Jack White pretty much developed the concept of the discount brokerage, the way stocks have come to be traded on the Internet for a small fee. This was in the 1970s and ’80s, years before E-Trade, Ameritrade or Charles Schwab.
He sold his company to the Toronto Dominion Bank for $110 million in 1998, back when $110 million bought more than a good breakfast at Brick and Bell, and the company formed the basis for TD Waterhouse, which became TD Ameritrade.
White was also Elvis Presley’s squad leader in the Army back in 1958. His job, among other duties, was to make sure Elvis was on the parade ground in Tennessee with everybody else at 6 a.m.
Jack White, 73, is one of those calm people who seem to be at the right place at the right time. Then he recognizes where he is, sees it before anyone else, and acts on it.
“Luck of the Irish,” laughs White, who doesn’t believe in luck, only timing.
We are having lunch at the Hotel La Jolla at the Shores, salmon on kale.
“He was a nice fellow, Elvis, did everything everybody else did,” White says.
Weren’t there a lot of 15-year-old girls trying to get in to see Elvis then, like thousands?
“Outside the gates, maybe,” he says. “It was the end of the big-band era, start of rock ’n’ roll.”
White started his career as a commodities trader on the Chicago Board of Trade. There were no written contracts, only verbal agreements, he recalls. He came up with idea of a mutual fund that would combine 10 percent commodities with stocks. He called it Comsec (commodities plus securities) and sold it off to a major insurance conglomerate.
His father, a meatpacker in the city that called itself “Hog Butcher to the World,” Chicago, had been the first to import soy from China in the 1940s, squeezing the oil out and selling the pulp for high-protein supplement cattle feed, a new idea that broke the monopoly of agribusiness giant Cargill, and in a way was a precursor to the global economy White believes in today.
“Do it different. Do it better,” he says. “I guess I learned that from my father.”
White saw change coming to stock trading very early, in the 1960s and ’70s. Back then, to trade 1,000 shares of a $50 stock cost the retail investor about $400, not the $5 it might cost today. But big institutions were already starting to trade electronically. White realized his company could do the same thing for large private investors, and later the general public. His technical people put it together, and the Securities and Exchange Commission went along.
“They could not deny the concept being taken to the public, since the largest institutions were already doing it,” White says. “Our timing was wonderful.”
Traders flocked to Jack White & Co., and it grew to represent 120,000 clients with $12 billion in assets.
Much later, White penned a four-point program for how to do it:
• Make integrity paramount. “It’s no accident I put my name on my company, just as small businesses do today in a place like Ireland.”
• Hire good people, “a team that’s competitive like a baseball or football team, where they want to get onto the field and support each other because their primary objective is to be No. 1 in the country, that builds a lot of creativity.” White hired part-time UC San Diego students with flexible schedules and became the first 24/7 brokerage in the country.
• “Do it different, do it better,” a veritable mantra.
• “Embrace change, don’t fight it.” He shrugs when I mention high-speed trading. “It’s made everything more volatile, but it’s not going to go away.”
White sold two years before the Internet crash but had already become an original investor in Qualcomm. “We knew Irwin (Jacobs) and Andy Viterbi socially. Just a couple of very bright guys. I’m out now, but we were in for a very long time. Did quite well.”
He has a company in China, in partnership with IBM, investing mostly in hotels, air transportation, and algae oil (“we look for opportunities in the Chinese Century”), and he works with his son in private real estate investment trusts. But his mindset these days is with conserving capital rather than just trying to make more money.
“I’ve done some hedging with gold. It hasn’t done so good lately, but it will go back up, I think. It’s at 13 (hundred dollars) today, and I think could hit $2,500 an ounce. Cycles are predictable, but the timing of cycles is not. Timing is luck. That’s when you move. Like now the timing of gold is right to get back in. But again you look back on success, and it’s hard.”
What is his specific advice should one be lucky enough to have capital to preserve?
“Very short-term municipal bonds, Triple A. That’s about the only place I feel comfortable, other than gold, but gold’s a hedge against inflation. They don’t have much yield, but they conserve your capital. They have about 3 percent, so that’s not bad.”
Predictions for the future?
“We’ll see how it all plays out. What worries me the most now is the trillions we are printing of paper money. You gotta pay eventually. I believe this will trigger huge amounts of inflation.”
Any time frame on that?
“Nope. Inflation followed by deflation, and a collapse in the economy. I’ve seen that scenario play out in the past. I’m pessimistic because of the inflation situation — and politics. I don’t think we are working well politically. That worries me. Politics turn me off, frankly. We are independents. We vote the person not the party. But, Steve, we are sitting here on the beach on a sunny day in La Jolla. That makes me optimistic.”
