“Don’t remind me.”
“You could have heard that flop in the next county. Great party, though. I’m just sorry it had to end on a sour note.”
“I thought you weren’t going to bring that up.”
“It just slipped.” Shank took hold of Astor’s arm and stopped his progress, guiding him against a wall. Astor stood still, Shank’s compendious belly pressing against him. “Marv, what are you going to do? Give me a kiss?”
“Really, Bobby, you doing okay? We’re talking about your father here. You can talk to me.”
Astor looked Shank straight in the eye. “I’m fine, Marv. Really.”
“You’re sure?”
“Do you want me to pinkie swear?”
“Screw you,” said Shank, dismissing Astor with a shove down the hall. “Shows what I get for caring.”
“If you want a friend…” began Astor.
“Buy a dog,” the two men said in unison. Astor raised his hand and Shank high-fived him.
“Thought you were getting soft on me,” said Astor.
“Thought you had a heartbeat.”
“Never.”
The trading floor was a long open space, a floor-to-ceiling window that looked over Ground Zero and past Wall Street to the East River making up the outer wall. A desk ran the length of the room. Fourteen traders sat across from one another at uneven intervals. A host of flat-screen monitors demarcated each post. Workspaces varied from immaculate to chaotic. He counted three boxes of Pepcid, two containers of Tums, and a bottle of Maalox. Pro ball players got concussions. Traders got ulcers. If you weren’t playing injured, you weren’t playing hard enough.
Aware that the room had gone silent at his arrival, Astor stopped and addressed his team. “Okay, everyone, listen up. I know you’ve all heard about my father. I have no more idea what happened than any of you. If I find out anything, I’ll announce it over the hoot-and-holler. Your condolences are appreciated, but as most of you know, we had a falling-out a while back. Don’t expect me to hide in my office while I get over it. I’m going to be out here on the desk riding your ass like any other day. So get to work and make some money.”
Astor waited, but no one made a move. He clapped his hands. “That means now.”
The room came back to life.
Astor continued to his office. He had founded Comstock Partners fifteen years earlier, at the age of twenty-six. The firm’s name was a lie from the beginning. There were no partners. There was just Robert Astor, sole owner and principal investor. In the world of finance, Comstock was technically classified as a hedge fund. Hedge fund was one of those funny terms that meant everything and nothing all at once. Simply defined, a hedge fund was “a private partnership that invested in publicly traded securities or financial derivatives.” That meant he bought and sold stocks, bonds, commodities, currencies, and just about anything you could legally speculate on with a view toward making a profit. But that was only a beginning.
Most hedge funds had four things in common. First and most important was fee structure, since traders, Astor included, cared about only one thing, and that was making money. Comstock, like the majority of its competitors, used something called a “two and twenty model.” Comstock kept 20 percent—a full one-fifth—of all profits for itself. On top of the 20 percent, it charged a management fee of 2 percent on all funds invested with Comstock, win or lose. In this last regard, Astor was a gentleman. He charged the 2 percent only on the funds actually invested in his positions. Any money sitting in a bank got off scot-free. He even credited his investors the interest.
The other three things hedge funds had in common had to do with the way they invested the money entrusted to them. As the name implied, Astor often hedged his investments, meaning that if he bet that one stock might go up, he bet another might go down. The idea was to guard against swings in the market. Hedging might limit your returns, but it provided the investor with a margin of safety. It was never smart to put all your chips on red or black.
Next, Astor used something called “leverage” to jack up the value of his bets. Leveraging just meant borrowing to increase the size of your bet. Back in the day, an investor would buy stock “on margin,” which meant he used the value of the stock he had bought to double-down and buy some more. That was old school. These days an investor leveraged. Astor borrowed billions of dollars to amplify his bet on anything: stocks, bonds, oil, wheat, pork bellies, and especially currencies.
The last element was freedom. Hedge funds like Comstock operated in a nether region where regulation held little sway. When an investor signed a disclosure agreement and transferred his money into a hedge fund, he was giving Astor his trust to make money the best way he saw fit.