Weekend January 18, 2014
The Players, The Instructors
Ross, as you may have noticed during his ill fated Presidential campaigns, loved the spotlight. And so he announced in televised interview that 'we would see which was better, the Merrill Lynch personnel department or Ross Perot.' Ross never lacked for hubris or self confidence.
Ross had each and every potential recruit screened at the local office level and then flown to his EDS Dallas, TX headquarters. This was no small undertaking .At the time duPont was a large national wire house. duPont Glore Forgan had about 90 national offices. But clearly the office managers did not grasp Ross's concept of business dress. Some of the early recruits showed up with then fashionable longer hair and sport coats. Ross dismissed this as a bunch wearing motorcycle jackets or dressed like peacocks, referring to the color of their shirts and ties. No sir, from then on it was dark suits, short hair, wingtip shoes, the standard IBM business wardrobe.
I actually was not interviewed by Ross but by one of his lieutenants who was a fairly nice fellow. I had a stellar record at UT Austin winning both awards given by the Finance Department at graduation, the Finance Faculty Award and the Wall Street Journal Award. And that is how I passed muster at the interview I suspect. I mention this as a fact.
The initial group gathered in New York but were moved to Los Angeles as I related in the last Oct 26 post. I drove from Houston and with the help of the Gulf Oil road map arrived right at our apartment off Wilshire Blvd.
A plurality of the group had been in the military. Ross liked military personnel. While he eschewed their devotion to duty and courage. If you can handle Viet Nam, how hard can it be to sell stocks, he queried. As it turned out pretty hard, we lost both wars, Viet Nam and Wall Street.
One large fellow had been a Marine with combat in Viet Nam. Two of the group had been Navy Carrier Pilots one had ejected over water and was rescued. Another had served his enlisted Navy duty aboard the Presidential Yacht. Others had been regular Army with Viet Nam experience. The class was designed to emulate Officer Training School.
The civilian contingent was from all over, literally. One had been a hotel manager. Another had been a bar tender. Others had various backgrounds but few to no one had a specific sales background. This would turn out to be a horrible error. Selling stocks is after all, a sales job.
Half the day was spent on selling techniques, the other half on learning about products or studying for the Series 7 exam. We began with about 42 individuals, all male, a all white. There was one female in another class. We were numbered as to when we began, my group was 72-2 signifying the second group in 1972 actually starting in October.
We had an intial assignment of an introductory speech. My extensive high school debate successful expereince resulted in my being regarded as one of the better speakers in the class. I had followed that with two speech classes in college.
We were required to join the excellent organiztion Toastmaster and attended a meeting once a week.That was a great idea.
We were also required to read Carnegie's How to Win Friends and Influence People. This is the original self help book. I will be referring to it in my ethics class this spring. The room where we met was also equipped with a video camera, a rarity in that day and time. The rumor got around the offices that Ross could monitor the activies by video any time he wanted from Dallas but this was not true.
Another requirement was role playing. One student would be the broker the other would play the client. One day I was playing the role of client. The 'broker' student had ben well liked, his Dad had some money and a place in NYC when some of the group had been there. I took the task seriously, quickly assuming my most aggressive debate tactics shooting back hard questions during the give and take. I suppose I did the job too well.
As in OCS, everyone did not complete.That broker was gone the next day for his poor performance. of the 42 that began the program a mere 25 finished.
The married students lived on one floor of the apartment while the singles roomed two to an apartment on another floor. We visited one another and explored all LA had to offer on the weekend. Marina del Ray was then and is now a huge assemblage of apartments literally on a bay where many boats were located. The nightlife of the bars was literally California Dreamin' unlike anything those of us from the suburbs had experienced.
That Christmas several of us undertook a trip to San Francisco and then over to Lake Tahoe known then and now as Heavenly Valley. One of the group had temporarily dropped out of college years back and worked there. Two of his group still did, as parking lot attendants, great tips and they did not care for the cooped up atmosphere of the casino.
we made the famous spots of Top of the Mark (Hopkins hotel), famous restaurants, and other watering spots. Driving up Highway One is truly a bucket list experience. As my room mate remarked it was like being in s a nano second of geologic time, judging by the boulders and faults plain to see.
Harrah's had some female blackjack dealers. I still recall one of them relating a phone call from her mother to another female dealer. She noted her mohter had asked, is that all you are going to do with your life? Apparently daughter as blackjack dealer was not the story Mom wanted at the weekly Bible Study meeting, back then women actually had such gatherings!
I stayed the entire time, never returning until the class ended in April. By then we were restless but had passed both the Series 7 and commodity exams. While one would think we knew everything, there was not nearly enough detail to the class. For example, we were trained on how to sell mutual funds. But the first task I had on my first week in Houston was how to redeem money from a mutual fund .Gee no one had discussed that. Back then one had to write a withdrawal letter, with a signature guarantee by a commercial bank officer. The letter was then mailed to the mtual fund. Sounds old fashioned but that is the way it was.
We received a lot of exhortation to sell municipal bonds by a fellow named Ernie Bell. That was a great idea with marginal tax rates at 70% in the highest brackets. The concept of a municpal bond fund had not come around yet. And there was no explanation of how actual physical bonds were priced or marked up or how the interest had to be purchased between pay dates. As a result we had nto a clue as to the actually mechanical selling process.
By the way, San Simeon, the fabulous Hearst Castle, lies along HIghway One. Then and now it is a state attraction. My room mate and I were so impressed we went twice so as to take all threee tours. I recommend it highly. Last year I read The Chief the definitive bio of Hearst. This is one of those better than fiction larger than life stories.
My take on our 'training' as that it lacked specifics, there were few to no students with actual sales back grounds, and finally we were totally divorced from the local office that hired us. The thinking was that the local office was bedeviled with all the usual tricks of the trade, churning accounts and failing the customer. But that is where we were headed. And so after six months of orienation, we had to start all over again with strangers we did not know back in Atlanta, Houston, or wherever. Worse they did not know us or the training program. And so, much of the good intentions of the program went up in smoke on our arrival at our offices. In retrospect, it would have been beneficial if the managers of the offices we were destined to work in, had been flow to LA to see what the program was all about. As always, if employees do not take ownership of an idea, they are not likely to adopt it.
In coming weeks topics include
the Instructors
the Clubby atmosphere of Wall Street in that day, the fire wall of fixed commissions
Wire Houses versus investment banks
Keeping the cards close to the chest, a lock on quotations, limited news, the pink sheets
Ross comes to Visit
Los Angeles in 1973
Officer Candidate School goes Private, the class size dwindles
Meet Walter Auch or as Ed DeStefano described him, Wally Ouch
the Well to Do Rats desert the Ship, Ross gets a stay from the SEC
Ross grabs Walston
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