When he had finished writing his autobiography, the economist Thomas Sowell, a high-school dropout who would later graduate from Harvard and the Chicago School of Economics, asked his daughter, who was reviewing the book, how she thought he had managed to “make it.”
“Luck,” was her reply.
The same thing could be said about Stuart Wheeler, whose own autobiography, Winning Against the Odds, was published last week. Put up for adoption at birth, the IG Group founder also very nearly had his head blown off by a stray bullet during his national service in Egypt.
But unlike Sowell, a black orphan in 1930s North Carolina, Wheeler had a pleasant upbringing. Adopted by the scion of a wealthy American banker, IG’s founder attended Eton, served in the Welsh Guards and studied at Oxford, before embarking on careers in law and merchant banking.
Winning Against the Odds follows Wheeler on this journey, one that would eventually lead to him founding IG in 1974 and, a quarter of a century later, becoming the biggest donor in the Conservative Party’s history.
Drinking with Rothschild
One of the more remarkable features of the book is just how many prominent figures of the last century Wheeler has encountered. He was in a drinking club with Jacob Rothschild, stayed with PG Wodehouse in America, gambled with Omar Sharif and played bridge against Lord Lucan two days before his famous disappearance.
Celebrities aside, the common theme of the book – as its title suggests – is gambling. From his time in Eton up until the present, Wheeler has been a keen gambler, playing everything from poker and blackjack to betting on horses and stock prices.
“I do not [gamble] because I am addicted,” he writes. “I gamble because I am fairly good at it. I gamble because I have a very strong desire to succeed. Most of all, I gamble because I am fascinated by probability and odds.”
This is all a breath of fresh air. Throughout the book, Wheeler never attempts to hide the fact that IG was – as it still is – a bookie of sorts, that allows its customers to bet on outcomes in the financial markets. Executives at today’s retail ‘brokers,’ that don’t actually broker anything, could learn something from the old man.
Going for broke
It’s Wheeler’s anecdotes about IG’s early days that make for the best reading, at least for anyone interested in the retail trading market. The company’s name, for instance, was supposed to be Investors Gold Index but the UK regulators would only allow it to be named IG Index.
Wheeler also struggled to find a broker that would let IG hedge its customers’ bets in the underlying market. Eventually, Mocatta and Goldsmid, a company owned by two of his bridge partners, said they would be willing to help.
Once the firm had been set up, the first few years of IG Index mainly consisted of Wheeler and a telephone. The nascent company nearly went out of business several times and, on one of those occasions, Wheeler only managed to keep things going by winning £600 in a game of bridge.
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Some of the stories that the IG founder recounts are still relevant today. Unable to hedge a huge bet on the price of silver in the mid-1970s, the company would have gone out of business had the commodity gone up in value. Fortunately, it didn’t.
The reverse happened after the 1987 stock market crash. As clients saw the value of their bets nosedive, many refused to pay for their losses. Luckily for IG, a piece of legislation had just passed that required them to. Had the crash happened months earlier the group probably would have gone bust.
Battling for Brexit
Unless you are, like most of our readers, an executive in the retail trading industry, Wheeler’s descriptions of IG Group’s early days will likely be of secondary importance to his role in politics.
In 2001, he became the largest political donor in history when he gave £5 million – approximately £8.15 million today – to the Conservative Party. Just under a decade later, he was kicked out of that same party for giving UKIP a £100,000 donation.
Since then, Wheeler has become synonymous with the UK’s efforts to leave the European Union. Given how much ink, both real and digital, has been spilled on the topic, I feel reluctant to urinate yet more content into the septic tank of Brexit journalism.
Suffice it to say that there is some interesting insider information here. Comments on Farage’s leadership style, a brutal criticism of Theresa May and details on the inner workings of the British political system all make for riveting reading.
Strangely, there is no mention of CMC Markets CEO Peter Cruddas. This is despite the fact that both Cruddas and Wheeler made their fortunes in the spread betting industry, both have been expelled from the Conservative Party, and both were treasurers of the Vote Leave campaign. Make of that what you will.
Leaving politics aside, what struck me, as I finished this book on another humid evening in Tel Aviv, was both the profound impact that Wheeler has had on the world and how lucky the retail trading industry is that it ended up working out for IG Index.
It’s an odd sensation to sit in a Middle Eastern suburb and think that, if an old Etonian hadn’t decided to set up a bookies shop in his Chelsea flat almost 50 years ago, you’d be out of a job. But that’s the case.
Wheeler’s decision to launch IG Index set in motion the series of events that would eventually create what we now know as the retail trading industry.
But the company very nearly failed to take off and almost went bankrupt several times. In his own life, Wheeler was also very lucky – how many children get adopted by ultra-rich parents that can send them to Eton?
Given how divided the UK has become over Brexit, it wouldn’t surprise me if some die-hard remainers don’t feel inclined to buy a copy of Wheeler’s book. But they should. Winning Against the Odds is not just the story of a successful businessman or political activist. It’s the record of a remarkable life and one well-lived.