by Jim Paul
I went home that night and said to Pat (we were married by then), “This is it! Everybody has been giving me this B.S. all my life that I don’t do what I ought to do and I don’t work to potential. All right, I tell you what I’m gonna do. I’m gonna be the damn Honor Graduate. I’m gonna be that man. I’m gonna do it. I’m gonna do whatever it takes to be that guy.” At the end of the course I was the Honor Graduate. I couldn’t believe it! I had done it and it wasn’t even that hard! All I did was figure out what the rules of the game were and then followed them. Naturally, I had accepted the Army’s offer to be an instructor at Aberdeen. It was great! I became well known within the ranks as being a very good instructor. I was good at it. It’s very easy to be an instructor when you say the same thing every week, and they change the people you’re saying it to. There’s a lot of stuff I can’t do, like math and statistics. But when He was passing out talents, He said, “And this one gets the gift of gab.”
I was the first Lieutenant at Aberdeen to become a Master Instructor. It was just another game to me. You had to do a bunch of B.S., and I did it. It wasn’t hard. Every other Master Instructor had been at least a Captain and most were Majors or Lieutenant Colonels. I was only a 2nd Lieutenant; the lowest ranking officer there is.
The Master Instructor title, OCS training and the MOS Honor Graduate were the same deal: “It’s a game. They wrote these rules; I understand these rules. I can follow these rules and win the game. It’s no big deal. It isn’t hard.” Some of it was aggravating but I didn’t take it personally. There was nothing personal about it. They didn’t know I existed when they wrote the rules, so it was totally impersonal. You can either play the system or you can let the system play you. Pick one. I like playing the system because it’s more fun and you win more. If you let the system play you, you can get very frustrated and very beat up.
After thirteen months at Aberdeen, I received orders sending me to South Korea. My record was starting to build. I’d just gotten the medal for the job I did as an instructor and the Master Instructor honor. The Army is very big on that stuff, so I got promoted to 1st Lieutenant. They made me the Adjutant, the guy in charge of personnel, for a battalion. I was the S-1 of the battalion at Camp Humphries, Korea. It was all paper work. I had to sign everything. I hated paper work but I did it. I also did the rest of my job with a little more flair than my predecessors. I came up with ideas and new ways of doing things. I become noticed. I was not very good at being invisible.
One day I got a call from the XO (the number two man) of the brigade, the unit above the battalion. He wanted to meet me for lunch. I cleared it with my boss (the military is very big on chain of command stuff) and met him for lunch. He offered me the job of S-3, which was the Operations Officer of the brigade. Now understand that this was the equivalent of number three man in the brigade. The organizational chart is: the brigade commander, then the brigade XO, then the S-3. I was about five steps away from that S-3 position as the Adjutant of the battalion, so this guy wanted to multi-promote me five steps. The S-3 was usually a Lieutenant Colonel and I was only a 1st Lieutenant! Realistically, I should have to go through Captain, then Major, then Lieutenant Colonel before I’d even be considered for this job. I became S-3 of the brigade at the ripe old age of 23. I had about as much business being an S-3 as I did being a goalie on the Hartford Whalers. I didn’t have any idea what I was doing. I was in way over my head; six-foot-three in ten feet of water.
One of the missions of this brigade was 8th Army nuclear weapons storage. I had a side arm — Top Secret this, Top Secret that. “Aye yi yi. I’m 23 years old! What am I doing? Are these people nuts? I don’t need this responsibility. Jesus Christ! This is scary. My only claim to fame is that I was a Master Instructor back in Aberdeen, and that was easy. Two years ago I was burning hotel deck chairs for a bonfire on a beach in Daytona, Florida, and now I’m sitting on World War Ill! I’m nervous about this!” Someone else should have been doing this nuclear weapons thing.
Since Vietnam was heating up so much during the 1960s, Korea was kind of in the background — until the Pueblo incident. In 1968 the North Koreans captured the intelligence ship U.S.S. Pueblo in international waters. The world would have been real scared if it had known that I had the position I had during the Pueblo affair.