He chuckles.
He sold his company to the Toronto Dominion Bank for $110 million in 1998, back when $110 million bought more than a good breakfast at Brick and Bell, and the company formed the basis for TD Waterhouse, which became TD Ameritrade.
White was also Elvis Presley’s squad leader in the Army back in 1958. His job, among other duties, was to make sure Elvis was on the parade ground in Tennessee with everybody else at 6 a.m.
Jack White, 73, is one of those calm people who seem to be at the right place at the right time. Then he recognizes where he is, sees it before anyone else, and acts on it.
“Luck of the Irish,” laughs White, who doesn’t believe in luck, only timing.
We are having lunch at the Hotel La Jolla at the Shores, salmon on kale.
“He was a nice fellow, Elvis, did everything everybody else did,” White says.
Weren’t there a lot of 15-year-old girls trying to get in to see Elvis then, like thousands?
“Outside the gates, maybe,” he says. “It was the end of the big-band era, start of rock ’n’ roll.”
White started his career as a commodities trader on the Chicago Board of Trade. There were no written contracts, only verbal agreements, he recalls. He came up with idea of a mutual fund that would combine 10 percent commodities with stocks. He called it Comsec (commodities plus securities) and sold it off to a major insurance conglomerate.
His father, a meatpacker in the city that called itself “Hog Butcher to the World,” Chicago, had been the first to import soy from China in the 1940s, squeezing the oil out and selling the pulp for high-protein supplement cattle feed, a new idea that broke the monopoly of agribusiness giant Cargill, and in a way was a precursor to the global economy White believes in today.
“Do it different. Do it better,” he says. “I guess I learned that from my father.”
White saw change coming to stock trading very early, in the 1960s and ’70s. Back then, to trade 1,000 shares of a $50 stock cost the retail investor about $400, not the $5 it might cost today. But big institutions were already starting to trade electronically. White realized his company could do the same thing for large private investors, and later the general public. His technical people put it together, and the Securities and Exchange Commission went along.
“They could not deny the concept being taken to the public, since the largest institutions were already doing it,” White says. “Our timing was wonderful.”
Traders flocked to Jack White & Co., and it grew to represent 120,000 clients with $12 billion in assets.
Much later, White penned a four-point program for how to do it:
• Make integrity paramount. “It’s no accident I put my name on my company, just as small businesses do today in a place like Ireland.”
• Hire good people, “a team that’s competitive like a baseball or football team, where they want to get onto the field and support each other because their primary objective is to be No. 1 in the country, that builds a lot of creativity.” White hired part-time UC San Diego students with flexible schedules and became the first 24/7 brokerage in the country.
• “Do it different, do it better,” a veritable mantra.
• “Embrace change, don’t fight it.” He shrugs when I mention high-speed trading. “It’s made everything more volatile, but it’s not going to go away.”
White sold two years before the Internet crash but had already become an original investor in Qualcomm. “We knew Irwin (Jacobs) and Andy Viterbi socially. Just a couple of very bright guys. I’m out now, but we were in for a very long time. Did quite well.”
He has a company in China, in partnership with IBM, investing mostly in hotels, air transportation, and algae oil (“we look for opportunities in the Chinese Century”), and he works with his son in private real estate investment trusts. But his mindset these days is with conserving capital rather than just trying to make more money.
“I’ve done some hedging with gold. It hasn’t done so good lately, but it will go back up, I think. It’s at 13 (hundred dollars) today, and I think could hit $2,500 an ounce. Cycles are predictable, but the timing of cycles is not. Timing is luck. That’s when you move. Like now the timing of gold is right to get back in. But again you look back on success, and it’s hard.”
What is his specific advice should one be lucky enough to have capital to preserve?
“Very short-term municipal bonds, Triple A. That’s about the only place I feel comfortable, other than gold, but gold’s a hedge against inflation. They don’t have much yield, but they conserve your capital. They have about 3 percent, so that’s not bad.”
Predictions for the future?
“We’ll see how it all plays out. What worries me the most now is the trillions we are printing of paper money. You gotta pay eventually. I believe this will trigger huge amounts of inflation.”
Any time frame on that?
“Nope. Inflation followed by deflation, and a collapse in the economy. I’ve seen that scenario play out in the past. I’m pessimistic because of the inflation situation — and politics. I don’t think we are working well politically. That worries me. Politics turn me off, frankly. We are independents. We vote the person not the party. But, Steve, we are sitting here on the beach on a sunny day in La Jolla. That makes me optimistic.”
He chuckles.
