Alan C. Greenberg

The third annual Charles F. Dolan Lecture packed the Kelley Theatre on Oct. 29 as PBS's Charlie Rose moderated a conversation with Alan C. "Ace" Greenberg, chairman of the executive committee of The Bear Stearns Companies.

The program, which will be shown on Rose's show at a later date, opened as Rose introduced Greenberg and his more than 50-year affiliation with one of America's leading investment banking and securities trading firms.

Greenberg began by explaining his nickname, "Ace". When he was a student the University of Missouri, he said, a friend suggested he change his name to "Ace Gainsborough" to attract women.

"I dropped the Gainsborough, but the 'Ace' followed me to New York," Greenberg told the audience.

When asked by Rose what drove him to seek out a Wall Street career, Greenberg admitted a football injury had led to his reading about finance. That, coupled with his enjoyment of card playing and betting, made a financial career a logical choice.

"Bookmaking was illegal at the time, so I didn't have many options. So I chose Wall Street," Greenberg said.

Greenberg began at Bear Stearns as a risk arbitrage clerk in 1949 at a salary of $32.50 a week and gradually worked his way up to trader.

He also spoke about his father, a businessman, who taught him a number of valuable lessons that he later applied to his trading career.

One piece of advice was "if you have some merchandise that doesn't look good today, sell it because tomorrow it's only going to look worse," Greenberg said. "That certainly applied to Wall Street."

His father also taught him that personnel made the difference between a good operation and a bad one.

Greenberg made the crowd laugh when he called the popular investment strategy of dollar averaging the "dumbest thing he ever heard of."

"All that does for you is you buy more stock as the price goes down and when the company files for Chapter 11, you're its biggest stock holder," he said.

When asked how he knows when to sell a stock, Greenberg replied it's when he's losing money. "I don't wait to hear any excuses or what management has to say. That's like asking a man what his daughter looks like."

When Rose asked what his biggest mistake in business was, Greenberg admitted that he was sad to see Kohlberg, Kravis, and Roberts leave the firm. "Think about it, all an investment firm has to offer is people," he said. "We don't manufacture anything or own any patents."

When asked to summarize his overall investment philosophy Greenberg said he generally wasn't interested in companies that were going to make money five years down the road because some kids might invent something that would make those companies obsolete. At the same time he preferred companies that had excellent earnings over a long period of time.

As for the corporate scandals of WorldCom, Tyco, and Enron, he said they were no worse than the politicians and judges who are being sent to jail regularly. "There are bad people in every business," he said. "In 20 years there will still be prisons and there will still be people sent there."

When asked about retirement and what advice he would give to graduating students just beginning their careers, the 76-year-old Greenberg responded: "I'll continue to work as long as I enjoy it. And that's the best advice I can give any young person starting out. Love what you do and you'll be good at it."

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