Page 99 - The Way to the Top

Alan C. GREENBERG

Chairman of The Bear Stearns Companies, Inc.

My father owned some retail stores in Oklahoma and he taught me many
things about running a successful business. Two of his principles made a
tremendous impression on me. First, a great deal of his sales were based

on credit. When a customer without a charge account came in and wanted
to buy some small item, my father would walk up to the credit department
and say, “Open a charge account for this young lady.” The customer was
amazed and flattered. My father said, “That lady will be a customer

forever, and if she doesn’t pay for this small item, she can only beat me
once.” He had the credit department in all the stores act accordingly. I use
this theory of “The person can only beat me once” all the time.

The second commonsense rule drummed in my head was “If you have

stale merchandise, sell it today regardless of price, because tomorrow it
will be worth less.” This theory of getting out of stale merchandise and
into fresh positions certainly can be applied to the stock market. If you
study the stocks on your own, you will see how much better off you would
be if you sold the poor performers and moved your money into well-

managed companies. Not every industry has the liquidity of the stock
market or the retail business, but even where there is less liquidity, the
theory works. Few people want stale bread today, and nobody will want it

tomorrow.

Keep it fresh