My experience in the military reinforced my view that it really was money that was important in life, not what you did to make it. In the military it’s the other way around. Your job is more important than money. Sure, I was S-3 as a 1st Lieutenant instead of a Lieutenant Colonel, but I wasn’t getting a Lieutenant Colonel’s pay. I was only too happy to return to the real world again where money was what counted.
My mother had gotten me into Xavier University in Cincinnati on probation as a student in their MBA program. I was on probation because I only had a 2.2 grade-point-average coming out of undergraduate school. Pat and I moved to Cincinnati and got an apartment. She started teaching and I started school.
Because of my experiences in the Army and especially because of what I had proved to myself by being the Honor Graduate, I wanted to do well in school this time around. I decided As were better than Cs. Fortunately, most of the classes I was taking were easy for me: marketing and economics, and no statistics or math. I don’t like math. I can do arithmetic as well as anybody, but arithmetic and math aren’t the same thing. I don’t like formulas. If you put an x and a y on a page I go, “I don’t care! Hire somebody to do that.”
I cruised through the first semester classes. Most of the other people in the program were General Electric engineers coming back to school to get their MBAs. There was a big GE plant outside Cincinnati in Evandale, and these guys were all either chemical or electrical engineers. They all carried slide rules on their belts (this was during the dark ages before hand-held calculators), but most couldn’t spell marketing or economics.
Then we had to take a course called Quantitative Business Methods. It was a math course. The first day of class, this geek math teacher (who was a total math teacher: dull, dry and two slide rules on his belt) started out by saying, “To pass this class you will need a working knowledge of calculus.” Oops! I hadn’t taken calculus. I wasn’t going to take calculus. I couldn’t spell calculus. But I had to have this course to graduate. I sat through the first few classes, but I didn’t understand any of it. All these geeks I’d been laughing at in all these other courses were doing fine. They understood everything he was talking about. They had their little slide rules out arguing over the third place decimal to the answer, and I couldn’t even get the right handle. I studied for two days for the first test and still only made a 38; the lowest grade in the class — by a lot.
So I called a buddy of mine I had gone to high school with who majored in math at Notre Dame. “Ralph, I need a tutor. I mean, I’m in deep, deep shit here. I’ll pay you. I’ve got to pass this course. I don’t know what I’m doing. I need somebody who can talk to me and make sense out of this stuff.” He agreed to help me. The game was: I didn’t care if I knew any of it. He just had to get me to where I could pass this course. I studied my tail off. I still didn’t know any of it, but I did pull a C in the course.
The point was: I was laughing at all those guys in all the other classes because they couldn’t carry my jock strap in economics and marketing, and all of a sudden I couldn’t carry their jock straps in math. That taught me that there are people for places, places for people. You can do some things and you can’t do other things. Don’t get all upset about the things you can’t do. If you can’t do something, pay someone else who can and don’t worry about it.
The Brain Watchers and the Butterfly
Since my grand plan was to “go into business” and “make a lot of money,” becoming a stockbroker seemed like the perfect job. It’s really just a well respected sales job, but if you’re good at it the pay is super. I decided to get acquainted with some prospective employers for when I finished the MBA. I went down to “the st
reet” in Cincinnati, and I started going to all the brokerage offices: Bache, DuPont, Hornblower — some of the names don’t even exist anymore. I was looking for a part time job that would accommodate my school schedule. The deal I wanted was this: “I can work part time 10 a.m. to 3 p.m. I don’t care what I do. I don’t care what I get paid; if I get paid. But when I finish graduate school, I want to go into your training program and become a registered broker.” At most of the big firms I was a round peg in their square hole; they wanted full time or nothing. One major wire house was the exception.
