The Wise Investment

“So thank you for meeting with me, Mr. Sharpe. I appreciate the opportunity to meet here with you,” she said.

The man stared back blankly through his own reflection, “Sure.”

“So, ok, you were manager of the Sharpe Investment Group?”

“Yes, I was,” he replied, hinting false patience. He continued, “I started the group in 2002 after regulatory changes disrupted our former venture in cross-currency debt revaluation. We initially grew Sharpe Investment Group in the energy sector during the turbulent period after Enron, but we soon found greater success in the rapid growth of the derivative markets. Those markets were fresh and ripe for staking new claims.”

“We’ve all heard a lot about derivatives. For the novice, can you explain that?”

With a well-worn response, he proceeded. “At once it’s both complicated and simple. But the core principle is very basic. We were making bets on how the market would trend. When things were good, they were very good. But when they turned bad, they were very bad.” After a pause, “And that’s why we’re here.”

“Right, so is that how people understood this? Derivatives?” With that, there was another, longer pause.

“Let me help you. You want to know whether or not I have any heart – whether I’m human like the rest of you,” his voice growled.

The young reporter was taken aback by the bold interjection.

“You want to put a face to the manager responsible for these funds,” he added. “Isn’t that right?”

Under this atmosphere, the young woman consciously elected to steel herself. “So how do you feel about what happened then?”

“Good. Our fund outperformed the market for twenty-two consecutive quarters prior to the final two.” A subtle smile began to creep across his face.

“That’s when all those people lost all their money,” she replied smugly.

“Every quarter each of those people chose to continue under us. Any of them could have exited the fund. They could have left after twenty-two quarters of consecutive gains. Instead, investors continued to roll the dice.”

“And those people lost everything – their entire savings.”

“Don’t you think I know that? Don’t you think I know that better than anyone?” Mr. Sharpe took a moment to regain his tailored demeanor, “People take the gains but can’t stand the risks. In this market, risks and gains go together. That’s balance. And now I have to deal with this wrath of people who don’t understand anything but the sting.”

“Oh, so you’re the victim here??” she quickly retorted.

Mr. Sharpe hinted at a roll of his eyes. “To put it simply, I was doing my job. The investment strategy was laid out and I followed it. That’s why I am here. So you make the call.”

She thought about all those people, as he stared back at her. “You were at the helm and all these people lost all their money. You don’t at all fell responsible for that?” she drilled.

“I laid out the investment strategy, and I laid out the risks. And then I executed that strategy just as promised. I did my job,” he reiterated with overemphasis. “And I did it well. Eventually, because the cards didn’t come up our way, now I’m on the gallows. Like I said, you try and make the call.”

“But you came up with those strategies.”

“We all make assumptions every day to function. You get in your car assuming the brakes will work, and you don’t find out for sure until it’s too late. But you still drive. I disclosed the risks with my investment strategy, and those assumptions bested the market for twenty-two consecutive quarters. People kept coming back for more and more, until eventually it wasn’t there. I kept to my end of the bargain each time. It’s the market that changed.” The look in Mr. Sharpe’s eyes was more sincere than ever, without any typical veneer of arrogance.

The young girl’s stare receded, turning in on itself. Her thoughts crested their former boundaries.

“Let me help you. For your article, you want a strong closing. You want a lesson learned or a clean take-away. Well, here is it.

“Greed. The problem here is just another story of simple greed. The ones who got away with this were the early ones, the ones who cut out before the whole thing came crashing down. The others, the ones who kept on going, trying to milk every last dollar – and the ones who jumped on late to grab some action – those are the ones left behind when the bottom fell out. Good times don’t last forever. That’s balance. That’s the way the world works. The late ones always crash in the wake of the early ones.” Mr. Sharpe paused his soliloquy in thought, as the reporter listened intently. Her pen met the paper and hovered there in an uncertain anxiousness, poised to scratch out an elegant interpretation whose words eluded her.

“It always comes back to old fashioned work ethic,” his diatribe resumed. “We have generations now who‘ve lost touch with the meaning of real value. Everyone plays around snatching against the perceptions – absorbing from the periphery. One person’s losses are someone else’s gains. But we’re finding now that the whole system is periphery – the whole thing is hollow. Everyone’s forgotten that the only real gains are the ones you earn yourself.”

The journalist’s eyes silently lifted from the page and met the speaker’s. His eyes, meanwhile, stared only into his own reflection.

“And what I have earned out of this is my sentence here.”

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