The Survivor: Catching up with Chris Gardner

The inspiration behind an autobiographical bestseller and the 2006 major motion picture, “The Pursuit of Happyness,” Gardner went from one extreme of the sociological spectrum to the other. While working his way up the ladder in a competitive internship at Dean Witter’s San Francisco office in the early 1980s, Gardner and his infant son spent nights in a local homeless shelter. Eventually, hard work and persistence resulted in success, wealth, hobnobbing with the likes of Nelson Mandela and Oprah, and gracing the cover of Trader Monthly’s December 2007 issue.

That issue’s feature story captured the tale of the man who has seen all sides of life: poverty and wealth, sorrow and joy, love and despair, and most everything in between. As an illustration of the American dream, it doesn’t get much more vivid than Chris Gardner.

After watching Bear Stearns, the investment house that cemented his career, “burn” to the ground, Gardner recently gave Trader Daily his thoughts on the current market, restoring client trust, and building a brokerage career today.
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“A slow walk to Wall Street is how others describe my life.”
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Gardner was born on the north side of Milwaukee in 1954 into a life of poverty and domestic violence. After graduating from high school, Gardner enlisted in the Navy and served four years at Camp Lejeune in North Carolina. He eventually supported a wife and new son, Christopher Jarrett Medina Gardner Jr., by selling medical equipment throughout San Francisco. However, Gardner’s path took an immediate 180-degree turn at the sight of Robert Bridges, of then-boutique investment house Donaldson, Lufkin & Jenrette, climbing out of a red Ferrari.

Gardner immediately asked Bridges two questions; what did he do, and how did he do it? Bridges admired Gardner’ desire. He explained the world of investment management for wealthy individuals and how, in spite of Gardner’s lack of financial experience, he could qualify for a brokerage training program. As he would later comment to Trader Monthly, “For reasons I can’t begin to explain, I knew with every fiber of my being that this was it!”

His first big break, acceptance into E.F. Hutton’s trainee program, fizzled after his hiring manager was fired before the course began. Gardner had already quit his sales job to pursue the now-terminated offer, and to make matters worse, he and his wife had separated. Now faced with supporting a 19-month-old son, Gardner persisted, scouring trainee programs and knocking on doors. And not without a price – $1,200 in parking tickets amassed as a result of interviews around the city was settled via a 10-day stint in jail. Upon his release, he found himself reunited with his son, but homeless and with no prospects.

While spending nights wherever he could find shelter, Gardner was eventually offered a $1,000-per-month position as a broker trainee at Dean Witter. Arriving early and leaving late each day, Gardner tirelessly worked the phones, contacting prospective clients with a personal goal of 200 calls per day. He showed a knack for the business and passed his licensing exam, making him a full-time employee of the firm. All the while, though, Gardner continued to struggle clandestinely with homelessness. With shelters at full capacity, Gardner would often lock himself and his son in one of the public bathrooms of the Bay Area Rapid Transit (BART) train station for the night. The two ate in soup kitchens, bathed in public restrooms, and lugged their few positions via shopping cart.

It wasn’t long before Gardner’s militant work ethic caught the attention of Gary Shemano, a manager at Bear Stearns. Gardner joined Bear, and it was there that he evolved into a true institutional player. As he gained experience, Gardner’s increased compensation allowed him to move off the streets and afford day care for then 2-year-old Chris Jr. Gardner was finally getting by, but he would not settle for mediocrity. His 100% work ethic eventually brought him east to Bear’s New York headquarters with a position analyzing total return strategies for institutional portfolio managers.

By 1987, Gardner had launched his own firm, Gardner, Rich & Co., servicing public pension funds with equity and fixed-income brokerage. Ironically, in the early 1990s, his company oversaw bond offerings associated with the financing of BART, the very train line that once provided the only shelter Gardner could afford.

