skip to Main Content
Looking To Stand Out

Looking To Stand Out

November 25, 2016

Chapter 28 in the exclusive series for Dynamic Commodities- becoming a commodities trader

Peter Neumann is a great guy. He worked hard, made few mistakes, kept his head down and joked around with the money makers all the time during his days in the traffic department. Before Mihale left the company, he would spend lots of time with Peter and Jimmy just shooting the breeze. Therefore, his selection for a promotion to a junior trader was no surprise. In fact, it was more of a natural progression.

Peter was not a shy guy. He had a good sense of humor and sense of self-confidence. I looked up to Peter in the telex department and during our time working together in the traffic department. Peter was supportive. Along with Elias Kifafi, our mutual boss, Peter trained me. After Peter had leaped to the other side of the wall that separated traffic from trading, Elias assigned me to take over his daily responsibilities.

I watched how another lehrling moved from the telex room to traffic and into trading. It was impressive. The move from traffic to trading came with a huge increase in pay and when it came to bonus time, the sky was the limit for even the most junior trader.

I realized that I was a long way, perhaps years, from the move that Peter made. However, I knew that the people who would have to make a decision to promote me hardly realized I existed. I began to spend more time in the trading room after the traders finished their business of the day. At first, it was awkward but it became easier over time. With Peter there, I had a reason to go hang out with my friend. Being liked was not enough. I had to stand out. I started looking for something I could do that would save the company money.

Handling Peter’s old traffic duties as well as the gold traffic, were my responsibilities. There were customers of the firm that would take gold on consignment. Philipp Brothers delivered physical metal to their factories or locations and as the customer required the gold, they would buy the metal. Therefore, Philipp Brothers was shipping, financing and pricing the inventory for customers in the jewelry and dental businesses.  The customer would pay market price for the gold when they priced it, along with a consignment fee, in some cases. The trade was a huge credit risk. If a company went out of business, the gold on their premises could be lost in bankruptcy. Moreover, I got the feeling that the business did not make money as the busy traders were not properly charging enough to these customers to make up for the expenses and credit risk.

During evenings and weekends, I spent one month analyzing the business. I learned that not only was the business not a money maker, but it was also a big loser. I presented my results to my boss, Elias Kifafi who told me to write a detailed report and present it to Steven Hamburger, the number three trader in the department. The next day, Hamburger called me into a meeting with Ray Nessim and asked me to summarize my findings. On that very day, Ray immediately closed the consignment business. I knew I did good and that project, done without any request, made me stand out.

Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities

Post Series: Origin Of A Commodities Trader

Leave a Reply

Back To Top