Review
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)
Book Description
No Bull offers an account of some of the investment strategies that drove Michael Steinhardt's 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 trend-a talent that was not always appreciated by several erstwhile high-profile clients-resulted in many of his greatest successes. Here he provides detailed accounts of some of his most sensational coups-including his momentous decision, in 1981, to stake everything on bonds-and his equally sensational 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.
Michael Steinhardt is one of the most successful money managers in the history of Wall Street. He is also widely known for his philanthropic activities, particularly in the Jewish community-most notably as cofounder with Charles Bronfman of birthright israel, a program whose mission is to provide a free educational opportunity for every young Jewish person of the Diaspora to visit Israel.
From the Inside Flap
No Bull offers an account of some of the investment strategies that drove Michael Steinhardt’s 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 trend–a talent that was not always appreciated by several erstwhile high-profile clients–resulted in many of his greatest successes. Here he provides detailed accounts of some of his most sensational coups–including his momentous decision, in 1981, to stake everything on bonds–and 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.
From the Back Cover
"No Bull . . . is a breath of fresh air in a traditionally windy genre."
—The Wall Sreet Journal
"Michael Steinhardt rode bull and bear markets to great success for himself and his investors. No Bull is a highly readable inside look into the man, his successes, and his motivations."
—George Soros, Chairman, Soros Fund Management, and Chairman,
The Soros Foundations Network
"Michael Steinhardt has written a fascinating history of his experiences in the tumultuous economic times of the last forty years. His reflections are endlessly interesting, totally candid, very instructive, moving, warm, and in many ways, inspirational."
—Laurence A. Tisch, Co-Chairman, Loews Corporation
"Michael Steinhardt has penned a joyous book about his rich (in every way) experiences on Wall Street, filled with angst . . . and reminiscent of a World of Our Fathers as only Steinhardt would know."
—James J. Cramer, Markets Commentator for TheStreet.com and CNBC
"No Bull is a memoir rich in language, in detail, and in self-awareness."
—Marty Peretz, Editor in Chief, The New Republic
About the Author
MICHAEL STEINHARDT is one of the most successful money managers in the history of Wall Street. He is also widely known for his philanthropic activities, particularly in the Jewish community—most notably as cofounder with Charles Bronfman of "birthright israel," a program whose mission is to provide a free educational opportunity for every young Jewish person of the Diaspora to visit Israel.
Excerpt. © Reprinted by permission. All rights reserved.
The Phone Call
For some time, during my early forties, I could not figure out why I often became depressed in the fall. Then I realized that this season was both the beginning and the end of a year for me. The school year started, and Rosh Hashanah, the Jewish New Year, followed, creating a feeling of hope, of new beginnings. But, before the Internal Revenue Service changed the rules for money managers and made the fiscal year coincide with the calendar year, my firm's fiscal year ended in September. Much of my life's focus has been on my performance as a hedge fund manager, and this focus took on a particular intensity as the close of the trading year approached. When my fiscal year ended each September 30, I felt a sense of closure and finality--the end of the play. Any good theatrical play has its beginning, middle, and end, or finale. My finale was September 30.
Fortunately, because I enjoyed success as a hedge fund manager throughout my career, September 30 was usually a good time. Congratulations, excitement, and joy filled the day. My investors, partners, and employees were happy. We often had superior performance--in some years, the best performance on Wall Street--and everyone usually made too much money.
But in October it all started again: the uncertainties, the insecurities, the worry about good performance. At the beginning of each new fiscal year, I had to start from scratch. What I, or any other money manager, had done in the past was soon "ancient history" because at the core of the competitive hedge fund world lurked a perennial question: "How much have you made for me this year?" or sometimes: "How much have you made for me this month? This week?" Each October, I felt a particular angst about having to start the performance all over again.
Traditionally, the window between the old and the new also provided an opportunity to take a short vacation. Things were no different in the fall of 1981.
After a brief visit to Israel, my wife Judy and I flew to the South of France, where we planned on staying at one of my favorite hotels, La Reserve de Beaulieu. The hotel appealed to me largely because of its cuisine. For me, dining is one of life's unmitigated pleasures. For days before arriving on the C"te d'Azure, I would fantasize about past meals: scampi Proven+ale with wonderful garlic aroma, the delicate foie gras, or the loupe de mer with fennel, which seemed to lift fish into an ethereal realm. This part of the world drew other people because of its scenic beauty (including the garb, or lack thereof, of the women), but the most exciting element for me was the menus. As Judy would remind me in her rare angry moments, I often had problems remembering details in more important areas of life, but when it came to menus, my facility for recall was outstanding.
We arrived in Beaulieu-sur-Mer late in the afternoon--happily, in time for the dinner hour. The flight had exhausted us so we decided to rest before our much anticipated culinary adventure. Just as we stretched out on the bed and began to enjoy the balmy October afternoon, the telephone rang. The hotel operator informed me that my assistant, Samantha, was calling from New York.
When I picked up the receiver, Sam, as I called her, told me she had received a call from an FBI agent. She gave me his number. He had told her to have me call him as soon as possible; she did not know why he was calling. It sounded urgent, so I said I would call him the minute we hung up. Before I got off the line, however, I asked to speak to one of my senior partners, John Levin. His first words to me, without even a hello, were: "Congratulations! The bonds have made a huge move. We're up 60 percent for the year." And the fiscal year had just started!
I knew the bond market had turned, but the magnitude of the move and its impact on our portfolio stunned me. Sitting on the side of the bed, I felt tremendous satisfaction in having been right, and having done so in an investment arena that was entirely new to me--the bond market. Since the age of 13, stocks had held a magical fascination for me. From amateur investor to professional, from analyst to trader to chief portfolio manager, my expertise had been in the stock market and my career had focused exclusively on stocks. The investment climate of the early 1980s, however, had created an extraordinary opportunity--better than any alternative, including stocks--in the bond market.
At the start of the 1980s, spiraling inflation, and the need to control it, plagued the U.S. economy. The federal government was running a huge deficit--enough to consume 2.5 percent of the nation's economic output. Long-term Treasury rates rose from about 10 percent in 1980 to almost 16 percent by September 1981. Short-term interest rates rose to 17 percent. Using "monetary policy"--mostly interest rate pressure--the chairman of the Federal Reserve, Paul Volcker, attempted to curb inflation but had had little success to date.
During the same period, Henry Kaufman, chief economist at Salomon Brothers (a man affectionately referred to as "Dr. Doom"), accentuated fixed-income fears with his dire predictions of record-high interest rates and runaway inflation. Most other economists on Wall Street were equally bearish on bonds--they referred to them as "certificates of confiscation"--and felt that inflation would continue to increase on both cyclical and secular bases. Oil prices were high and were predicted to continue rising.
I viewed things differently.
So, in the late spring, in the face of rapidly rising interest rates, I had begun a foray into the bond market. I started buying bonds on the premise that the economy would weaken faster than expected… --This text refers to an out of print or unavailable edition of this title.
