For some it is a myth, for me an unscrupulous crafty, today I will tell you the story of Jordan Belfort, The Wolf of Wall Street (Part 1).
I think many of you will have seen Martin Scorsese’s film with American actor Leonardo Di Caprio, The Wolf of Wall Street that tells the story of a trader who became rich and famous at the age of 27.
We’re talking about the true story of Jordan Belfort, it sounds like science fiction but it’s the reality, it represents the embodiment of American success in trading: money, beautiful women, I add drugs (you’ll understand after the reason). I’m laughing because the Wolf of Wall Street has returned to the spotlight by selling marketing and communication courses to companies and people who want to do high-level training.
Born in 1963 in New York City to a modest family, in 1970 they moved to live in Bayside near Atlantic Ocean in a middle-class American property.
As a child Jordan Belfort had a panic crisis and struggled to sleep, but the thing that weighed in his head was the origins, Jordan was Jewish and was a bit ashamed, unfortunately for him he was not part of the “Wasp Jews” who have power in New York and live in the upscale neighborhoods of Manhattan.
Jordan Belfort suffers from this situation on a psychological level and creates a complex of inferiority compared to the “rich” boys of his age, then not giving up at the age of 16 during the summer (one of the hottest in New York) buys 2 refrigerator bags and starts selling ice cream in the park near home.
Already in his teenage years, he noticed talent he had for the sale, after two months he came to earn 20,000 dollars, this money allowed him to enroll at the University of Baltimore, driven a lot by his mother who wanted him to do a medical school. On the first day of college during the presentation, he listens to a professor’s speech that says: golden days for dentists are over, then Jordan replies: what am I doing here?
Immediately he dropped out of university and in 1983 he launched into trade, selling frozen meat and products, becoming the best seller of the company. A short time later he founded his own company thinking of earning a lot of money and actually the first months give him reason, he starts with 1 truck then buys 26, at the age of 21 he finally buys a red Porsche.
This for him is a social rematch, unfortunately Jordan Belfort is blinded by money and his company begins to make debts with suppliers until he is obliged to close it.
A friend of his after a few years advises him to look for work on Wall Street, I remind you that it was the golden years as in the Michael Douglas film where so many traders had become millionaires, where money, greed and power were the only goals. In 1987 Jordan Belfort dressed up elegantly and went to 5 Avenue looking for work at LF Rothschild, during the interview he impressed his interlocutor and was hired.
The next day he starts as an intern and enters the legendary Boiler Room of Wall Street, imagine a huge crowd of traders screaming I buy, I sell at a hellish pace, after 6 months of internship passes the exam to become a trader.
On October 19, 1987 Wall Street collapses and Jordan Belfort as many traders are fired, you have to start again from scratch, in a newspaper reads the announcement of a company outside Wall Street working on the Over the Counter market. Over the Counter markets share shares where there are no standard rules of the Sec (the authority that controls trades), but the listing is provided by the Financial Regulatory Authority.
In these lists you will find the famous “penny stocks” or small companies that have a lot of volatility in the markets and are worth less than 5 dollars (Pink Sheet listing).
Jordan Belfort works for a small broker Investors Center, after a short time founding with his friend Danny Porush the company Stratton Oakmont, the name is chosen specifically to give the idea of respectability, the headquarters is in a garage on Long Island near Investors Center.
To begin with, Jordan Belfort and Danny Porush hired 12 longtime friends from Bayside, these guys didn’t know about finance, and after a few months Jordan created a manual of sales techniques: Straight Line Persuasion System that allowed them to anticipate questions from potential customers.
Employees had to learn this manual that then proved decisive in sales, after 1 year Stratton Oakmont moved its offices to Long Island 1979 Street, the strategy was to be away from Wall Street and hire “naive” employees just out of high school.
I remind you that in the United States to become a trader you have to pass an exam, many guys could not pass it and Jordan Belfort paid experienced traders who did the exam for them. The atmosphere in Stratton Oakmont offices was a delirium, screaming, women and drugs.
Do you know that most traders on Wall Street use drugs? Coming up I’ll do a chapter but it’s the truth, the human body has limits and drugs help pass them.