Captain Eddie Rickenbacker was a demi-god during the fifties. This American Ace of Aces was not just a celebrated fighter pilot (26 ariel victories in just two months of combat flying), but also a race car driver, airline executive and wartime adviser.
At an analyst meet, during his tenure as president of Eastern Airlines, a voice from the audience stated: “Captain, I’ve figured out the company’s earnings three ways, based on the three different depreciation schedules.” Heads turned in disapproving wonder predominantly because the voice was female.
That was Muriel Siebert, an entry-level research analyst in the U.S., at a time when women were a non-entity on Wall Street and the patriarchs in the aviation industry were larger-than-life characters.
Siebert’s diligent observation and courage to sidestep the fact that she was a female analyst venturing into uncharted territory impressed the captain. He magnanimously paid her the highest compliment by loudly declaring: “Young lady, are you permanently employed? If not, there’s a job for you at Eastern Airlines.”
#1: Once you know what you want, don’t let anything stop you.
When asked what the secret to her success was, she answered: I put my head down and charge.”
Siebert was a research analyst in the U.S., at a time when women were a virtual non-entity on Wall Street. In 1967, there were 1,375 men on Wall Street and herself. When analyst meetings were held at luncheon clubs where women were banned or not allowed through the front door, she entered through the kitchen. She never let an obstacle stop her.
Once at a restaurant, the chairman of the stock exchange ridiculed her: “Muriel, some men object to you being on the floor. Why don’t you ABC your seat to a man?’ Her response: “Mr. Lasker, the day I ABC my seat to a man for a reason not to my liking, I will hold the goddamn biggest press conference the city of New York has ever seen.”
(An ABC Agreement is a contract between a purchasing member with a seat on the NYSE and the brokerage firm for which they work. The Agreement states that the employee of the firm can: transfer their seat to another employee in the same firm; retain ownership and purchase a new seat for another delegate of the firm and sell the seat and transfer any gains to the firm.)
The media dubbed the First Lady of Wall Street a total badass. Indomitable, fearless and gutsy, Muriel Siebert was a trailblazer for women in the all-male bastion of Wall Street.
#2. Know a lot about little.
That was her motto. Don’t be an expert on everything, but refuse to make judgements based on superficial knowledge.
When analysing a business, she studied the company from every possible angle, and talked to customers, suppliers and engineers. She zeroed in on 15 to 20 companies and really delved into her subject, spending time with executives and keeping up to date on all contracts, cancellations, slowdowns and bids. She studied everything there was to know about management, production, suppliers, competition, research and labour conditions. If a company had a disappointing quarter, she could figure out whether it was a systemic problem in the organization or something beyond its control.
At one time she heard rumours about a new development at Kodak. She dropped in at two camera stores on Wall Street and asked the salesmen what they thought. She was informed that the company was planning to introduce a drastically different model in a few months – the instamatic. She got hold of a model and found it easy to use. She deliberately took it a Christmas party, where it caused quite a stir among other guests. She knew she was onto something. She began to analyse the numbers because when learning everything possible there is to know about a company, it is the numbers that eventually tell the story. The stock was priced without reflecting any new possible developments. She put out a recommendation. The stock turned out to be a multi-bagger.
#3. Be a contrarian only when the facts back you.
Boeing already had the 707 jet and the 3-engine 727. The new 737 was a 2-engine jet that could get into smaller airports and could make money with fewer passengers. That information was coupled with the fact that a senior official from United Airlines informed her that the aircraft has passed every performance test it had been given on the day it was delivered. Another from Western Airlines gave her the brochure showing the interchangeable spare parts that could be used for different planes in the fleet, thus lowering the operating costs.
She gave a Buy on Boeing at a time everyone was giving a Sell. She boldly took a stand and the institutions that bought it tripled their money.
#4. Understand Risk.
She once suggested to female entrepreneurs that they write down the best and worst that could happen. If you aren’t willing to accept the worst, don’t do it. Recognizing a capacity for calculated risk is key to success. To Siebert, that means analysing a situation and asking tough questions.
She put down her success to three 4-letter words ending k: Work, Luck, and Risk. Risk is the ability to study the information, assess liability and be brave enough to make a decision.
In the mid-1980’s, she testified in Congress that junk bonds should be labelled as “hazardous to your financial health.” A CEO sent her a letter telling her she didn’t know what she was talking about.
In an interview in1999, she expressed her skepticism of the dot.com boom: “I don’t like the craziness that anything that has “dot.com” can just zoom. I want to see revenues. I want to see a position in the industry.” She cautioned investors about the 2-tiered market where some companies were vastly overpriced, while others vastly underpriced. Her advice was to pay deep attention to the numbers and the cash flow.
Advise that is extremely relevant two decades later.