Do you think the mutual fund industry is going to change? The mutual fund industry is certainly sensitive enough to the whims of the investing public to find products
that will meet contemporary needs.
How do you handle a losing period? As is true for so many other questions in this business, there is no pat answer or formula. There is nothing
that can be articulated precisely enough to lead others in a certain direction.
In other words, one losing period may be sufficiently different from another so that, even for yourself, there may be no general wisdom that applies. Correct.
How did you get started as a fund trader? When I first got into this business in the late 1960s, I only had an analytical background. I was an agricultural
equipment and cyclical goods analyst at Loeb Rhoades. My business was started with two other fellows who were also
analysts. As our business grew, trading became more important. I became the trader for the firm, having had very
little trading background.
If you had very little experience, why did you become the trader? I probably wasn't as good an analyst as the other two.
Even in those early years, you did very well as a trader. How do you think you managed that without benefit of experience? My father has been a gambler all his life. Although I can't remotely justify it, I feel there is an element of
gambling in this business. Maybe I got that talent from my father.
You have traded the stock market for over twenty years. Have you noticed any significant changes during that time? The amount of intellectual power on the trading desks twenty years ago was minimal compared to today. The
institutional traders were typically kids from Brooklyn, who could hardly speak the language, made a minimum
amount of money, and had very little discretion. So when I first started trading, it was like taking candy from a baby.
I remember once a trader needed to sell 700,000 shares of Penn Central. At the time, the stock was already
in Chapter 11. The last trade was at 7, and the seller didn't bother to check the board. I bought 700,000 shares at
6'/
8
. The seller was relieved to sell that amount of stock at less than a dollar under the last trade. Meanwhile, I turned
around and sold the 700,000 shares at
61. 1 could have sold three times that amount at that price. I made a half
million dollars on that trade, and it took me all of twelve seconds.
