Freddie's Sandwiches, located on a sleepy corner of San Francisco's North Beach neighborhood, is an unlikely epicenter for the online trading world. But there's no other place in North Beach that better illustrates the pervasiveness of online trading and its effects on our world. And during the recent meltdown in technology stocks, and Internet stocks in particular, there was no better place to illustrate that much of America is in the grips of the Internet trading culture.
Freddie's, a tiny deli on the first floor of an apartment building in a residential neighborhood, is a hearty 10-minute walk from San Francisco's financial district. It's in something of a no-man's land. Walk 10 minutes in the opposite direction from the financial district and you land at Fisherman's Wharf. You could pass the place a dozen times without noticing it. It's open for just a few hours a day. The only sign is a perfunctory "Freddie's Sandwiches" painted on a window.
Fewer than a dozen people can cram into Freddie's at a time, and at lunchtime, hungry patrons descend on the shop; pick-up trucks and BMWs are often double-parked outside. Patrons linger into the afternoon on the park bench outside the shop.
Initially, it seems quite far from the world of daytrading. But the old Zenith TV next to the deli counter is tuned to
. The owner, Eddy Sweileh, a quiet man of Lebanese and Jordanian descent in his early 40s, is cordial with his regular customers yet at all times keeps one eye on the cash register, the other on the screen. While he's making his livelihood, he's also preparing for his pasttime.
Most mornings, long before the shop opens, Eddy is online by 6:30, ready for the 9:30 bell in New York. His
account is fired up and at the ready. He's not frenetic; many days pass without a single trade. But his take from a three-year-old
position has funded all sorts of moves, in and out of Internet stocks, the telcos, the B2Bs. He jumps into hot names and jumps out again before they can hurt him.
In 10 years, online trading has swept the nation. It was virtually nonexistent in 1990. But as the decade drew to a close, online brokerage accounts had grown to more than 23.1 million, according to a report by
Credit Suisse First Boston
. The same study said the major online brokerages -- led by
Quick & Reilly
and Ameritrade -- now hold more than $1.5 trillion in customer assets.
The Popular Crowd
Source: Credit Suisse First Boston
The affect on the markets has been widely felt. Online traders have been an accelerant in a volatile market, making professional traders take note when they start moving a stock. So when tech stocks began to come apart at the seams, it happened at places like Freddy's Sandwiches. "I lost a lot," says Eddy. "But some of my things, they come back. What are you gonna do? You just keep going in and find the right things. I'm still looking for things to buy."
But for Eddy, trading is just the appetizer to the lunchtime rush. While he trades on margin, he was able to limit his damage in recent weeks by getting out before it was game over. And there are always sandwiches to make. So at 11 a.m., while the market trades on,
market opens. He shuts down his machine and monitors
while whipping up sandwich after sandwich.
Part Two tomorrow.
Cory Johnson files weekly from TheStreet.com's San Francisco Bureau. In keeping with TSC's editorial policy, he neither owns nor shorts individual stocks, although he owns shares of TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Johnson welcomes your feedback at
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