I walked into this office on just the right day in 1968. One of the biggest brokers in the office was primarily a commodities broker, and I happened to walk in the day after his assistant had quit. This broker was producing $300,000 to $500,000 a year in gross commissions — in commodities — in 1968! He was a big hitter.
The office manager’s secretary said, “You’ll have to talk to the office manager, Mr. Fitzgerald.” I went in to talk to Larry Fitzgerald and he said, “What do you know about commodities?” I didn’t know anything, but I remembered a few of the buzz words from the meeting I had with Jack Salmon and Dr. Christian in college. I said, “I’ve always been interested in futures. I’m particularly interested in the soybeans . . . and meal . . . and oil. Trying to figure out how the weather is going to affect the crop.” I used the buzz words I had heard Salmon use. Fitzgerald said, “Okay, you’re hired — if Cohan wants you. Go out and meet Ed Cohan.” Cohan was the big commodities broker. Fitzgerald introduced me to him and after a very short interview Cohan said, “Okay, you’re hired.”
On my way out of the office, Fitzgerald’s secretary told me to come back the next day to fill out an application and take a test. “Test? What kind of test?” I asked. She said it was called the Minnesota Study of Values Test. Without knowing it, she had just let me know that there was a game to be played. This time the game was a test. I didn’t know anything about this test, but I planned to find out about it.
I went straight to a bookstore and found a book titled The Brain Watchers that had three chapters on the Minnesota Study of Values Test. I bought the book and read it that night so I’d be ready for the test the next day. The questions on the MSV Test have five multiple choice answers that you rank in their order of importance to you. The five categories of answers are Money, Politics, Aesthetics, Religion and Social Significance. For example, one question I remember was: “When you look at Leonardo Da Vinci’s painting The Last Supper, what do you feel? Rank the following in their order of importance, 1 being the most important and 5 being the least important.
The social implications of the event,
The beauty of the painting,
The value of the painting,
The political impact of the painting,
The religious ramifications of the painting.
Depending on what kind of job you are applying for, there is a right way and a wrong way to rank the answers. If you want to be a broker, the ranking for the question above is as follows: the highest ranking is the money answer, followed by the politics answer, social significance, aesthetics and finally the religion answer. If you want to go to work as a parish priest, every right first answer is the religion answer, then social and so on, and the money answer is always last. Once you know that’s how their game is played, the test isn’t hard. It’s very simple. You can see very quickly which one of the five choices represents each of the categories; then you just rank them the way you believe the employer wants them ranked.
So the next day, I took the test and gave them 1,2,3,4,5 money, politics, social significance, aesthetics, religion on every question. I didn’t even miss one on purpose to make it look good. That was a small mistake. I should have reversed 1 and 2 a couple of times but I didn’t. My test was perfect — absolutely no wrong answers. Now when they grade this test, it comes out on a scattergram chart. If you’re meant to be a broker, your scatter gram looks something like a butterfly. Well, mine came out a perfect butterfly. Fitzgerald didn’t care, he was going to hire me unless I really blew the test. But he did say, “You really did well on that test. I haven’t seen anybody do that well before.” I told him I had studied a little bit before I took the test. “You’re not really able to study for that test.” “Well, you are, and you aren’t,” I said. The next day I started working as Cohan’s assistant.
It was 1968 and the stock market was booming. It was going straight up and everything was wonderful. Everyone in the office was making money. Then suddenly it stopped going up, and it started going down. When that happened, the only guy in the office making money was Ed Cohan. He was still doing business and everyone else was looking at their phones. I said to myself, “Self, I think I’m going into futures. I like the idea that I’m not at the mercy of the market only going up; I like the idea of being able to make money when the market goes down, too.” I don’t care how good a stockbroker you are, if the market is going down you’re in trouble. You’ve got to take a defensive posture and you’re not going to do as much business.
