Mike Milken and Warren Buffet: The Two Sides of Wall Street
During Warren Buffet’s shareholder meeting this May, a young man reportedly asked Mr. Buffet for his definition of success. In his answer, Mr. Buffet made no mention of wealth nor did he utter a single word about rising to the top, or having power over anyone or anything. Mr. Buffet described success as acquiring love. To become successful, he recommended, strive to be someone who is, in a word, “lovable.” If you give love, he opined, you get back more than you give.
When I heard this story, it drew a sharp contrast to another comment made to me over fifteen years ago by another Wall Street legend.
In January 1986, only weeks before the heat in the corporate kitchen grew into a lava-roast, I accepted a position at Drexel, Burnham, Lambert to manage International Sales and Trading, a position identical to one I had previously held at Morgan Stanley, another giant investment banking firm. Drexel was then the E-ticket of Wall Street rides-a firm that was aggressive, in-your-face, full of energy, changing the world of investments, making billionaires out of mere millionaires, and the envy of every competitor.
What more could a young, ambitious man want, I asked myself? “Nothing more” seemed the obvious answer. As I entered 60 Broad and elevatored up to my new home that first day, I had a smile on my face and bounce to my step-I was, after all, a man with great expectations just handed even greater expectations, certain I would set the investment world afire.
I got the “set afire” part right.
Based in New York, I had management responsibilities around the world and spent my first or second week in the London office surveying those operations. Shortly after arriving, I received a frantic call from Drexel’s New York office.
“Ken,” a senior executive told me, his voice trembling, “Michael wants to meet with you.”
“Fine,” I said. “I’ll be back in New York in two or three days — ”
“No. You don’t understand. He wants to see you tomorrow. At 5:00 a.m.”
The “Michael” who wanted to see me was Michael Milken, the firm’s de facto head and a person who had purportedly made — for himself — close to a billion dollars in salary, stock appreciation, and bonus the previous year. Being the most recently hired executive, I was on his list of people he desired to meet. And meeting with Milken was, it turned out, always on his schedule. Ergo, I was on a plane out of Heathrow two hours later. Passing through several time zones, I plopped into my Beverly Hills hotel room around eight that same evening-a hotel, I was informed, owned by Mr. Milken.
The next morning, we finally met in Drexel’s Beverly Hills offices-a building, I was told, owned by Mr. Milken. The first words out of the man’s mouth were: “Ken, your value as a human being is solely determined by how much money you make for me. For this firm. And for yourself.”
To this day, I recall the numbing effect those words had on me. Despite sudden reservations and anxiety, I am certain I nodded dully at Milken as if to say, “Sure, I understand.” If anything else was said at the brief meeting, I do not recall what it was.
There weren’t a lot of ways to misinterpret Milken’s statement, but I tried to convince myself I had. Otherwise, what had I gotten myself into? Not long after, the answer came in no uncertain terms. Items from my desk-and from everyone’s desks for that matter-were crated and carted out by law enforcement, some of these items never to be seen again. Three years later (I had a two-year contract and fled when that lapsed), the firm went bankrupt and Michael Milken went to prison.
Today, with revelations of corporate greed, $1.4 billion Wall Street settlements, NYSE specialist abuse, and accounting fraud, it is easy to be critical of our capital markets. The win-at-all-costs mentality exists and is a sad reality. But in contrast to Milken’s words to me-“Your only value as a human being is how much money you make” — Mr. Buffet’s thoughts are inspiring. It is reassuring to realize that there are good guys living on this gold-plated avenue. I once had the privilege to work closely with Lou Simpson, one of Mr. Buffet’s closest associates. Lou is, without doubt, one of the most generous men I have ever known in this or any other industry. And that makes so much sense, especially in light of Mr. Buffet’s advice offered to the young man at the recent conference. It is not an accident, I think, that a good man attracts good men.
So, when I vent against Wall Street abuses-which is frequent — I am comforted by the knowledge that, when all is said and done, there are hugely successful people who refuse to believe that their worth is based on anything more than their worth, as human beings.