The occasion will almost certainly go unmarked, but the 18th of this month will be the 30th anniversary of what has come down to us as the arbitrageur Ivan Boesky’s “greed is good” speech at the 1986 commencement ceremonies of the University of California at (of all places) Berkeley.
Mr. Boesky did not actually say, “Greed is good” in his infamous speech, any more than Jimmy Carter used the word “malaise” in his. It fell to the filmmaker Oliver Stone to shape Mr. Boesky’s actual ramblings into those three pithy words, in his meretricious film Wall Street (which, in a characteristically creepy Oedipal touch, he dedicated to his father Lou Stone – a stockbroker alongside whom I worked in the late 1970s). But I digress.
Mr. Boesky must already have known, even as he spoke, that he was a walking dead man, inasmuch as the monumentally untalented Dennis Levine had been arrested in New York a week earlier on charges of insider trading. Mr. Levine would shortly roll over on anyone and everyone who had been involved with him in the blatant front-running of the hostile takeovers that were the great wave of that era – most notably Mr. Boesky.
The whole sordid story was told – in the highest of high dudgeon – by James B. Stewart in Den of Thieves, a huge bestseller of the day and still a worthwhile read for advisors seeking a better understanding of Wall Street’s more dramatic episodes.
Entirely unavailable, of course, will be any nuanced appreciation of how much long-term value accrued to the American investor from the very advent of the hostile takeover itself. It, more than any other single phenomenon, moved the locus of corporate power out of insular, self-perpetuating managements to where it always belonged, and where it remains today: vested in the shareholders themselves.
But that’s not the stuff of which bestsellers are made. The inevitable excesses and even perversions of free market capitalism and not its incalculable benefits always make the best copy – as indeed they do in Den of Thieves.
© 2016 Nick Murray. All rights reserved. Reprinted by permission. Nick reviews current books, articles and research findings in the “Resources” feature of his monthly newsletter, Nick Murray Interactive. To download the current sample issue, visit www.nickmurray.com and click on “Newsletter.”