Early Daze: My Big BreakBy Derek On March 18, 2012 Under Post
As a young man, I went to Taiwan and Japan for several years to study and meet chicks. However, the misadventures of those times are beyond the scope of this story. At the end of it I finally escaped to Alaska in 1992. I satisfied my dream of becoming a commercial fisherman and worked on a salmon seiner for a season on Kodiak Island. For adventure, this was a good move. For money, it was not. Someone had alerted the fish to my plan of cleaning up in the industry and they mostly avoided the boat I was working on. Alas, it was time to try my hand at something else.
Easy Riding Down to Costa Rica
Since I had arrived on my motorcycle, a Suzuki 650 DR, I departed the same way heading south with the birds to leave Alaska to the real Alaskans before the snows set in. And I kept heading south until I finally crossed my last border into Costa Rica. There I met a rich farmer, Jose. When I say “Costa Rica” and “farmer,” you would be forgiven for thinking of a rough “Juan Valdez” figure who “peeks coffee beenz” with a trusty mule at his side. Jose was anything but this. His family was part of the landowning elite, he spoke perfect English, his cousin was “El Presidente” of the country and he rode around his “farm” in a Toyota Land Cruiser. I think he owned a third of the land in Costa Rica, or something like that.
“I want to buy your bike, Diego.” I speak enough Spanish to get myself in trouble and I noticed that in general, Spanish speakers cannot pronounce my first name, “Derek.” I go by the name “Diego” when travelling in Latin America. It opens doors with the added benefit that it sounds cool.
“Jose, I told you, I like this bike. It will cost you a lot of beans.”
He laughed. “You like beans? You come to the house for lunch, ok?”
While I was living in my tent on the beach with my bike parked right outside, Jose lived in a huge mansion with manicured lawns and many servants. Unlike the sweaty swarthy peasants in the fields, his wife, like him, was very fair skinned and well educated. He had two very polite children, a boy and a girl about ten and twelve years old. We sat at a long table outside on the veranda where the cook, an old woman named Maria, served us the main meal of the day.
“Diego. You say you like beans, yes? My Maria, she makes the best beans in the world! I have been eating her beans since I was a boy.”
I was more interested in the steaks I thought I smelled but then I tasted those beans. Damn! Jose was right. They were awesome and I still remember them now, 20 years later. After lunch we agreed on a price for the bike, $2,000 USD cash.
“Diego, there is one problem. Import duties into my country are 100%. We must sort this out.”
“Well, what can we do about it?”
“Ah,” he smiled knowingly. “You leave it to me. Tomorrow we will fix this. Today, we go look at my cows, ok?”
Jose and I climbed into his brand spanking new Toyota Land Cruiser and took off around the farm. We drove for hours.
“You see those cows over there? They are mine. And you see those mountains way over there. They are mine too!”
The landscape was mostly a burnt red color. We were in the dry season and the vegetation had a dry, desiccated look.
“So Diego, you speak Chinese, right? You should get those fucking Chinese over here to buy some of my land. We can make a good business that way. I have too much land and they have too many fucking Chinese!”
I told him I would think about it.
The next day we rode up to see the Customs officer at the border. Jose and his ten year old son drove in a Cadillac, of all things, and I rode behind them on my motorcycle. I was interested to see what tricks Jose had up his sleeve to sneak his new bike into the country.
It was a hot and cloud free day. The three of us walked into the small cement single story building that had a painted sign out front, “Aduanas.” Inside was the customs officer, a short and portly middle aged man with a tightly buttoned blue shirt with his gut hanging out over his big belt. The buttons were stressed. He wasn’t. He was a little grizzled, a little drunk and seemed to know Jose. Of course, everyone knew Jose.
The customs man got into the Cadillac and the four of us drove for a few minutes to a ramshackle bar on the side of the road. It was dark inside the joint and there were homemade wooden tables and stools on the cement floor. We sat down at a rough hewn table and Jose ordered up the local firewater, aguardiente. Three shot glasses were put before us while Jose’s ten year old son had a coke. Jose explained his situation to the protector of Costa Rica’s borders, drank a few shots with him and then handed over a wad of cash. We had already prepared the necessary forms and Mr. Customs pulled out his stamp, had another shot of juice and stamped our import form with gusto. Handshakes all around. Another shot for the road. We were legal.
Back to “The Renegade Province”
The next day I bid goodbye to Jose and his country and flew back to Los Angeles where my parents lived. I picked up my only suit and my only tie and then hopped on a flight back to Taiwan. I was in my late 20s, nearly broke and needed a job. Taiwan was booming and I knew there I could find a job teaching English again, as distasteful as it was, so off I went. I liked Taiwan a lot but after five years of teaching English in Asia I really didn’t relish another testing time of that terrible tedium.
