George K. - I can certainly appreciate your point of view. And please don't think of me as a Datek apologist. Those who have followed my posts on this board, know that I've been scathingly critical of Datek's shortcomings. I have been a Datek customer since the beginning of 98, and have experienced the good, and endured the bad. As a very active trader, I've had my fair share of the famous Datek problems, that have cost me dearly in money, time and frustration. Yet, I do on occasion defend them, if I think the criticism is unfair.
My view of Datek is in the context of the brokerage industry in general. For the money, Datek *can* be a tremendous value. *When it works*, it is the fastest, gives you the best executions in the business, and it's accounting updates in real time. This may not seem much, but believe me, it is a whole lot. I have researched many brokers, and I am currently trading with several, including a direct entry broker. Of course, the tragedy is that all too often it doesn't work - so often in fact, that I find myself increasingly drifting away from trading with Datek.
I understand your point of view re: the image. The whole reason why "image" exists, why bankers dress and behave the way they do, why brokers dress and behave the way they do, is precisely because they want to project an image of stability, responsibility, success.
So far so good. Trouble is, I've had quite a bit of experience with "image" - having worked on the business side of the entertainment industry where image is the very life blood. I also have a lot of friends who work in Silicon Valley. Lemme tell ya... you quickly learn who is who - people tend to fall into "types". When a group of people come into a venture capital firm in SV, you can generally divide them into two broad categories: management, and creative. This is a very broad division, and there are many nuances, but for our purpose, this will do.
The management guy - the face to the corporate world, the guy who talks to bankers, is the "suite" - yeah, he's slick, he's polished, he's a pro, he's got image.
Then there is the ideas guy - the guy behind the product, the engineer, the programmer, whatever. Believe me, there is a reason why this guy needs to hire the management guy... he can't walk into a bank without getting arrested. These guys are often folks who have spent their formative years hunched over a computer, and as a result, are somewhat underdeveloped from the point of view of social skills. Their development has been arrested - they are immature, tend to be goofballs, nerds, geeks etc. But make no mistake - just as you need the management guy to extract money from the product, so too you need the product itself. Having had a fair amount of exposure to Silicon Valley, believe me, you'd quickly lose your attitude about the "immature" goofballs. These guys are the oxygen of high-tech. Have you ever looked at the ranks of the top inventors in SV? Have you interacted with them? Do you know how young the guys behind f.ex. Yahoo are? Do you know how goofy many of these guys act? Just because they act like 10 year olds doesn't mean their products are not brilliant - often it is the young goofballs and nerds who revolutionize the industry and become billionairs in the process.
Do you know the story behind Datek? Yep. Same idea. Young punks who were good at programming put together a system that became a trader's state of the art dream. The guy whose pictures you found at that site, Josh, is the fellow who was responsible for a lot of the programming. Call him the goofball. He is not in charge of your money. He would be immediately recognizable to folks in Silicon Valley - the nerd who was the key behind the product. Of course he acts silly. Of course he is immature. All the things you say are true. But he is also in large part responsible for the revolution this industry has experienced - don't underestimate him. Nor overestimate. Place him in the proper perspective - the goofball programmer without whom this venture couldn't exist. But don't overestimate him - don't expect him to act like a "suite". That's not his job. There are others who do that.
In other words, you stumbled upon the "goofball" part of the team. You shouldn't draw conclusions from this about the whole venture. If everybody thought about these things from the conventional "image" perspective - there would be no Silicon Valley, you'd miss out on Yahoo and thousands of other companies. Survival has taught smart venture capitalists never to judge people by their "image".
Believe me, Datek as part of the internet revolution in the brokerage industry is every bit as cutting edge as any high-tech venture in SV.
And the stuffed shirts that are masters at projecting "respectability" are running scared. BTW, Merril Lynch just announced they are going to do online trading as well. Yep, if you drew the lines far enough - you'll see the clear connection between the goofball Josh, and the stuffed shirts at Merril soiling thier Armani pants.
The issues facing Datek are far more serious. For the first time a mortal threat has faced them - other online brokers are finally poised to catch up. Etrade - who is still far worse IMO, may no longer be worse, but may overtake Datek. Not only are they offering LII, but soon they will have their own ECN through ARCA. And they offer a better short list. If Etrade can straighten out their act - improve executions, accounting, reliability etc. - Datek may find itself outflanked... an early pioneer who didn't evolve and improve. That will be a tragedy - I confess, part of my loyalty to Datek springs from their great service to traders everywhere with the invention of ISLD. But alas, the day may come soon, when loyalty and old "good deeds" are simply not good enough. The developments with other ECNs, NYSE, extended trading etc, put the future of ISLD into question. I'm not saying all is lost, but transformative times are coming upon us.
Anyhow, this is getting to be tangetial - my point is, Josh is OK - and no source of concern to me. He is not in charge of our money. He's just a kid - great programmer, but still a kid. Let him enjoy his $$$ - he's earned it.
Regards,
Morgan |