Fast forward years later, and Gardner remains CEO of his multi-million-dollar firm, is a sought-after motivational speaker, and has helped fund numerous philanthropic projects including a $50 million, low-income housing initiative for San Francisco’s unemployed. As a follow-up to the 2007 article, we caught up with Chris to get his current take on the markets and the financial industry in general:

TraderDaily: You said in the original Trader Monthly interview “money is the least significant aspect of wealth.” As someone who was once living out of doors for a time, do you value security differently than money and the ability to buy nice but unessential things?

Gardner: Security is entirely different from, far more important than, and not necessarily tied to, money.  Money and the stuff you buy with it will come and go.  You can never be secure about money – and at the end of the day, that’s OK.  What you need is to be secure in your ability to create the life that you want.  That’s invaluable.  That means everything.  Even at my lowest point, when I didn’t have any money, I was secure in the knowledge that I could create my own successful future.  Money would be a part of it – but only a part.

TraderDaily: In that same interview, you mention that wealth is not derived only from money. Yet you pursued wealth with an extraordinary tenacity – do you think it is easier to make such observations AFTER being successful?

Gardner: I have to correct you…I was not pursuing wealth – I was pursuing my passion, and wealth was a byproduct because I was so tenacious in my pursuit of my passion.  It was never solely about the money.  You know the only other profession I think I could have been as passionate about?  Being a school teacher.  Now those salaries are low, but seeing the lights come on in a kid, knowing you’re helping to increase the promise in the lives of children, that would have made me the richest guy in town.  And if I was truly passionate about teaching, I bet you I could’ve come up with a way to make additional money doing something related to the field.  That’s the only way you do make money – by being so jazzed about what you’re doing that you can get creative and work at it with a passion that makes others take note and support your vision.

TraderDaily: In our age of slashed commissions, internet brokers, and non-commission products like exchange-traded funds and no-load mutual funds, how would you adjust if you had to plot another ascent from nothing to everything?

Gardner: The first thing I’d be doing is trying to understand how and where I could add value to my clients.  One of the biggest problems we have in our business today is a lack of confidence in the government, the banks, and financial institutions in general.  And that can’t be regulated or legislated.  So, more than ever, you need the eyeball-to-eyeball contact, you need to create the situation where confidence is instilled.  Your client needs to be able to look you in the eyes and ask himself, “Do I trust this guy?”  And you have to get a sense of what he needs, and not be afraid to say “my company can’t help you with that.”  But if you can work together, then you must DELIVER the goods.  This has always been true, but now it is truer than ever.  People have just been so rattled.

TraderDaily: Have you ever come across other “diamonds in the rough” that could impact the financial community as you have but did not have the resources? Anyone who has reminded you of yourself?

Gardner: I see those people every day, and not only in my business.  Everywhere I go, people stop me on the street, in airports, in elevators.  They tell me their stories, they show me how passionate they are, how hard they are willing to work.  There’s no shortage of diamonds.  There’s a shortage of opportunities.  And not just on Wall St., but all across America in almost every field you can think of.  Those “diamonds” who make it are the people who are the most resourceful and tenacious – they are borderline fanatical about pursuing their dreams.

TraderDaily: Would cold calling get the job done in today’s socially-networked world, where people obsessively screen calls and use other forms of communication?

Gardner: No.  It wouldn’t work.  In some places it’s illegal to cold call!  You can’t call between this hour and that hour.  I’ll tell you something: I’ve had people cold call me.  No kidding.  Cold calling me – the guy who spent a few long years making hundreds of calls a day, digging himself out of a hole with every number dialed.  “Chris I just wanted to give you a follow-up call…”  What?!  That ain’t gonna work.  Do you know who you’re talking to?  Hell, no!

TraderDaily: Do you think what you accomplished could take place on today’s Wall Street, or have ETFs, index trading and self-directed discount brokerage customers diminished the role of the stockbroker?

