Growing Rich - Arabictrader.com

KIRK KAZANJIAN
steel, and cement companies.’ You see, if you have all those research
people, you have to expect that they will push you to buy their stocks.
Otherwise they don’t have anything to do. Therefore, you get forced
into purchasing things you’re not attracted to. I contend that you
don’t want too many researchers on staff. That’s one of the troubles
with Wall Street research, and why I don’t use it. I think Stein Roe
did a good job, particularly in the environment they lived in, but the
environment changed so much. I think they were looking for some
magic elixir that would work at all times. Hickey started pouring
$250,000 a year into computer research. By the time I left, they were
using computers to play the momentum game. It was a disaster. It
just doesn’t work because in this industry, making an evaluation on
the future value of a company is inherently impossible to do using
science. As long as people are making the final judgments, emotions
will always interfere. You either have a sixth sense or you don’t.
That’s why you must be willing to change when conditions change.
A machine can’t do that.”
MANILA BOUND
By 1975, the young stockbroker Papp helped get elected to Congress
had moved up the political ranks and become President Gerald Ford’s
chief of staff. Don Rumsfeld was charged with filling a vacancy on
the Asian Development Bank board and felt Papp would be perfect
for the job. “The Asian Development Bank is almost a carbon copy
of the World Bank, except it’s in Manila,” Papp explains. “It loans
money to foreign governments to help them out with specific projects.
There were 43 member countries at the time, with approximately 300
professionals working at the Bank. It made 15-year loans at rates in
the range of 1 or 2 percent, well below the market. This was at a time
when inflation was around 7 percent. I talked to my wife about the
opening and she said, ‘Let’s do it.’ So we sold our house and I resigned
from Stein Roe.”
This all took place shortly after Nixon’s resignation. The White
House was super-sensitive about potential scandals and conflicts of
interest. “So in order to be appointed to the post, I had to agree I
would take no profits out of Stein Roe when I left,” Papp reveals. “I
had put in $20,000 of equity as a partner. When I left, I took out
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