VIEWPOINTS : Anecdotes Show View From the Top

The mysteries of business success and failure are rarely found in scientific formulas but rather in the stories of entrepreneurs and corporate titans. Anecdotes sometimes condense the wisdom of a whole lifetime spent in the stock market. Or they can recreate the exciting or humorous moments when great merchandising ideas were born.

After 30 years of collecting anecdotes, here are some of my favorites from the world of business:

Marshall Field was walking through his Chicago store one day when he came upon a shop assistant in a heated argument with a customer.

“What are you doing here?” Field demanded of his employee.

“I am settling a complaint,” the clerk explained.

“No, you are not. Give the lady what she wants,” Field said, thereby giving birth to the famous motto that summed up his retailing philosophy.

Marshall Field is also credited with the classic line: “The customer is always right.” This became an article of faith with him, even when he had reason to suspect otherwise. A lady once took advantage of Field’s generous money-back guarantee and returned an expensive cape the day after a ball for which she had “bought” it. Field told his manager to give her a refund with no questions asked. Looking more carefully at the almost-new cape, he pulled out a monogrammed handkerchief from its pocket.

“If she said she didn’t wear it, she didn’t wear it,” Marshall Field muttered to the manager. “But I guess we’d better send her back the handkerchief.”

When Frank W. Woolworth opened his first “Great Five-Cent Store” in Utica, N.Y., in 1879, a rival merchant tried to fight the new competition by putting out a big sign: “Doing business on this same spot for 50 years.” The next day, Woolworth also hung out a sign, which said: “Established last week: no old stock.”

Then there is Alfred Bloomingdale, a scion of the New York department store family, who was quite stage struck in his younger days. After backing a number of Broadway flops in the 1930s as an investor, he decided that he could do better if he chose and produced his own shows. So he spent not only money, but a vast deal of energy and time on this project.

Finally, after the first night of the play in Philadelphia, it was clear the production was another flop. It was then that some good friend drew the dejected Bloomingdale aside and gave him a classic piece of advice:

“Al, close the show and keep the store open at night.”

Advice has never been in short supply about the stock market. But Warren Buffett, one of the greatest investors of our time, can be coy when pressed for his investment philosophy. He has claimed to operate on just two rules: “The first rule is not to lose money. The second rule is not to forget the first rule.”

Buffet has maintained his sanity by staying far away from Wall Street. From his office in Omaha, Neb., he has been able to watch the markets from a relatively calm perspective, uninfluenced by rumor and hype. One of his favorite illustrations of how most people buy stocks is about a sports fisherman who goes into a store to buy a lure. The salesman shows him a wide assortment of ingenious and expensive gizmos. Unable to choose, the sportsman asks: “Do fish really like this sort of thing?” “I don’t know,” the salesman replies curtly, “I don’t sell to fish.”

More than a hundred years ago the wily old “Commodore,” Cornelius Vanderbilt, used to describe the essence of his market strategy: “I bide my time.” Though secretive and devious, Vanderbilt was often generous with advice. He spent the Civil War driving up the price of Harlem, his favorite railroad stock. One day, the son of Vanderbilt’s good friend, Dean Richmond, who ran the New York Central Railroad, came to see him.

Advice on Chartists

Young Richmond had sold Harlem short--that is, he sold borrowed shares--when the stock was low. Now, with the stock’s inexorable rise, he was facing that bottomless abyss that the Evil One devised particularly with short sellers in mind. He asked Vanderbilt for advice. “Never sell what you haven’t got,” the Commodore replied grimly. But he helped the young man to cover his short contracts and within a few weeks to recover all he had lost.

John Templeton, one of the giants of the mutual fund business, made his first nest egg when he bought a hundred shares of every bankrupt stock on the New York Stock Exchange at the end of the Depression.

Asked about chartists, (those technical analysts who claim that they can predict the future of the stock market from charting what it had done in the past), Templeton recalled an early partner of his, by the name of Vance, who liked to give public lectures about investing. On such occasions, he would unroll a very large and very colorful chart, on which various squiggly lines claimed to graph where the market had been for the previous 20 years.

Once, when somebody demanded to know how he arrived at this chart, Vance told a fascinated audience that it represented the rate his hens were laying in the chicken coop at the back of his house.

The senior J. P. Morgan is often quoted about predictions. He was asked once what the market was likely to do in the near future. “It will fluctuate,” he opined.

Morgan was equally adept in dodging people who wanted more than his advice. Once a speculator by the name of Charles Flint called on him. The speculator was in temporary difficulties and he decided to touch Morgan for a substantial loan.

The financier asked Flint to accompany him on a stroll around the Battery, at the lower extremity of Manhattan. The two men discussed the weather in some detail, when after about an hour or so, the exasperated Flint burst out:

“But Mr. Morgan, how about the million dollars I need to borrow?”

Morgan held out his hand to say goodby, and added:

“Oh, I don’t think you’ll have any trouble borrowing it from somebody now that we have been seen together.”