Delanceyplace.com 06/22/06-Outside Interests

In today's encore excerpt, legendary Wall Street investor Leon Levy writes about the outside interests of professional investors:

"Perhaps the most astute financial mind in the Oppenheimer (investment management) galaxy was Daniel J. Bernstein...

"Daniel Bernstein died of leukemia at age 51 in 1970...He left behind a legacy of good works that reflected his diligence and originality. He started the National Scholarship Fund and Service for Negro Students when, after calling around the country, he realized there were many scholarships for African Americans that went begging simply because students weren't aware of them. He was able to enlist scores of college presidents to support the effort. Also a vocal opponent of the war in Vietnam, he paid for a series of ads in The New York Times that listed the names of professors and other prominent Americans who called for an end to American involvement.

"Although Danny was clearly a master of the game, making money was not an end in itself for him. I think that is true of many successful people in finance. Apart from giving money away, they have passionate outside interests. George Soros wants to rescue civil society; Jim Wolfensohn, a gifted dealmaker who is now president of the World Bank, has a passion for music; Jon Corzine seamlessly stepped from running Goldman Sachs to pursuing a liberal agenda in the U.S. Senate.

"It is easy to dismiss the outside indulgences of the rich as hobbies they can afford, but I think this misses the point. Quite often those outside interests provided an anchor or larger perspective that was essential to their success in finance. In the top financial ranks are disproportionate numbers of contrarians. (This makes perfect sense, since investors too deeply wedded to conventional wisdom will perform only as well as the bulk of the crowd.) These successful contrarians often have a worldview of which finance and the markets are but a small part."

Leon Levy, The Mind of Wall Street, Public Affairs Press, 2002, pp.71-4