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Jared Dillian
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In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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January 1, 2001

Lessons to Bank On: Ezra Zilka on Adapting, Investing in Times of Turmoil

By Kathryn M. Welling

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  • Lessons to Bank On: Ezra Zilka on Adapting, Investing in Times of Turmoil

Financier Ezra Zilkha likes to joke that during his lifetime he has moved from the Persian carpet culture to the Louis Quinze culture, but his humor is a remarkably apt description of his life's journey. Starting as a scion of a Babylonian Jewish banking family, he put together multifaceted careers in international banking, investments and corporate governance that spanned every continent, but the two smallest, over the troubled latter half of the 20th Century. In the process (though congenitally loathe to be so gauche as to flaunt it) vastly enhancing his family's fortunes.

His wealth, like the man, is strictly private. But Zilkha, president of Zilkha & Sons in New York, graciously sat down recently to share his insights into the wisdom of improvising and temporizing in times of turmoil.

Hong Kong and Shanghai must have come as real culture shocks to you in 1948. You were what, 23? An Iraqi Jew, by way of Beruit, Cairo, New York and Wesleyan University in Middletown, Conn., sent there to do no less than re-establish your father's gold trade after the war.

Yes, but I adapted. I think one of the reasons is that I talked a lot with my father and I learned a lot from him. When you are young, you learn.

If you're observant. But what, specifically, did you learn?

Well, that the Chinese are really much smarter than any of us. All the Chinese bankers in Hong Kong would always make a little bit of money, no matter what they were doing, by taking a little something for themselves. If they got a silver coin, they'd use some pincers to shave off just a bit of it. They'd put the shavings into a cup, where they'd accumulate, and eventually, those shavings would amount to real money.

You say you learned a lot from your father, too. The family history you wrote, "From Baghdad to Boardrooms," recounts that he had little formal education, yet it is filled with stories showing that he was not just a successful banker but also a very savvy judge of human nature. Like the one about the camel driver...

In his early years in business, my father naturally wanted to insure' the gold that he shipped around the Middle East by camel caravan - but insurance policies were unheard of, back then. So since there was always the possibility that the caravan leader might be a thief, father would tell him, "When you come back, I have double this shipment to give you." The caravan man, even if inclined to steal, would wait for the next trip, when he could steal twice as much. It was very risky, but the price of this insurance' was right! Another thing my father taught me, for instance, was never to go overboard in a negotiation; that you should never totally win. There should always be a way for somebody to get out, while saving face.

A lesson that no one seems to remember in politics - or in the Mideast today.