THE PIVOT

The Story of Ray Markman-Part 12

Friday, 4:40 pm

I’m winding up my own conclusions about Ray Markman’s bold assertion that he never worked a day in his life. At the same time, Loop Lonagan’s big boxing match with Alexander Harbinger is getting close. I don’t know how you feel, personally about the sad spectacle of a friend beating up on another friend—in cold blood in a rule-based arena—but I plan to be there to enjoy every second of it.

Lonagan’s feet rest on my desk. The guy seems entirely oblivious to the impending match.

“Okay,” I say, “I’ve got some stuff that needs saying. At this point, Ray’s outa the video business, on the loose, trying to decide what he wants to do and he tries a bunch of things: He teaches marketing at Northwestern and NYU. helps edit the classic book, DIRECT MARKETING by Edward L. Nash and writes the chapter on broadcast advertising.

“He gives a series of speeches to the Direct Marketing Association.  Then he gets a call from the US Secretary of Commerce. ‘Will you give that speech around the country? We’ll program it, pay your fare, provide a publicist for you at all times and we’ll pick the venues.’ He does that for two years and winds up with a personal commendation from the president.”

Lonagan looks at me slantwise. “So he’s right back on duh road? You gotta be puttin’ that outa sequence.”

“Maybe—but it happened and there’s more to it.

“Ray and his partner start doing town hall meetings to make people aware of economic issues. They start a company called FACT with 15 congressmen and senators—luminaries at the time. They support him and lend their names to it. When he begins his fundraising, a $500K donor asks him to come to New York first. ‘I’ll introduce you to some folks,’ he says.

“Ray gets to New York and guess what.  This guy’s got a duplex overlooking the UN building. He walks Ray across the street and introduces him to the NFIB, the National Federation of Independent Businessmsn, an organization of a million conservative thinkers and businessmen. Then all of a sudden it’s, ‘Ronny, I want to introduce Ray Markman.’ And it’s Ronald Reagan. This is before he’s president. And Reagan gives a speech. He says everything Ray wants to say and more and Ray’s thinking, ‘They don’t need us. If he gets elected, he’ll have millions of dollars of public money and we have to raise ours privately. He’s gonna do it from the stump.’

“So Ray gets out of public life because Reagan is doing the job for him. And Ray appreciates it, too.” I read the quote out loud: ‘He was terrific. The country was in a depression and he got us out of it. That’s when Meryll Lynch started running the ad: We’re Bullish on America. It was because of Reagan.’

Lonagan takes his feet off my desk and looks at me hard. “We done with all the do-good stuff? Good. Soes a friend—one of them five guys worked with him on his first companies—this guy’s a general agent in the insurance business—real successful. He says to Ray, ‘Why don’t we start a wealth management company?’ He’ll do the insurance and Ray’ll do the investing.

“So Ray takes his Series 7. He says, ‘Toughest test I ever took in my life. Six hours. A lotta work. But I passed the first time luckily somehow.’  Hell, I took my Series 7 and I’m here to tell yuh it’s tough.  Ray’s just bein’ modest when he says he got lucky passing it duh first time.”

Lonagan leans back in his chair. “So they hang out their shingle and start what he calls the Financial Life Planning Company.

“Of course, he’s lookin’ for investors to get started. And he starts with friends like everybody does. They’d say stuff like, ‘We got Meryll Lynch. But you’re a good friend. Howsabout $25,000?’” (I love the whiny voice Loop uses in his parody of a reluctant client.)  “Hey–truth is, Ray’ll take 25 cents! He ain’t got no business yet.”

Lonagan grins. “So he takes this course at duh University of Chicago in modern portfolio theory. He learns duh same stuff we all learn in that line o’ work—stuff outsiders don’t know about. Basically, it’s as simple as this: If you add a few non-correlated assets like real estate or commodities to a portfolio o’ stocks ‘n’ bonds, you make out real good. You increase return ‘n’ lower duh risk! That is, if you do it right. They plot it on a fancy curve called the ‘Efficient Frontier.’ But Ray goes at it a different way. Uses modern portfolio theory by investing in startups. And he builds a substantial business that way.

“But after a while, regulations change and broker dealers get even greedier. They want him to sell their own stuff exclusive. REITS, limited partnerships—boring kinda stuff—not the big returns he gets on startup companies.”

He pours more scotch. “So about that time, Ray and Len Bland start showcasing and funding startup companies. After some time, they build what I call a storefront. Startups come to them. They got a regular vetting process in place. They can pick the best companies outa the bunch. Meanwhile, they’re all comfy in their air-conditioned store, looking out their storefront window at all duh other consultants sweatin’ at duh curb, holdin’ out their tin cups fer work. And if it’s cold, Ray just turns up the thermostat.”

“So why shouldn’t they start a venture capital fund and pick the best companies they know? Just stands to reason. Ray comes up with the name ‘Renaissance.’”

“Here’s what Ray says.”  Loop reads from his notepad out loud: “’I had a partner helping me raise money. A terrific young guy—and he was a serial entrepreneur himself. He and I were working on projects. He was in Indianapolis. I said, ‘I’d love for you to join us.’ So he comes to Chicago and I introduce him to Len. Everybody likes everybody else. He has a lot of contacts and begins bringing people in. Pretty soon we’ve got a guy in Columbus Ohio, in Cleveland, three guys in Indianapolis which by the way is a real hotbed. Now we’re in eight states. And that’s the way this will happen.’”

“Hey Loop, look at the time. Better get your sorry ass over to the club or you’ll lose that boxing match by default.”

He glances at his smartphone and leaps to his feet. “I’ll get a cab. Split da fare with yuh.”

I nod in the affirmative. But how can a guy with that much money be so cheap?

And on the ride over, I make up my mind. After all the research and all the arguments back and forth, I believe what Ray said. I believe it when he claims he never worked a day in his life. And I like the way he put it: ‘I loved what I did. To me working was the greatest things in the world. I still average twelve hours a day. I never felt I worked a day in my life.’

My cell phone rings. It’s Bill Blaire placing a bet on Harbinger. $10K. He must be crazy. No way Harbinger wins this fight.  I take the bet.

Go to Part 13 – The Big Match

Go back to Part 1

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