WITH APOLOGIES TO BALZAC, students of business will be forgiven for concluding that behind every great fortune is not necessarily a crime but, at the very least, a swine. If nice guys don't finish last, they rarely build empires, and in fact monomania appears so often in accounts of business success that it's hard to believe its presence is mere coincidence.
Consider the outsized example of Michael Steinhardt. As one of Wall Street's most successful hedge-fund managers, his obsessive focus on performance made him the boss from hell, raging at subordinates and populating the Street with his firm's shell-shocked alumni. "All I want to do is kill myself, " says one chastened employee after mismanaging some bonds. "Can I watch?" Mr. Steinhardt replies coolly.
When a psychiatrist is brought in, the staff members he meets use phrases like "battered children," "mental abuse" and "rage disorder." But when the hapless therapist mildly interrupts one of Mr. Steinhardt's red-faced tirades, he finds himself swept out the door on a tidal wave of invective.
Mr. Steinhardt makes this case for his own swinishness in his modest and even touching memoir, "No Bull: My Life In and Out of Markets," and the result is a breath of fresh air in a traditionally windy genre. Although proud of his accomplishments—"one dollar invested with me in 1967 would have been worth $481 on the day I closed the firm in 1995, versus $19 if it had been invested in a Standard & Poor's index fund"—he dwells as much or more on his failings. He made a lousy soldier, can't control his weight or his temper, can't muster a faith in God to match his devotion to Judaism, and plunges into despair when he occasionally falls short of the impossible performance standards he strives to maintain.
Paradoxically, the picture that emerges from the author's unremitting self-assessment is of a complex, learned and ultimately decent human being determined not just to struggle with his demons but to do something meaningful with his wealth. (Among other things, he finances a key organization for moderate Democrats and launches a drive to provide a free trip to Israel for every young Jew in the world.) Although he was raised by his selfless and loving mother, at the heart of Mr. Steinhardt's story is the author's deeply ambivalent relationship with his father. Sol Frank "Red" Steinhardt is a character right out of Saul Bellow or Philip Roth. A compulsive gambler from a tough section of Brooklyn who dropped out of school when he was 12, Red was married to Mr. Steinhardt's mother only long enough for Michael to be born. The elder Steinhardt, to whom Michael would come to bear an uncanny physical resemblance, drifted in and out of his son's life, turning up at crucial moments with sharp advice or a dubious pile of cash (besides gambling and hobnobbing with mobsters, Red dealt in stolen jewelry). Michael Steinhardt's education at the University of Pennsylvania, where he graduated at 19, and his earliest stake in the stock market were both underwritten by his father.
Freudians will have afield day with this book, whose author clearly sublimated a familial predilection for financial risk into the socially acceptable outlet of the stock market. Mr. Steinhardt reports becoming obsessed with stocks during his impecunious boyhood and never letting go, even to this day, when he devotes himself mainly to charitable activities. Although he offers a cogent discussion of what kind of investments he looked for in his heyday, it's clear that at his Olympian level of achievement there are a lot of intangibles that the rest of us aren't going to learn from a book. Perhaps each of us just needs to get in touch with his inner monomaniac. (Wall Street Journal
, November 6, 2001)
INSIDE TRACK: A Wall Street deity: BOOK REVIEW NO BULL: Michael Steinhardt's autobiography reveals a complex and difficult man — and deserves a wider audience than those who want the secret of success in finance.
In the sweep of world economic affairs, Michael Steinhardt is a minor figure. His organisation never employed more than about a hundred people. It managed far less than a billion dollars in capital for most of its existence, followed by a brief period in which its capital ballooned to Dollars 5bn; still far below that of the global financial behemoths.
Yet he is an important figure in the Wall Street pantheon. His firm, Steinhardt Partners, was one of the few hedge funds to survive the collapse of the 1960s equity boom.
Steinhardt possessed opportunism without illusions, ingrained scepticism, agnosticism to being short or long, an aggressive trading mentality, relentless focus on short-term absolute profitability and an obsession with timely, legal information on stocks. In other words, he provided the model for much of Wall Street's burgeoning hedge-fund industry.
His story is worth reading by a wider audience than just those who would emulate his fabulous financial success.
Steinhardt's rise was meteoric. His independent Wall Street career started when he was one of three ambitious young men in a tiny office in 1967. It ended in 1995 when, with his fortune and reputation intact, he elected to walk away from high-profile money management, liquidating his firm rather than have the name continue without his direct control.
Moreover, he is a cultural archetype, a young man who, without much money or sponsorship, and with few connections or even mentors, forged his way to a vast fortune outside any big organisation. (PAUL ISAAC, The Financial Times, November 14, 2001)
.."This is one of the most honest autobiographies written by a leading Wall Street figure.." (Sunday Business, 2 December 2001)
"...Steinhardt has produced a well-written autobiography.." (Lloyd's List, 30 November 2001)
"..meaningful and moving book." (Jerusalem Post newspaper, 3 December 2001)
When the official history of twentieth-century Wall Street is written, it will certainly contain more than a few pages on Michael Steinhardt. One of the most successful money managers in the history of "The Street," Steinhardt far outshone his peers by achieving an average annual return of thirty percentsignificantly greater than that of every market benchmark. During his almost thirty-year tenure as a hedge fund manager, he amassed vast wealth for his investors and himself. One dollar invested with Steinhardt Partners LP, his flagship hedge fund, at its inception in 1967 would have been worth $481 when he retired from active money management in 1995.
No Bull offers an account of some of the investment strategies that drove Michael Steinhardts historic success as a hedge fund manager including a focus on his skills as an industry analyst and consummate stock picker. He also reveals how his uncanny talent for knowing when to trade against the prevailing market trenda talent that was not always appreciated by several erstwhile high-profile clientsresulted in many of his greatest successes. Here he provides detailed accounts of some of his most sensational coupsincluding his momentous decision, in 1981, to stake everything on bondsand some of his few but painful failures, such as his disastrous foray into global macro-trading in the mid-1990s.
At the same time, No Bull is the rags-to-riches story of a boy from Bensonhurst and his rise from the streets of Brooklyn to the heights of Wall Street. In a thoroughly engaging narrative, Steinhardt relates the early influences that shaped his attitudes toward life and success, as well as the beginning of his love affair with stock investing. Further, he chronicles his dawning awareness of the need for a purpose in life beyond the acquisition of wealth and how it led to his decision to retire and redirect his energies. We learn about his experiences as the chairman of the Democratic Leadership Council for nearly a decade, as well as his innovative thinking and ambitious projects to strengthen the Jewish community.
The inspiring true story of a Wall Street genius and world-class philanthropist, No Bull is an unforgettable read for finance professionals and students of human nature alike.