I finished the MBA program in September 1969 and, as part of the deal I made with the brokerage firm, I was off to the three-month broker training program in New York. I went to the Big Apple a month before the program started and spent that time in the futures division rubbing elbows with all the biggies. I wanted to know how they did what they did and why; what worked and what didn’t work. I was on a fast track because I’d been working for Ed Cohan for a year, so everyone in the futures division in New York knew who I was. I was the one with the perfect butterfly chart.
Once again, I got the impression I was better than the others. I was “more equal” than the other trainees because I knew most of the people in the futures division, and I worked for Cohan. Once we got into the actual training program, I ended up teaching part of the commodity portion of the program. The regular instructors were from New York, and they sort of knew what to say as far as the tests were concerned. But they didn’t really know futures, because the big futures exchanges were in Chicago. They quickly figured out that I did know what was going on, and they made me an assistant instructor. When they had questions on commodities, they would come to me. If I didn’t know the answer, I knew I could get the answer from Cohan. Once again, I had the Midas touch and a hook.
Someone on the staff told somebody back in the futures division that I’d been a very big help teaching the class, and I got a call from Tom O’Hare, the firm’s tax-straddle expert. He did huge production; $2 million or $3 million a year, all on referrals from stockbrokers. A broker would call and say, “I’ve got a client who’s made $2.5 million this year. Can you do a tax-trick?” Tom would say, “Yeah. How big a trick do you want? How much of that is he willing to risk to try to do it?” Tom O’Hare was a master at it.
Well, Tom called me and wanted to see me in his office. When I got there, we exchanged pleasantries and then he pulled out my file. He said, “I really wanted to meet the prima donna who actually had the gall to paint a perfect butterfly.”
‘‘I’m sorry sir? I don’t know what you’re talking about.”
“Yes, you do! Nobody could do a perfect butterfly unless he knew exactly what I’m talking about.”
“Well, I read a book —”
“That book wouldn’t be The Brain Watchers would it?”
“Well, let me see, as I recall . . . yes, I think that was the name of the book . . . and it helped me a lot on the test.”
He said, “Okay. How close do you think you would really have come to the butterfly if you hadn’t read the book?”
“To be honest, pretty close. If I hadn’t known the game, I still wouldn’t have been far off.” (I wanted to be part of the country club set, remember? I already believed money was important.)
“Okay. This is what I do.”
Then O’Hare proceeded to tell me about tax straddles. The entire firm sent him referrals who were willing to risk some capital to reduce the
ir tax liability legally. O’Hare needed an assistant. “I’m authorized to hire an assistant. I want someone who can learn what I do, understand what I do and help me do what I do. That way we can do a lot more business. I’ve looked at your test — we both know that’s B.S., but I give you credit for having done it. I’ve talked to your boss, Ed Cohan. He thinks you’re a bright young man. I want you to come to work for me. I’ll pay you $23,000 a year.”
My alternative was to go back to Cincinnati as a broker under Cohan, basically as his assistant. But that wouldn’t be bad. He was 52 years old and he had a client book that was massive. He wasn’t going to be there forever, so whoever went to work for him was going to inherit the book and make a lot of money. Back in Cincinnati I was probably going to make $15,000 to $18,000 plus whatever I could produce by getting my own customers. (At that time a $100,000 producer would have netted about $25,000 — big money in 1968.) And this guy was offering me $23,000.
I said, “Mr. O’Hare, I’m extremely flattered that you called me in to see you. I think working with you would be absolutely super. But as flattered as I am, I don’t think I can take the job.”
Well, immediately it became obvious that this was not the kind of guy who was told “No” very often — particularly by some 24 year-old who didn’t know where the washroom was.
“What do you mean, you can’t take the job?”
“Well, it’s that number. I really don’t want to live in New York and neither does my wife. I could do it. I could open a travel agency in Kabul, Afghanistan if the numbers were right. I have a new bride who’s pregnant with our first child, and she doesn’t want to move to New York. We could deal with it. But there would have to be some compensation for dealing with it and, quite frankly, $23,000 doesn’t do it.”
