Business

Excerpt From Master Class For Investors By Martin Sosnoff

Excerpt From Master Class For Investors By Martin Sosnoff, by Gene Taft

Introduction

Tomorrow Ain’t Another Day

September 11, 2001

You get your ass out of that meeting! Now!” My wife Toni’s voice came in hysterical but muffled on my Nextel cellphone.

“I can’t leave this second,” I said. “We are deep into this finance committee meeting. It could take NYU into the ranks of the big three ‘B’ schools. Harvard, Wharton, whatever.”

“Rome is burning, you idiot! Haven’t you heard? Two jet planes plowed into the World Trade Center’s twin towers. They’re burning out of control, imploding.”

“I’ll leave in fifteen minutes.”

“Now! Now! Get out of that building if you love me. Head uptown on foot. I’ll be waiting on the plaza at 101 Park.”

“I’m only on the eleventh floor.”?“Have you tried jumping from the eleventh story?”?“It’s not an option. I’m snapping shut my rucksack and leaving.”

Six of us, with Stern School of Business dean George Daly, had figured out $43 million would do the trick. Raise faculty salaries competitive with Harvard, force early retirement and renovate several existing halls. The job was convincing the university’s board of trustees to approve our retention of annual surpluses from tuition and fees, some $8 million per annum. Business schools, unlike liberal arts colleges, make money. When I asked a Chinese girl why so many Asians in New York wanted an MBA, I got a snappy answer. “Why not?

The dean called our attention to black smoke belching and billowing irrepressibly from the upper facade of a WTC tower. “Do we want to go up on the roof and watch?” an assistant dean asked. This was said in a matter-of-fact voice for which the dean would apologize the next day in a phone conversation when the depth of the calamity had sunk in.

I walked uptown on University Place, pivoting backwards every 20 or 30 steps to gaze at the wounded tower. Office workers streamed out of buildings on both sides of lower Park Avenue, walking north briskly, hushed, but without panic. The stray cars in the street idled patiently, waiting for the waves of pedestrians to part. They waited a long time.

The market, of course, would close. Hong Kong, Tokyo and the bourses of Europe would sell off the next day, probably 5 percent, I mused. How many more panics would I endure? Never sell into panics. My only question is whether I buy aggressively on day two or just hang in. The Cuban missile crisis, Jack Kennedy’s face-off with Roger Blough over steel price increases, Black Monday—you had to buy them all. It was like shoving in your table stakes and waiting for the fifth card to turn over.

Was this different? Had I made too much money in the trenches over 50 years? What more did I have to prove? The first beard on The Street in ’64 was mine. When I read about the symposium on the Cuban missile crisis at Princeton University in the nineties, it surfaced that our country had been within a hair’s breadth of a nuclear holocaust. The Cubans itched to launch the Russian intermediate-range missiles at our coastal cities. The Russians said nyet. Instead of putting all my money into IBM and Xerox that afternoon in 1962, I should have booked a plane for Toronto. Sometimes you get lucky—with shit for brains.

As I plodded methodically up Park Avenue, I remembered where I was on Pearl Harbor Day: shooting baskets in the schoolyard of P.S. 90, East Bronx. It was cold and windy. My fingers stiffened and I came up short on successive set shots. I ditched the three-man pickup game and headed home.

War for a 10-year-old was something you read about in your history textbook. The D-day Parade that flowed south down the Grand Concourse from Fordham Road to Cardinal Hayes High School was for me a straight business day, not a commemoration. I sold cat balloons, a quarter apiece, stretching the rubber and then inflating the balloon with a portable pump slung on my shoulder like a burp gun. Middle-aged veterans of World War I worked the crowd, too, aggressively pinning cloth poppies on the lapels of eligible males who had to cough up a buck, sometimes less. I pushed whiskered cat balloons on sticks into the hands of the kindergarten crowd. Selling out a gross of balloons made me 25 bucks, a small fortune in the early forties.

I never forgot this lesson. When the circus is in town, you hustle and sell pea- nuts. When there’s speculation in the air, you buy, buy, buy and save the research for later. I terminate analysts and money managers who lose their nerve. If you have six positives to buy a stock matched by six negatives and it’s too hard to make a decision, go teach Security Analysis 101 somewhere. Make yourself into a many-handed economist, but get out of my office. The prime reason to do security analysis is to forge courage to buy stocks after they’ve disconnected from reality on the downside.

After 45 minutes on foot, I met Toni on the plaza of 101 Park Avenue. “You are in denial,” she said. “The towers have collapsed. The Pentagon is on fire; maybe the Sears Tower in Chicago is hit. God knows what’s next. The least you could have done was think of me. The cellphones don’t work. I can’t reach the kids. Let’s head for Central Park. I’ll feel safer.”

I hugged Toni sheepishly, apologizing for my indefensible reaction. I trace back my cold-blooded attitude towards public spectacles to my balloon days on the Grand Concourse. When the locals panic, you start buying. Whoever said money managers aren’t snakes, ever ready to strike at a poor mouse trembling and frozen in its predator’s hungry, beady eyes?

“The above excerpt is from MASTER CLASS FOR INVESTORS by Martin Sosnoff. Published by Atalanta Press © 2015.  Reprinted by permission of the author.”

MASTER CLASS FOR INVESTORS is available for sale at Amazon.com

Master Class For Investors

Master Class For Investors By Martin Sosnoff