Insider Trading in the Caddyshack

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Dear readers, while Silicon Valley's dot-com fortunes were supposedly made in fluorescent-lit boardrooms and IRC channels, the real alpha flowed across the fog-shrouded fairways of a club we’ll call Crystal Ridge, where tech titans felt invisible enough to speak freely. This was Silicon Valley's true trading floor, where information moved faster than a long drive champion’s swing speed, and where one young caddie learned how to read people as well as he read greens.

At Crystal Ridge, where membership required both significant wealth and a connection to the Valley's tech scene, the caddies learned quickly that the best tips didn't always come in cash form at the end of a loop. Our source, whom we'll call Jake, discovered this one foggy morning in 1998 while caddying for a group that included two software executives from competing public companies and their regular fourth, a managing director from a bulge bracket investment bank.

"Nobody's thinking about the real security stack," one executive said while waiting on the fourth tee, adjusting his Netscape windbreaker with the same rehearsed casualness he'd used in board presentations that morning. "We're buying CompuGuard next week - their firewall tech actually works, unlike that garbage from [REDACTED]. We’re buying it at double the market price, but it’s worth four times that." 

Jake pretended to study his pin sheet, a skill perfected through countless rounds of being simultaneously essential and invisible. His mind raced past the day's yardages to exponential possibilities. He'd been saving his tips for community college, but maybe there was a better use for that money than learning about Y2K compliance.

Jake's E*TRADE account opened as easily as a root terminal, but his hands shook as he entered the trade. This wasn't parsing log files in the computer lab anymore - this was real money, real risk, real reward. When the acquisition was announced, CompuGuard's stock doubled just like it was supposed to. More importantly, Jake had learned a valuable lesson about his invisible status on the course. Like the best caddies, he was simultaneously everywhere and nowhere, a ghost in the machine of Silicon Valley's elite.

For the next two years, Jake became a student of human nature as much as a caddie. He learned which CEOs liked to brag about their market share, which board members got loose after their second Glenlivet at the turn, and most importantly, how to be the perfect caddie - present enough to serve, invisible enough to observe. A well-timed "Great shot, sir! That reminds me of the drive you hit on sixteen last week when discussing your enterprise strategy" could keep a conversation flowing just when it was getting interesting.

The caddie yard became its own kind of trading floor, with Jake as the reluctant broker. Every looper had a tip, a theory, a sure thing overheard on the back nine. The real skill was parsing signal from noise, just like the server farms their players were building. His network grew organically, each caddie adding their own channel of market intelligence. His grandfather's retirement account mysteriously outperformed Softbank's. His mother's teacher's salary somehow funded a vacation home. The money was flowing as freely as the Cristal at Qualcomm's holiday party.

By early 2000, even the course superintendent was day trading. Jake noticed the pros spending more time checking stocks than swings. Warning signs as clear as spike marks on a freshly cut green. But like many who rode the dot-com wave, Jake confused a bull market for brilliance. When the NASDAQ peaked in March 2000, he was still going all-in on every merger rumor he could get, ignoring the way executives' golf games were getting erratic, their conversations more focused on cash burn than course management.

The same executives who had casually dropped millions in market-moving information between shots were now falling off the membership roster faster than their companies' stock prices. Jake watched his paper fortune evaporate like the morning dew on the first tee, learning too late that in both tech and golf, the fundamentals matter more than the hype.

These days, Jake tends bar at a club in the Midwest, where the most valuable tips come in cash and the most interesting conversations are about local zoning laws. He's doing fine - the crash didn't take everything. His Amazon shares (overheard at the range: "Books are just the beginning") paid for a decent condo, though he still kicks himself for dumping Apple at twelve bucks when he heard a board member call it "a rotten fruit with no juice left."

Sometimes, when he's closing up and catches a glimpse of the caddies coming in from their last loop, he wonders if any of them are really listening to what their players are saying about Bitcoin.

Remember readers: the real insider information isn't only traded in boardrooms or halls of congress - it's sometimes whispered between shots on the back nine. And while timing the market may be a fool's game, some of the best returns can come from quietly observing those who think no one's watching.

Poll Question

Last Week's Poll Result

Do you always lock your locker, car, front door, etc.?

🟩🟩🟩🟩🟩🟩 🔒 Hell yes! I don’t trust anyone in a club that would have someone like me as a member.

🟨⬜️⬜️⬜️⬜️⬜️ 🧐 Sometimes! Depends on what I’m protecting.

🟨🟨🟨⬜️⬜️⬜️ 🤷‍♂️ Never! I ain’t got nothin’ worth takin’.

More than half of you have trust issues, which is good in today’s world. We do too. For those of you that “ain’t got nothin’ worth takin" may we suggest you comment in the poll above - you just might change your fortunes and end up with something nice coming your way from the CCC!

A big congrats again to Jake T. for his winning comment last week - “I ain’t got nothin’ worth takin’ but I still lock it up because one man’s trash is another man’s treasure - and from that other man’s point of view, I’m sitting on a gold mine!” Bravo Jake T, bravo 👏👏👏