Investing in the stock market can be a lucrative venture, but it also carries the risk of significant losses if one lacks the expertise.
In a recent story, an employee at a high-tech firm, who enjoys investing, is asked by the owner to handle some of his personal funds for investment.
After some time, it becomes clear that the owner doesn’t fully grasp the situation, and the employee capitalizes on this.
The narrative illustrates the complexities of their dynamic.
Here’s the background:
In the early 1990s, after taking a break from school, I found a job as a business analyst at a prominent family-owned tech company.
The business was thriving, positioned well within the tech boom.
Over the next decade, the company flourished, remaining in the hands of the family that had made it successful.
This family, wealthy and influential, was known for being rather anxious and quite tough in their business dealings, which I believe may have limited their broader recognition.
As I grew within the company, I interacted more with the owner, gaining insights and access that were not available to most employees.
During this time, like many others in the tech world, I was actively investing in tech stocks.
While discussing my investments was common, it was never part of my official job role.
Things shifted when, late in 1999, the owner approached me, asking if I could invest a portion of his personal wealth—specifically, he wanted me to take risks with $1 million of his funds.
I was a bit hesitant, but in my late 20s, I wanted to prove myself. I made sure to secure a written agreement outlining my compensation for this side gig—20% of any profits.
Unfortunately, my experience in the industry revealed weaknesses in many tech firms. Some seemed to be dwindling amid all the hype.
While I didn’t have insider info, my work gave me a solid sense of which companies might struggle.
Feeling confident, I started using both my and the owner’s funds to short-sell some tech stocks right after the New Year of 2000.
For those unfamiliar, short-selling means that when a stock’s price drops, the value of the investment actually rises.
Though I held some long positions, my overall strategy leaned heavily toward short positions.
The owner wanted a high-risk approach, so I utilized his money along with leverage from the brokerage managing both accounts, which were technically separate but under my name.
Initially, the strategy was slow to yield results.
In the first couple of months of 2000, both accounts began to rise, but the owner’s account particularly skyrocketed.
However, by June, the company faced a market downturn.
We were still in the black, but the overall economic weakness was beginning to influence us.
I kept my short strategy from the owner, who later inquired about his funds, assuming they had dropped just like the overall market.
To his surprise, I had cash tied up in options and shorts, and I revealed that his account had $1.35 million sitting in cash.
I still had open positions, but based on the closed trades, that was the amount available.
The owner, perhaps due to ignorance, expressed excitement about the $1.35 million but expected me to transfer it all to him. I explained that before wiring $280,000 to him, I was entitled to my share of the profits.
He didn’t seem to grasp this or the nature of the open positions and became irate over the $70,000 commission I claimed. He repeatedly emphasized my need to be grateful for my job, which struck me as a blatant misrepresentation of our agreement.
This wasn’t my first encounter with the greed often seen in ownership, but it was my first personal experience with it, and it left a bad taste.
Feeling wronged, I began to plot my next move.
In several conversations, it became clear the owner was oblivious to the value of my remaining open positions.
I sent him the full $1.35 million and leveraged my expertise to manage my remaining investments.
The kicker? The owner appeared to forget entirely about the open positions, thinking the $1.35 million was the account’s total value.
He never asked for any records or documentation, insulated in his ignorance.
After some time, I closed out the short positions, generating another $1.8 million.
I remained at the company for three more years, yet the owner never brought it up again.
I realize some may view my actions as questionable, but given his dishonesty over $70,000, I felt justified.
I paid the taxes on my profits and moved forward with a worthwhile financial cushion.
Interestingly, I shared this story with only a handful of people, waiting for the right moment post-legal restrictions.
The ironic twist? During my remaining time there, I gained a certain influence with the ownership, as I was seen as loyal for refunding the $1.35 million, all the while they remained unaware of my actual gains.
Eventually, the company dissolved due to family conflict, but they were left in a strong financial position.
They could have improved significantly if they hadn’t maintained the same unscrupulous dealings they’d shown towards me.
It’s been a wild ride, and one has to wonder—was my reaction truly justified?
Let’s see what Reddit thinks about this story.
Some readers appreciated it but questioned its validity.
Others believed I had every right to act as I did.
Perhaps it could even inspire a book someday.
Sometimes, it seems, you can end up outsmarting your boss!
Curious to see what unfolds when families offer free stays in exchange for babysitting?
