Ornoth

One of the things Americans rarely think about is history. Very few of us have any sense of what has gone on in our town, our neighborhood, perhaps even our building. In that sense, we Bostonians have a bit of an advantage, since Boston is a very small area with a long and rich historical heritage (for America, at least). Walk the streets of Boston and on virtually every block you’ll come across a building that has some noteworthy story associated with it.

I happened to buy a unit in one of Boston’s most noteworthy buildings. The initial Hotel Vendome was designed and built by William G. Preston in 1871 in Boston’s newly-filled Back Bay neighborhood, then greatly expanded in 1881. It is the finest example of the French Second Empire style in Boston, and located on the broad Parisien boulevard of Commonwealth Avenue. In 1882, it was the first public building in Boston to be furnished with electric lights. It was the site of many prominent social functions, and the guest register included stays by Ulysses S. Grant, President Grover Cleveland, P.T. Barnum, Mark Twain, Oscar Wilde, Sarah Bernhardt, and John Singer Sargent. In 1903 the visiting team— the Pittsburgh Pirates, led by Honus Wagner—stayed at the Vendome during the first World Series ever held. In a bit of synchornicity, both my mother’s and her sister’s graduating classes from nursing school held parties in the Vendome during World War II.

But that’s all nothing compared to the fire: the worst firefighting tragedy in Boston history, one of the twelve worst in all of U.S. history, getting an entire chapter in Stephanie Schorow’s “Boston on Fire: A History of Fires and Firefighting in Boston” which I recently read.

It happened on Saturday June 17, 1972—the day before Father’s Day—while the Vendome was undergoing a major renovation. The fire broke out in the upper stories, and eventually sixteen engine companies, five ladder companies, two aerial towers, and a rescue company fought the blaze. The fire was under control, and fresh firefighters were conducting mop-up operations when an overloaded beam under the second floor gave way and the entire southeast corner of the five-story building came down, killing nine firefighters, injuring eight more, and destroying a ladder truck. Two of the twenty-five orphaned offspring would go on to become firefighters.

Twenty-five years later, a memorial to the firefighters who lost their lives was dedicated on the Commonwealth Avenue mall. A long, low arc of black granite describes the events and gives the names of the men who were lost. A fireman’s helmet and coat are casually draped over the stone, but forged in bronze. Every year a brief ceremony of observance is held.

As a resident of such a building, it’s hard to forget its history. I live on that same southeast corner, surely within inches of the 40 by 45-foot section that collapsed. I live on the second floor, surely within inches of the resulting pile of debris, which was noted both as 26 feet and two stories deep. I live within inches of the place where eight men died.

Knowing that you are living in the middle of the site of such an infamous tragedy would probably be enough to freak a lot of people out. It doesn’t bother me, really. After all, I’m proud to live in a building with such historical significance. But there’s another reason why it doesn’t bug me: it’s because even though I wasn’t here way back in ’72, I still remember and honor those men, and I view my presence here not merely as just some place to live. I consider myself something of a steward of this very important landmark, and want to do my part to see that it is kept for future generations, and not forgotten in our uniquely American ignorance of who and what have come before us.

For more information and photographs about the Vendome fire and memorial, go here or here, or read “Boston on Fire”.

So whenever the topic of stock options comes up, I have this dilemma. When people learn that I sold my stock near the peak of Sapient's stock value, the usual response is "Boy, that sure was smart. I wish I'd been that smart."

Now, I'm torn about how to respond. Yeah, it was smart. Not that wisdom is the only factor that applied, and not that I can just say to my peers that their financial ruin is a very regrettable result of their lack of foresight. So instead, I usually say that a lot of it was luck, in that I was looking for a house at the time, and sold my stock in order to put as much down as possible.

But not wanting to brag about my wisdom is really just a social phenomenon, which I can put aside in this relatively private journal. Sure, there was a lot of good fortune involved in getting hired at Sapient before its IPO, but I made a number of decisions involved in managing and protecting that good fortune that demonstrated wisdom, foresight, and yes, intelligence. In order to support this conclusion that I'm so averse to admitting even to myself, I'd like to take a look at those decisions.

First, I had a strategy to my accumulation of Sapient stock. I exercised my stock gradually, doing my best to specifically minimize my AMT burden. I also held my stock as long as I could, so that I would avoid increased taxes on short-term gains. And I consulted an accounting firm in order to get the best advice I could on managing my growing assets and minimizing taxes.

Second, I made the decision to sell. Looking at my net worth as the millenium approached, I realized that 98 percent of my fortune was tied up in Sapient stock. No matter how well your company might be doing, that's just stupid. Although my stock had appreciated to an astonishing degree, it was still an unrealized gain that was entirely at risk, and a very high risk at that. I made the decision to sell and put my assets into a condo about a year before I actually sold my stock. At that time, I predicted that the speculative Internet bubble would undergo a whiplash negative counterreaction, as just about anything which becomes such a major trend inevitably does. I sold my stock in the autumn of 2000, a couple months before Sapient's competitors all began dropping like flies. I'm surprised that I looked at places for a whole year before I sold my stock; why my peers completely ignored the all-too-obvious warning signs just amazes me.

And finally, I didn't waver from the thinking behind my decision. A number of people pointed out home financing alternatives that might have been attractive in other circumstances. For example, I surprised many people by offering a down payment of more than two-thirds of the purchase price of my unit, when I could have put nothing down and kept my stock (and also paid a lot more in mortgage interest). Similarly, I was offered a stock-backed mortgage, where my stock would have served as collateral for my loan, and I would have been able to retain ownership of my stock. Either of those options would have had tragic consequences, and I didn't avail myself of them becuase they violated my primary reason for buying a house: cashing out of my risky Sapient holdings.

So although there definitely was some luck involved in my joining Sapient and in the tactical timing of my sale, I think I should be able to gracefully acknowledge that I demonstrated wisdom, foresight, and intelligence in how I managed my financial assets. The fact that I'm so well off now isn't just the result of dumb luck, when the majority of my peers have watched their fortunes be destroyed, and in some cases owe fortunes that they don't have to the IRS.

I don't want to overgeneralize, but I think too many of my peers are whiny, priviledged kids who have never had to learn financial discipline, responsibility, and independence. If you want to avoid a hand-to-mouth existence, have a retirement, and live well, you need to respect your money and where it comes from, and learn how to protect it. That's the wisdom that I have which produced, for me, such a better outcome than my peers.

Of course, that doesn't mean I'm going to lord it over them when the topic comes up; I'll still be careful to avoid any implication that my friends' financial woes are the result of their own shortsightedness. But I needed to write this journal to clarify to myself exactly what degree of conscious control I had over the outcome, and by implication, whether I really was being smarter than most of my friends or not.