OpEd: Old School Ties: A true story: The good, the bad, the illegal

OpEd: Old School Ties: The Good, the Bad, The Illegal---commentary


On Saturday, June 9, 2007, I had the pleasure to meet an old alum from high school. It was back in 1963 when "M" was an ace photographer, and we had worked together on some articles for the school yearbook. In a reflective moment recently, I had reviewed all the classmates of yore, and his name popped up--I knew he was a writer. So---one Saturday night I started cold calling names that looked similar and ran across his father, now 92, who helped me get in touch. Now at the Caribou Coffee at Hwy 101 and Hwy 7 we had a moment to step back in time.

The very first thing "M" did after shaking hands, was to hand me the Business Day article from the New York Times that read " Quantifiying the Role of Old-School Ties In Investing." Click on the post for the full article.

At first I thought it was nothing really new. It's who you know not what. It was the "prestige" of the school not the content that mattered. Yes. Those were the rules of the few. Back applying for grad school, I had learned all this---just by filling out the graduate school application for Harvard. Pretty straightforward. Two or three small lines for academic awards to be listed. Then a huge space. "List the relatives, alums and donors of Harvard from your family. If you need additional space feel free to attach additional sheets."

It has always been there. The cozy bars off Wall Street where the traders congregate after hours telling tales of victory and defeat. That is what I had thought. Maybe it was making plans for victory in the future not the past that was being discussed.

The Business Day article in the New York Times suggests that "alums" and their connections had a dramatically better investment performance than ....regular investors. Regulators now are beginning to use that vast computer power to compare the trading records of investors and use "alum status" as one of the things to review.

Kind of a shock. I should have been prepared. After all, if Alums can launch wars abroad with little thought as to the factual basis, I guess investing is fair game.

The next time you get a call from an alum with a great stock tip---remember---it is always best to do the research yourself. Sophisticated crime is still......crime. Make a note of it.