Considering the stick the we dish out to most other Europeans for their long summer holidays it is remarkable how quiet the City can be at this time of year.
Although a handful remain behind, by third week in August activity levels have dropped remarkably and trading is thin. The data to support it is hard to find, but that’s probably because the interns have been left in charge.
Despite their reputation for incessant toil, it is even worse in the US! Clients in New York on a Friday in August are rarer than hen’s teeth.
How the Americans do it
Across the Atlantic, the place to be and be seen is the Hamptons, a stretch of seafront towns in the far east of Long Island, New York. Known as the Summer Colony, The Hamptons has three of the top ten most expensive zip codes in the entire US and the population of the town of East Hampton swells to four times its normal size in August.
Many fund managers decamp entirely for August (New York can be insufferably hot for billionaires in the summer, apparently) and spend the month working in flip-flops from their palatial beach-front offices. As ever with anyone “working from home”, we really suspect they are on the golf course.
For those who have to remain in the boiler rooms of Wall Street during the week, for a mere $1,600 there is a helicopter shuttle direct to East Hampton, leaving Friday afternoon and returning Sunday evening. Or you can charter a private one.
Sandbanks – the British Hamptons?
Inevitably, things over here are a little more, well, naff. When I asked around for the European equivalent I was told Sandbanks, which given it lists its most famous resident as Graeme Souness, I’m not sure is in the same league. The Cote D’Azur is probably closer, or increasingly the chi-chi countryside of the Balearics, but there definitely isn’t the same cache. If you’re a hedge fund manager in London worth your salt, better just to get the private jet direct to the private airfield in East Hampton.
For those left behind there are two broad approaches to the situation. It can be a good time to reminisce about the good old days of boozy lunches, pencil-and-paper spreadsheets and easy bull markets, over a long boozy lunch. Even less productive, my colleague (no names) is currently watching a youtube video of a mechanical dinosaur being tortured, to see if humans feel empathy for robots. And when everyone returns we’ll tell them what a great opportunity it was to get some ‘real’ work done.
Alternatively, for the eagle eyed and fleet of foot it can be a time for opportunity. I have heard of at least one hedge fund manager who rolls up his sleeves in August, taking positions when he thinks things have gotten too far out of line, and then heading off on holiday in September when everyone else realised the discrepancies and his profits would start flooding in.
Smart trades happen in August
Because the thing is, big geopolitical events seem to congregate in August.
World War I started in August, Hitler invaded Poland and more recently Saddam Hussein launched his assault on Kuwait. Here we are again, with the situation in Israel flaring up, the Ebola outbreak in West Africa and the ISIS uprising in Iraq. With thin market volumes this can spice up the volatility and offer up opportunities that would not normally persist for long enough.
That is the kind of attitude that gets you a place in the Hamptons eventually. At least, we think that is the case; we’re not really paying attention.