up shooting guns together.
I hope that you go on this journey with me. Let’s do it together.
Great analysis and journey.
You never gave up
Your point about U of Chicago is one that I have found frustrating. I graduated from the evening MBA program in 2000. I'm not sure if it is still the same but at that time all of the professors from the full-time program also taught evening classes (except Fama. He was able to avoid making the journey into the city). It also meant that I had full-time students sitting next to me, thinking that this class was an easy A since the GSB mandated a 3.25 all class average; how hard could it be to compete against students who also had full-time jobs??
Anyway, the lack of a support network for the school is one of the most frustrating aspects given the dollars expended. I will say that I valued the education I received, having been a political science major in undergrad but working in financial services. Unfortunately, the support network just doesn't seem to be in the DNA of the institution.
I was glad you posted all the background. I've been reading the Points and Figures page for about the last year and glad I could add this to my Substack roll and will make this regular stop as well.