Melvin Van Peebles is known as a jack-of-all-trades. Even so, the militant-movie maker turned Wall Street trader was skeptical when a publisher approached him about writing a book on how to make money in the options market.
”I thought they wanted me to write an exploitative book, `These Hands:
From Cotton to Cash,` ” Van Peebles said.
However, Van Peebles, who made the 1971 box-office hit ”Sweet Sweetback`s Badasssss Song,” took on the project anyway, after being assured that the book wouldn`t focus on his experiences as one of the only black options traders on the American Stock Exchange.
His new primer on options trading, called ”Bold Money,” represents another milestone in a career that has stretched from Paris to Hollywood and encompassed movies, plays, records and novels. It confirms Van Peebles`
reputation for trying almost anything.
Van Peebles ”knows no limits,” said Thomas Russo, an attorney in the New York law firm of Cadwalader, Wickersham & Taft. ”Melvin is one of the few people I`d categorize as a Renaissance Man.”
”You never know what Melvin is going to do next,” added long-time friend Henry Jarecki, chairman of Mocatta Metals Corp., a major bullion-trading firm.
The main similarity between the angry Van Peebles of Sweetback fame and the tamer author who recently toured the country peddling his new book seems to be a flair for self-promotion.
In a recent interview in Chicago, Van Peebles was dressed in two-thirds of a three-piece suit (jacket, vest and unmatched cordoroy pants) and sported close-cropped hair and a modest moustache. ”I look nice and humble in photos, something like their Uncle Ben,” he acknowledged.
Nonetheless, Van Peebles denied that his new toned-down image conflicts with the anti-establishment message of Sweetback. He said the common thread in all his ventures has been an ability to use figures.
”I was always earning money. I`m just doing it in a different money arena. Sweetback represented an economic tour de force because I had no partners; I own it. . . . Therefore the leap is nowhere as large as it seems,” Van Peebles said.
”If I was just a creator, I would still be back in the Lincoln annex in the Post Office.”
The Chicago-born Van Peebles, 53, has come a long way since those days as a postal clerk in San Francisco. His resume lists stints as a navigator in the air force, an astronomy student in the Netherlands and a journalist in Paris. A year before Sweetback, Van Peebles directed the late Godfrey Cambridge in the movie Watermelon Man.
Sweetback, the story of an innocent black man who avenges the death of a friend by killing white policemen, was praised as a revolutionary work and criticized for triggering a rash of so-called ”blaxploitation” movies, exploiting black rage against whites.
However, its success was undeniable. The movie, with Van Peebles as its producer, director and star, reportedly reaped a gross return of nearly $10 million on an investment of $500,000, although the figures can`t be confirmed by Variety, the trade publication.
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Since Sweetback, Van Peebles has produced two Broadway musicals and several off-Broadway shows and written screenplays for television. He manages to keep his productions afloat despite mixed reviews from critics, who often regard his plays as innovative but undisciplined.
Despite his demonstrated skills as a dealmaker, most observers were still surprised when he surfaced as an options trader in 1981. Van Peebles said he ended up on the Amex after losing a bet with Jarecki about the return on a joint-business deal.
To pay off the wager, Van Peebles was required to take a test to become an options trader. Said Jarecki: ”I was curious whether it was possible with a certain kind of energy and sharpness to do well without academic training.” Van Peebles flunked the test, but later hired himself out as a clerk on the floor of the Amex so he could learn enough to pass. ”If I had to find one characteristic that is most symbolic of me, I think I am tenacious,” he said. The overwhelmingly white trading population wasn`t aware it was hosting a cult figure, but young black and Hispanic clerks flocked to Van Peebles. Traders wondered ”why everybody was talking to that old clerk,” he said.
Van Peebles traded options for three years, using a membership owned by Timber Hill Inc., a firm in which Jarecki has a stake. He relished the
”rigidity, the cut-and-driedness of it. It`s one of the jobs I happen to like.”
What Van Peeble dislikes is divulging any information about his personal finances. Though ”Bold Money” blasts Wall Street moneymen for cloaking their dealings in the ”mists of moolah,” he refuses to discuss how much he made as a trader or in his artistic endeavors.
The publisher, Warner Books, clearly doesn`t hope to sell the book based on Van Peebles` past accomplishments. The jacket contains no photo of the author and doesn`t mention Sweetback by name.
There is only one oblique reference to the fact that Van Peebles is black. ”Many people feel obliged to try to speak ghettoese to me,” he notes at one point.
”It`s not a black book; I prefer it just to be looked at as a straight book, period,” Van Peebles said. ”There is obviously not a preponderance of black financial experts. Very few things happen outside a historical context.”
Aimed at readers who know nothing about puts and calls, the book offers a refreshingly irreverent look at the world of options trading. There are numerous jabs at Wall Street pretensions, including the need to distinguish supposedly respectable speculation from unsavory gambling.
The book also skewers what Van Peebles refers to as the ”party line” on Wall Street, the need to portray trading as a ”sacred calling.” Traders
”are obsessed with having a guilt-free but weighty position in the universe,” he stated.
Van Peebles is at his best when he explains the economic concepts of options trading in simple terms. One example involves a Mississippi boy named Harvey who in effect buys a call on apples, a contract granting him the right to buy a basket of apples at a specified price. He buys the call because his big toe tells him it will rain soon, restricting the supply of apples to market and raising the price.
However, his guidelines for investing fall short of the book`s promise to ”show you the way to become rich from the comfort of your own home.”
The advice to only buy options, for example, may be sensible for beginning investors because risk is limited to the price, or premium, of the option. The book argues reasonably that home investors waste their time by studying computer formulas on options values because professionals can more easily take advantage of price discrepancies.
But Van Peebles provides no real strategies for picking winning purchases, and he downplays the substantial risk of simply losing the entire premium. And the chapters on complicated options strategies seem out of place in light of his warning that beginning investors should stick to the basics.
Van Peebles left the Amex at the end of 1984 to write the book and doesn`t plan to return to the floor. He said the decision reflects a desire to use his time for other pursuits rather than his record as an options trader.
”The time constraints are so limiting to have to be there physically six hours a day,” he said. ”Those are big chunks out of a busy day.”
His current plans include directing a music video for a ”rap” group called Whodini. He has written a sequel to Sweetback but so far found no financial backers. Van Peebles, who runs eight miles a day in Central Park, has participated in several marathons.
And he recently traveled to the Pacific island of Fiji. ”When I step out in the street and get hit by a truck, I didn`t want to say I never got to Fiji,” he explained.