After arriving, I checked into a cheap youth hostel and the very next day saw an ad in the newspaper; “Needed: Person to correct financial essays.” Hmmm. I can do that and it beats teaching, I thought. I put on my thin suit and thinner tie and caught one of Taipei’s ubiquitous yellow taxis across town to the address in the ad. The sign on the building said, “Yung Kao Securities.” I wondered, what the hell is that?
I had never studied finance, in fact, I majored in East Asian Studies at university because it was the fastest way to get my degree. I was hardly a “good student.” I just wanted to put school behind me and go see the world. Ignorance had never stopped me before and it certainly wasn’t going to stop me now. I walked into the building, took the lift to the third floor and got out. After handing my meager one page resume to the receptionist she asked me to wait. A little later another woman came out of the office and asked me a question, in English.
“Are you here for the brokers job?”
“The brokers job.”
She sighed. “You know, we’ll train you to be a broker and send you to Hong Kong and Singapore. That job?”
“Yes! I’m here for that.” Why not, I thought. It sounded way better than correcting dry financial essays or, God forbid, teaching English to screaming virus-ridden kids again.
“Great. Come with me to this meeting room.”
I interviewed with several senior Yung Kao Securities managers all in Chinese, which was great because they didn’t speak English. Then I met the boss, Daniel, who to my surprise, spoke flawless English and decided to hire me even though I thought “securities” meant “guns.”
Early Days for Taiwan
These were early days in the field of investing in listed equities in emerging markets. In fact, the term “emerging markets” had recently been coined by World Bank economist, Antoine van Agtmael. And for Taiwan, which had just opened its stock market to foreign investors, it was the very beginning of the early days. Taiwan at the time (1993) was a global manufacturing powerhouse. While China was only just starting to get its act together, from cheap plastic flip flops to semiconductors, Taiwan made and exported it all. What this meant was the Taiwanese were great at the business of making and selling stuff. Aside from trade finance, however, financial services were a new, new thing. And as far as dealing with foreign financial firms, they were in unchartered territory.
“Yung Kao Securities, Taiwan” was a Taiwanese retail broker that was trying to launch an institutional business. The words, “Yung Kao” in Chinese meant, “Always High.” Chinese love to give hopeful names to businesses, like “Ever Win,” or “Gold Advance,” or some other hokey moniker. “Always High” could be the motto for California’s Humboldt County, but for Yung Kao it just referred to stock prices. The words “Yung Kao” in English, however, sound like “Young Cow,” and calling for the first time from “Young Cow Securities” did elicit many curious reactions from clients, as you can imagine. But that was yet to come.
A Chinese Management Meeting
On my first day of work I was thrown into the research department as “Editor.” Being the only foreigner and only native English speaker in this firm of 100 people made that the obvious job for unskilled me. The research was written poorly in Chinese, translated poorly by the analysts and then edited poorly by me. The “product” was then faxed – yes! – to a few unlucky foreign money managers in Hong Kong and Singapore. The editing gig lasted about two weeks when the Number Two guy at the company, Mr. Liu, called me into his office and we had this meeting, my first of many with “management,”
“Derek.” (I wasn’t going to say “yes” again, so I just waited). “You are an editor, right?”
“Yes.” (Ok, just once more).
“And you work in the research department where everyone wears glasses!” He paused to let this sink in.
“But you don’t wear glasses. Do you?”
“Right. You should be in marketing. Sales, is what I mean. You should be a salesman.”
And with this pronouncement, Number Two walked me out to the trading floor and handed me over to the senior salesman at the time, Johnny Wang. He explained to Johnny my new role which Johnny thought a very fine idea. Johnny was a bright guy, older and wiser than me by about 15 years. He had previously worked at Bank of America in trade finance and knew some English but didn’t want to call up the foreigners and speak to them every day. They asked tough questions that nobody in Taiwan asked and it was uncomfortable. Johnny liked calling his local clients and sharing the latest tips with his plugged in friends. He really didn’t see the point of talking to some MBA graduate based overseas who didn’t understand Taiwan. Johnny saw me and Johnny saw his problems were over.
My First Call
“Here,” Johnny said, putting a phone in front of me.
“Call Morgan Stanley.” (Morgan Stanley Investment Management was the largest foreign institutional investor at the time in Taiwan. The Taiwan money was run out of Singapore).
Conscious that both Johnny and Number Two were standing there smiling expectantly, I sat down, picked up the phone and began to dial the number Johnny handed me.
“What do you want me to say?”
“Sell them something!”
The phone started ringing. I cleared my throat. And there it all began.