A Purim Tale: Part VII

The Story So Far: Haman is surprised to learn that his bitter rival, Morty Kai, has been named the inaugural winner of the king's "Fund Manager of the Year" award...and that Haman himself must participate in the award ceremony.

At the golf course that day, on the 13th hole, the king once again asked Esther, “What would you like to discuss about my investments? Any logical recommendation, even one covering up to 50% of my investable assets, and it shall be put in place.”

Esther paused, and then said, “Your highness, I need to warn you about a terrible impending calamity that will befall the markets. There is someone who is attempting to squeeze a certain type of investor out of the marketplace, in the process creating an enormous asset bubble, from which he will profit greatly. At first, everyone will feel good about things, watching the paper value of their portfolios climb inexorably higher. However, once this fund manager’s pump-and-dump scheme has run its course, and he closes out his positions, the markets will crash, and the domino effect will roil all of the kingdom’s markets for the foreseeable future. Investors will lose confidence in the markets, credit will tighten, the increased borrowing costs will put a major damper on overall economic activity, unemployment will soar, and your Treasury will nearly be depleted trying vainly to single-handedly prop up the economy.”

Upon hearing this dire forecast, the king demanded to know, “Who is this person, who seeks to gain personal financial benefit at the expense of the public?”

Esther pointed at Haman and said, “It is him, the evil fund manager Haman!”

As she spoke these words, the king, in his surprise, badly sliced his tee shot, sending the ball deep into a thicket of trees approximately 50 yards to the right of the fairway. He angrily flung his club as far as he could, and stormed off.

Haman knew that he was finished, and that he’d never be able to raise funds in this kingdom again. Still, acting out of desperation, he approached Queen Esther where she sat in the golf cart, and did the only thing he could do…he offered her a job. “How much is he paying you?” Haman asked. “I’ll double it, guarantee your bonus for the first three years, and give you about 3% of the firm’s equity. We’ve already registered for the IPO. The S-1 was filed last week. I’d expect that we’ll go public by the fall, depending on overall market conditions, of course.”

Queen Esther was not swayed. “A publicly traded hedge fund? Is that even possible?” she asked. Haman had just begun to walk her through the highlights of his investment bankers’ pitch book when the king returned. Hearing part of their conversation, he flew into a rage.

“I can’t believe this! Not only are you planning to cause the collapse of the entire financial market superstructure, but you’re trying to hire the Queen away, on my golf course!? Are you kidding me?”

On the spot, the king fired Haman, and demanded that he disgorge all of the trading profits and fees he had earned while managing the king’s money.

At this point, Charvonah, who had been serving as the group’s caddy, mentioned to the king that Haman had also conspired to get the clearing house to cancel Morty Kai’s credit line, thereby effectively shuttering his operation. This, after Morty Kai had blown the whistle on what could have been a major insider trading scandal, averting an enormous financial and public relations disaster for the king.

Hearing this, the king permanently barred Haman from the securities industry, and forbade him from ever holding an officer or director position at any publicly traded company.


After this, Queen Esther formally introduced King Ahasueres to Morty Kai, pointing out that he was her mentor, and the person she would most often consult on investment matters. The king put Morty Kai in charge of his entire portfolio.

Morty Kai and Esther then worked with the king and the regulators to undo the mark-to-market regulation, which was still poised to go into effect. Unfortunately, according to Persian law, repealing such regulation would require a 2/3 majority of the parliament. As there were many within that body who were still loyal to Haman, scores of legislators simply left the kingdom for a “vacation,” so as not to be present for the vote, thereby blocking any legislative action.

Undaunted, Morty Kai and Esther obtained a temporary restraining order from a sympathetic royal judge, thereby putting the mark-to-market regulation on hold indefinitely.
They then requested that Haman’s ten sons, who worked closely with their father at Amalek Capital, and were therefore certainly aware of his evil plans, also be banned permanently from the securities industry. This wish was also granted by the king.

Thus was chaos averted and order restored to the kingdom and its financial markets, and the people rejoiced. The day was forever commemorated with the consumption of food and drink and the sharing of stock tips between each man and his fellow. The resulting improved information flow had the effect of allowing the markets to assimilate all information, both public and non-public, almost immediately, greatly increasing market efficiency. This put the professional arbitrageurs and high-frequency traders out of business, but no one had ever liked them much, anyway.

Morty Kai and Esther then crafted the foregoing story into a best-selling book (receiving a large advance from the publisher). The book, which received almost unanimously favorable reviews, soon became an essential part of business school curricula throughout the kingdom, serving as a cautionary tale for generations of investment professionals.

And Morty Kai the fund manager, assisted by Queen Esther, managed the king’s portfolio for many years to come in a prudent manner, generating positive risk- and inflation-adjusted returns and soundly outperforming his benchmarks.

THE END