A ‘labor of chagrin’

As Martha Stewart’s big top of a criminal trial begins to stir in Manhattan, David Denby knows that, come showtime, when the Goddess of Home sweeps into court, the country’s schadenfreude will kick in again with a roaring vengeance. Remember the glee that followed Stewart’s indictment in a stock-trading scandal in June, the jokes about how she might pretty up a prison cell?

Denby, film critic for the New Yorker, knows that the wags are bound to get their jollies as well at his own spectacular misfortune in the stock market -- not that he has been accused of criminal wrongdoing -- along with his ties to Stewart’s pal, ImClone Systems Inc. founder Samuel Waksal.

In his memoir, “American Sucker,” which is being released Monday, Denby writes about his white-knuckle ride through the world of technology and biotech investment, a place that shimmered with promise and then imploded; from 2000 to 2002, Denby lost nearly $1 million on paper.

And with brutal honesty, Denby, now 60, a father of two, admits that he lost his bearings as well. While managing to write regularly and well for the New Yorker and spend time with his teenage sons, he dabbled in Internet pornography, slept with a married woman and steadied his nerves at night with a cocktail of NyQuil and Xanax, a prescription medication for panic disorder.

Denby, a critic at heart, dissects his own judgment lapses with such abandon that one has to wonder: Is he at all self-conscious about starting his national book tour next week?

“No, I’m not worried,” he said in a telephone interview this week, slightly maniacal on a bitterly cold day in New York but good-humored. “If people think there’s a good voice in this story, that the writing is engaging and holds your attention, then I’m not worried about what judgments they’ve come to about what I’ve revealed.”

The release of “American Sucker” by Little, Brown happens to coincide with the start of Stewart’s trial and another round of media coverage on the early part of the decade when a stock market bubble fueled irrational exuberance.

Denby, who has taken down a Hollywood mogul or two, acknowledges that he’ll be in the line of fire as Stewart’s trial gets underway -- she faces charges related to her sale of ImClone stock, just before the biotech company’s major reversal of fortune. “I’ve been a critic for 35 years, and I’ve published a book before,” Denby said. “So you’re going to take your knocks, particularly if you lead with your chin. God knows I’ve panned enough people. It’s all part of the game, it comes with the territory.”

In 1996, Denby’s first book, “Great Books” (Simon & Schuster), chronicled his return to Columbia University, his alma mater, to rediscover literary classics. That critically acclaimed book helped Denby make a name for himself as a man of belles-lettres, the provocative intellectual; by contrast, “American Sucker” engenders a there-but-for-the-grace- of-God flinch at his unraveling.

“If the earlier book was a labor of love,” said Denby, “this was a labor of chagrin. I mean, I’m a proud man. It’s not easy to admit that I’ve been stupid about something.... Getting involved in the tech boom at the end was a very common mistake. Your judgment is affected in the middle of a euphoric period.”

Not to mention, in Denby’s case, a personal crisis.

“American Sucker” is as much a portrait of middle age and self-identity as it is an analysis of the psychology of the dot-com boom and the nouveau riche. Denby’s narrative of the market’s wild ride is wrapped into a meditation on aging and the end of a marriage and the nature of greed. Along the way, he throws in perspectives from the Old Testament, Goethe and German sociologist Georg Simmel.

Denby still was in love with his wife of 18 years, novelist Cathleen Schine, when she left him in 2000, having “mysteriously changed in her affections.” (She eventually moved in with a woman.) The split was amicable, but the void was searing.

In despair, Denby flailed about for something to hold on to and seized on the notion of trying to keep the couple’s seven-room apartment on the Upper West Side of Manhattan. He would jump into the booming stock market, try to buy out Schine’s half and keep a journal on his efforts.

Denby had inherited about $325,000 after his mother’s death, and had a few other assets to play with, such as a 401(k) investment. With newfound bravado -- diversification was for wimps -- he dove into unknown territory, the tech stocks of Nasdaq, and looked around for advisors.

In May 2000, Denby began attending the monthly soirees thrown by ImClone’s former CEO. At Waksal’s SoHo loft, he took in the Mark Rothko and Franz Kline paintings, the marble bathroom, the free-flowing champagne. Guests one night included Stewart, and on another night there were “beautiful Amazonian women with golden flesh and boots rising nearly to their hips.”

Denby already had shares of ImClone, which was on the rise, and would buy more, based partly on the news that the company was working on promising cancer therapies.

Throughout the book, he captures the insistent and pulsing tempo of the market, listing his own losses beat by beat: Jan. 1, 2000, cumulative net gain/loss: 0; April 1, 2000, cumulative net gain: $237,000....

But then the bubble burst. When the market collapsed, after Sept. 11, after Waksal and his other advisors got caught in a web of scandal, and after Denby’s paper loss exceeded $900,000, he began to retrench.

He scaled back his investments, moved to a smaller apartment and has settled down with a woman. “I’ve never been happier than I am now,” he said.

Denby, who hasn’t given up on the stock market, still rattles off the numbers with alarming speed -- in 2000, “on March 10, the Nasdaq [peaked] at 5,048 and then it started to buckle ... “; from that March to October 2002, “the Nasdaq dropped 80% of its value, to 1,114.... “

Driven by the buzz over hot stocks like ImClone’s, Denby also was seduced by the bourgeois culture of the New Economy. Even in being able to write “American Sucker,” Denby recognizes his position of privilege, that he is not in the same boat as the average investor or someone who lost his house or plunged into debt. (Denby didn’t lose property or borrow money to invest.)

“The best you can do,” he pointed out, “is to try to dramatize your own experience with this as vividly and as honestly as you can and hope it crosses paths with what other people have gone through, and maybe they will recognize little parts of themselves in what you’ve done.”