If there were Olympic gold medals handed out for longevity, tenacity, and generosity on Wall Street, Alan Ace' Greenberg would have a roomful.
At 73, Greenberg, the colorful chairman of Bear, Stearns & Co., still works the trading floor. He is easy to spot. Greenberg is the husky, bald-headed guy with his shirtsleeves rolled up, smoking a Macanudo cigar, barking out orders like a five-star general.
Greenberg, who often speaks in a monosyllabic conversational style, said trading is like a game. "I do it for the same reason I play golf or bridge. I enjoy it," he said. "Even when the markets are down." (On the day this reporter visited Bear Stearns the Dow Jones Industrial Average was off 184 points.)
Prize View
Like many top Wall Street movers and shakers, Greenberg has a plush, executive suite with a fantastic view. But he hardly ever uses it. "I find being in an office very isolating," he said. "I like hearing people talk and waving to people as they go by." The veteran trader shouts out across the floor to a fellow trader, "Anything going on?"
Greenberg takes great pride in how easy it is to get in touch with the chairman of one of Wall Street's premier firms. "People do not have to call my secretary for an appointment," he said as he swiftly fielded one of the many incoming phone calls. Greenberg calls out to his executive assistant, Laura Schreiner, "Do they ever call you for an appointment?" She instantly fires back, "Never."
Born in Wichita, Kansas and raised in Oklahoma City, the son of the owner of a women's clothing store chain, Greenberg once dreamed of dashing across a football field rather than commanding a large trading and investment banking firm.
Upon graduating from high school in 1945, he attended the University of Oklahoma on a football scholarship. But while playing as a halfback in a game during his freshman year, Greenberg suffered a back injury. That put an end to his football career. A year later, in 1946, Greenberg transferred to the University of Missouri, where he received a bachelor's degree in business.
He gained the name Ace' during his college days. Greenberg confided to his good friend and then roommate, Alvin H. Einbender, who later became a chief operating officer at Bear Stearns, that he was having difficulty in getting dates. Einbender suggested that Greenberg change his name to Ace' Gainsboro. The nickname, Ace, stuck but Gainsboro was quickly scrapped.
Oklahoma Departure
Upon graduation in 1949, Greenberg moved from Oklahoma City to New York to start out his career on Wall Street. "I was a little too close to home," Greenberg recalled. "I wanted to go farther away. I wanted to become a success."
The 21-year-old, transplanted Mid-westerner landed a job as a clerk at Bear Stearns in the firm's oil and gas department. His salary was $32.50 a week. Four years later, at the age of 25, Greenberg was running the firm's arbitrage desk. In 1978, he was named chief executive.
He credits his rapid rise to more experienced traders who took him under their wing. "I worked for some people that were willing to give me plenty of leeway," Greenberg said. "They didn't always agree on what I should make, but they came around. They didn't exactly throw the money at me."
Life has not been all wine and roses for Ace. At 31, he was struck with colon cancer. Back then there was no chemotherapy or the kind of life-saving treatments that are available today. Greenberg had only a 25 percent chance for survival. He underwent surgery and beat the incredible odds. "I was lucky," he reflected. "I am still here."
While many top-tier, investment banking firms only hire freshly-minted MBAs from mostly Ivy League schools, Ace is more interested in a candidate's drive, ambition, and street smarts.
In one of his famed interoffice memos, which was collected in the book, "Memos From The Chairman" (Crown, 1996), he wrote, "If somebody applies for a job with an MBA degree, we will certainly not hold it against them. But we are really looking for people with PSD degrees. PSD stands for poor, smart, and a deep desire to become rich."
Fat Reward
As a top executive at one of the Street's most successful firms, Greenberg is handsomely rewarded each year with a bonus check that's in the many millions. He also gives away millions. In 1992, he sold off a large portion of his Bear Stearns stock for $7.8 million and donated most of it to charities.
Greenberg has been honored by a slew of organizations for his charitable efforts, including the NAACP, the Israel Bond Organization in New York, the Jewish Foundation for the Righteous, and the Federation of Jewish Philanthropies. He is a shining example for Bear Stearns' senior managing directors who are required to give four percent of their salaries to charitable causes.
"In almost every case they [the managing directors] give more than four percent," Greenberg said. "They get involved in local hospitals, libraries and schools. It's certainly worked out for the charities and the people at Bear Stearns."
Greenberg abhors waste as much as he is committed to giving money away to worthy causes. He is known for keeping close tabs on every penny that is spent at Bear Stearns. Greenberg once instructed employees to save paper clips rather than buy new ones.
In one of his legendary, cost-saving memos, he wrote, "I have just informed the purchasing department that they should no longer purchase paper clips. All of us receive documents every day with paper clips on them. If we save these paper clips, we will not only have enough for our own use, but we will also, in a short time, be awash in the little critters."
Over the past 50 years, Greenberg has witnessed a remarkable number of changes on the Street – from consolidation and computerization to the advent of Nasdaq and ECNs. Despite these sweeping transformations, he feels that the nuts and bolts of trading still remain the same.
"Trading is a profession with virtually no shades of gray," Greenberg wrote in the forward to Abe Rubenfeld's "The Super Traders" (Probus, 1992). "At the end of each day, your performance is there in black and white for everyone to see. Did you hold that position a day, an hour, or even a minute too long, irrationally hoping that the price might miraculously turn in your favor? Did you act on some impulsive thought or unsubstantiated rumor, only to see it blow up in your face? If so, there's no hiding the results or shifting the blame; it's all there, counted to the penny. Make no mistake about it – trading is a ruthless profession."
In recent years there has been much hoopla about 24 hour, global trading. Greenberg thinks the prospects for around-the-clock buying and selling is more sizzle than steak. "It hasn't worked so far," he said. "Keep in mind that Twenty-One is not open for breakfast, but it's a pretty good restaurant. They do nice business when they are open for lunch and dinner. I don't know what rule says you have to be open to trade 24 hours a day."
Acquisition Target
Bear Stearns is one of the few remaining independent trading and investment banking firms. A report issued earlier this year by a Salomon Smith Barney analyst indicated that the firm's chief executive officer, James Jimmy' Cayne, may wish to follow in PaineWebber's footsteps. (UBS Warburg is acquiring PaineWebber). The report mentioned that Cayne would consider selling out for four times the firm's book value, which is currently about $120 a share, or $18.9 billion. To this speculation, since quieted down, about the possible sale of Bear Stearns, Greenberg coolly said, "no comment."
This past September, Greenberg turned 73. When asked if he had any plans to retire or reduce the number of hours he spends on the trading desk, he playfully replied, "I do plan to die some day. I definitely plan to die. But I haven't picked a time yet."
For the young trader who is starting out, Greenberg said he gives the same advice he gives to any young person. "Get a job that you are happy with and one you can look forward going to everyday. You shouldn't work 15 or 20 hours a day. But you should enjoy going to work and enjoy going home."
