The world of finance contains many larger than life characters who transcend the industry,
and whose records speak for themselves.
And many of these men and women have an almost mythical quality surrounding.
Today, I'm traveling to Boca Raton in Florida to speak with one such man.
A man who's built a stellar career that has its roots in old fashioned values like discipline,
thoroughness, and a work ethic, which has become the stuff of legend on Wall Street.
Now after a high profile battle with the SEC, he's chosen to return his investors' capital,
turned his back on Wall Street after 40 years, and concentrate on his family office and philanthropic
endeavors, a decision I want to explore today to try and understand whether it's a natural
winding down to his career or something more.
So please join me for a conversation.
With Lee Cooperman.
Lee, thank you so much for having us in your home.
It's a pleasure to be here.
LEE COOPERMAN: My pleasure.
GRANT WILLIAMS: The beauty of talking to you is I don't need to introduce you to your audience.
They're all going to be Intimately aware of who you are, and your track record.
But what I really want to do is walk through your career with you, and give people a chance
to hear about your experiences.
And from you talk, about how you adapted and survived and thrived in an industry that's
changed enormously over the course of your career.
LEE COOPERMAN: Well, I would attribute whatever success I've enjoyed frankly, to good luck,
hard work, and good intuition.
And so if I trace my career along the way, I could point out why I say what I say.
So back in the '60s, if you finished major and minor in college in three years, you could
count your first year of medical, dental school toward your fourth year of college and get
a separate degree.
So in December of 1963, I toiled very hard in the University of Pennsylvania laboratories.
And I took physical chemistry during a summer to finish off my major.
And then I immediately enrolled in the University of Pennsylvania dental school.
And after eight days, which I see a smile on your face-- and after eight days, I made
a determination that I wasn't sure I was heading in the right direction.
That was like intuition.
Very traumatic experience.
My father, may he rest in peace, was walking around saying, you know, my son, the dentist.
I paid tuition for a year, I paid room and board for a year.
I had to suffer the embarrassment of going back to undergraduate school.
But I made the determination that I wanted that one year to think through whether I was
fully committed to dentistry or not at great cost.
And I call that intuition.
So I went back to Hunter College City University of New York.
The only one that understood the trauma of the decision was the Dean, Glen T Nygren,
who's deceased.
I had to get permission for him to matriculate back into the City University of New York.
He gave me permission.
He complimented me on the decision.
And I had a year of electives available, because my major/minor was all done.
And so I took 10 courses in economics, got 10 As, and never looked back.
I found what interested me.
And so I say that's number one-- intuition.
Then when I graduated, I went to work for Xerox up in Rochester, New York as a quality
control engineer.
And decided to basically go back to school, get an MBA.
I went to Columbia Business School.
And that's been very helpful to me.
And some of the people you know, like Samdberg, Mario Gabelli become great friends as a result
of meeting them at business school.
And that opened the door to me at Goldman Sachs.
And I consider myself very anal.
So when I'm supposed to be somewhere, I'm on time, if not early.
And I meet all deadlines-- very old fashioned.
And it was the only time in my life I didn't meet a deadline.
I got a job offer from Goldman Sachs in 1966, and I get a call from who turned out to be
my boss ultimately, Bob Danforth.
And said, Lee, we're very disappointed, we haven't heard from you.
And I said, well, I'm going to be honest with you.
I'm broke.
I have a National Defense Education Act student loan, have a six-month-old kid, have no money
in the bank.
And Goldman is not one of the higher offers I have.
It's actually one of the lower offers.
But I liked everybody I met.
And I was very familiar with the Union Carbide compound interest tables, which were floating
around at that.
Time and the job offer was about 11,000, 11,500 or something like that.
And I asked him if he thought I could make 25,000 in five years.
That was like a 15% compound rate of growth.
And he gave me-- he was from Yankton, South Dakota, and he gave a nice understated answer.
He said, if you work hard and keep your nose clean, I think you could do it.
So I said, OK, I'll accept a job.
And so if I look back, Goldman is one of the few firms whose names haven't changed for
the last 50 odd years.
I could have gone to Goodbody, I could have gone to Kuhn Loeb.
You know, Loeb, Rhoades, Hornblower.
You know, there's so many different firms are no longer around-- Kuhn Loeb.
And I went to a firm whose name didn't change for the last 50 years.
And they experienced great prosperity, and I enjoyed participating in that prosperity.
So that was luck, intuition, whatever.
And you know, when I became a Goldman partner, it was 1976.
The firm had a record year in 1976.
They earned all of $40 million.
And the year I retired 14 years later from Goldman to start Omega, they earned $1.8 billion.
So as a partner, I shared in that prosperity.
So I've been very lucky.
But I've worked very hard.
I worked 70 hour work weeks plus, plus I worked seven days a week.
But I enjoy what I do.
And I don't look at it as work.
You know, Warren Buffett says he likes the tap dance to work, go to work with people
you respect and admire, and everything takes care of itself.
And that's kind of the life I've led.
You know, I'm a very simple guy.
And you know, I've been very lucky.
And I appreciate the luck I've had.
GRANT WILLIAMS: Everybody that you and I know in common, that's the one thing they always
point out-- how hard you work.
And how for you, this is something that you genuinely love doing.
LEE COOPERMAN: Yes.
Well, I enjoy the hunt.
What I enjoy doing is finding something somebody else doesn't see, making a bet, and having
Mr. Market proved me right.
GRANT WILLIAMS: Right.
LEE COOPERMAN: And I enjoy that.
And I'm kind of narrow in my interest.
I don't collect sports teams.
In fact, I don't even follow sports hardly at all.
I'm not an art collector.
I've been very fortunate, I've been married 54 years to the same woman.
I have two grown kids with three grandkids, and my kids are terrific, and my grandkids
are even better.
And so I'm very focused on what I do, and I enjoy what I do.
And I don't look at it as work.
You know, it's old fashioned, but it's kind of the way I look at it.
I enjoy what I do.
GRANT WILLIAMS: That hunt that you talk about.
I guess for someone that was set on a path to become a dentist, obviously, you switched,
and finance became something that you found you loved.
And that hunt, going somewhere like Columbia Business School, and that value invest in
the Graham Dodd School-- how did that shape the way that you invest for the rest of that
career?
LEE COOPERMAN: Well, you know, I studied under Professor Roger Murray, who was a real practitioner.
He was an adjunct professor.
He actually was a Dean of the school for a short period of time.
He taught security analysis and he also had a day job of chief investment officer at College
Retirement Equities Fund.
And he was a real practitioner.
And he just helped honed and focus my interest.
And it's you find what you like.
And I enjoy working with numbers, I enjoy working with people.
Ben Graham and the Intelligent Investor hypothesized that the security analyst evaluates management
twice in the investigation once through the numbers.
Because after all, when you look at a company, their return on equity, their market share,
their profit margins, the return on capital is a function of the quality of management.
And then you meet the manager face to face, you interrogate them, you ask questions, you
see how they respond to your questions.
And you know, it's something I just found an affinity for, an enjoyment.