Gardner: I could do it.  I’m not being flippant or braggadocios.  But if the situation was the same – I was homeless and hungry and had a 14 month-old baby son to support – nothing would stop me.

TraderDaily: Did you encounter racism on Wall Street? How did you overcome it?

Gardner: I did and I still do.  Racism is not new, and it’s not personal, and it’s not going away.  But I put my energy into the people who are giving me an opportunity and ignore those who have been conditioned to try to block me.  Know that.  Accept that.  And have your passion be bigger than their small-minded racism.

TraderDaily: Do you feel the lack of a college degree was a hindrance?  Or were you frankly better off without it? What advice about education would you give today to a young person considering a brokerage career?

Gardner: Personally, I was better off without a degree.  A very linear thought process often comes from a classic education and to be an entrepreneur you can’t have a linear brain.  Nothing is 123, ABC.  I have two words for you: David Geffen.  Two more: Bill Gates.  Some of the most talented people in this country don’t have a degree in the field in which they work, or don’t have a degree, period.  But I do have to say that my seeing my daughter graduate from college – the first Gardner ever to do so – was one of the proudest moments of my life.

For those young people thinking of a brokerage career?  Consider the world your classroom.  Learn from all of the talented people you meet.  Create and nurture relationships.  You don’t need an alumni network – hell, everyone in your class will be fishing in the same hole.

TraderDaily: Do you think clients are more or less distrustful of financial professionals than when you were coming up?

Gardner: Clients are much more distrustful today, and understandably so.  They’ve been so badly hurt.  As a financial professional nowadays, you have to have a touch of the therapist in you.  You need to evaluate and treat the whole patient.  When I sit down with a client now, I need to understand all of their hurts, their hopes, their plans for the future.  It’s not just about how to make them money.

TraderDaily: Moving to Bear Stearns looks like it was the beginning of your transition to an institutional player. What are your feelings about the demise of Bear?

Gardner: It’s like watching the house you grew up in burn and there’s nothing you can do about it.  You know something?  When I sold my stock in Bear 22 years ago to start my own business, people told me I was nuts.  Turns out I got more money then than I would have when they got sold to JP Morgan.  And I’m still in business!

TraderDaily: What’s your take on the rise of high-frequency trading in the market? Does this rise take a positive or negative effect on the overall market?

Gardner: Technology has taken trading into a whole new space.  Financial firms are putting hundreds of millions of dollars into creating “The Terminator” – a machine that will take advantage of any arbitrage opportunities anywhere in the world in any asset, and in the blink of an eye.  And you can’t out-trade the Terminator, so don’t waste your time.  And let me tell you - right now someone is building an even bigger Terminator and soon we’re gonna be talking about ultra high-frequency trading.  But let’s recognize that there’s a difference between trading and investing.  Investing is taking a long term view – you’re in it for the long haul.  You’ve done your homework and decided these are companies you want to own.  You are comfortable with them. It’s a whole different space.

TraderDaily: You told Trader Monthly a few years ago that you were starting a private equity initiative in Africa. What is the status of that project now?

Gardner: Very, very close.  Can’t comment further right now.

TraderDaily: You have suggested that former commodities trader Marc Rich, who was pardoned by President Clinton, is a great inspiration to the financial community, and even named part of your firm in his honor. What is it that you admire about Marc?

Gardner: He was a poor, smart guy from the wrong side of the tracks who created his own opportunities.  No one gave him anything.  He had a vision and he realized it.

TraderDaily: What do you think will be the next huge debacle in finance?

Gardner: I believe it will be one of two things: commercial real estate or a total catastrophe in the student loan market.  Debt from student loans have become more than all the credit card debt in the country for the first time in history.  That’s staggering.  And guess what?  How are you gonna pay back that student loan if you don’t have a job?  It could sink a whole generation.

TraderDaily: What’s next? There’s already a movie and a book about you — is a reality TV show next?

Gardner: Stay tuned.  We’ll be right back after these messages…

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