When real-life "Wolf of Wall Street" Jordan Belfort first arrived on Wall Street, in his mind echoed the self-serving message of Gordon Gekko, the cutthroat, stock-trading lead character in Oliver Stone's cinematic drama: "Greed is good."
A few decades and a lot of hard-won wisdom later, he's adopted a much different mantra.
"Greed is not good," he told an audience of thousands Monday morning during his keynote speech at RIMS 2014′s general session, in a packed banquet hall at the Colorado Convention Center. "Passion is good. Ambition is good. Success without ethics and morality is not success. It's failure."
Belfort delivered a 45-minute recap of his life, career and the lessons he's learned throughout his well-publicized fall from grace after years–and millions–he spent living the high life as head of Stratton Oakmont, the brokerage firm with which he took more than 20 companies public and he amassed a personal fortune well into the hundreds of millions. His journey was the basis for a best-selling book, of which he's particularly proud, and the Oscar-nominated Martin Scorcese film that it spawned, "The Wolf of Wall Street."
Speaking before an audience comprised of thousands of risk professionals, Belfort recalled using his own risk-management skills in everything from running his own early businesses–with mixed success–and later to greater advantage as head of Stratton Oakmont, to monitoring his own mixed intake of prescription and not-so-prescription drugs.
RIMS 2014′s keynote speaker recalled his '80s brokerage firm days during which Stratton Oakmont would sell stocks to clients, who in those days had seven days to pay for them; if the price of the stock dropped before the buyer paid, the brokerage was on the hook for the money lost, which was usually a sizable sum. This happened to him on two separate occasions, he recalled: "I was constantly trying to manage against getting the knockout blow."
Over time, Belfort made a lot of people rich, including himself. But as things heated up and he and his partners developed a taste for living large and adjusting–and ultimately ignoring–their own moral compasses, he said, "Things began to spiral out of control."
Embracing a bad risk strategy, he said, "I ran out of good things to sell. I could not keep up in manufacturing good deals," and turned to illegal practices he now regrets that ultimately led to his downfall. If he'd stayed on the right side of the law, he admitted, "I'd be worth $10 billion now. That's the sad part."
Belfort touted his "Straight Line" selling system, which he offered at half-price to RIMS attendees. This method of selling entails three steps in making the sale: loving the product, making a trusting connection with the salesperson, and making a trusting connection between the person to whom you're selling and the product.
His tales of learning how to sell effectively–"cracking the code," as he repeatedly called it–resonated with the risk management audience particularly when he touched on a key element of closing the deal: At the end of every sale, he said, there's one question the person you're trying to sell to asks themself: "What's the worst that could possibly happen?" The way in which the customer calculates those best- and worst-case scenarios ultimately determines whether they'll buy or not.
Mastering the art of ethical persuasion and communication, he said, is "the single cornerstone skill you've got to have" in business, regardless of industry. That ability, Belfort noted, enables you to share ideas and concepts to maximum effect.
Belfort also appealed to his audience by addressing the implosion of the mortgage industry, in which he did business and at its height he said he saw little to no common sense being employed in the underwriting. Over-reliance on models and not taking a holistic view, he added, was largely to blame for the failure of myriad U.S. lenders.
The "Wolf" revealed that he's launching a U.S. tour of appearances, during which he hopes to raise $40-$50 million that he pledged to use exclusively to pay back the investors that he wronged. (His fee for speaking at RIMS, Executive Director Mary Roth noted, was likewise being used for restitution.) And whether he's selling a book, an event ticket or just sharing the benefit of his experience, Belfort these days follows one personal guideline that he says has served him well.
"If I get one dollar from somebody, I try to give them $10 in value," he told the RIMS audience–a mantra that many a risk manager could appreciate.
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