February 26, 2021

Howard Stein, Who Helped Teach Public to Invest, Dies at 84

The cause was complications of a stroke, his son-in-law Jamie Stokien said.

Mr. Stein was a powerful force in bringing stock and bond investment to the general public. He broadened the mutual fund market by flooding potential investors with direct mail, rather than using salesmen. He helped devise the famous Dreyfus television commercials in which a lion stalks out of a subway. He not only invented the first “no load” money market fund — meaning no upfront fee — but also created the first tax-free municipal bond fund. He was the first to sell an American mutual fund in Japan.

Mr. Stein was adept at picking investments, notably Polaroid in the company’s early days. His instinct to go for what he called “unloved” stocks and against market trends was legendary.

“People now realize that Howard is always a step ahead of the market,” Barton Biggs, chairman of Morgan Stanley Asset Management, told Crain’s New York Business in 1990.

When Mr. Stein joined Dreyfus as a young analyst in 1955, it had around $2 million in assets. At the time of its sale to the Mellon Bank Corporation in 1994, it had assets of $80 billion.

During the 1970s, Mr. Stein set up a fund to invest in companies that had shown unusual concern for the environment and for consumers. He recruited people from outside the conventional business world, like the journalist Bill Moyers, to join Dreyfus’s board. He invited provocative public figures like the feminist writer and editor Gloria Steinem to speak to directors and top executives and offer them new points of view: the Steinem session kept the mostly male group arguing until 1:30 a.m.

Mr. Stein himself was an early critic of the Vietnam War. In 1968 he took a six-month leave of absence to be chief fund-raiser for Senator Eugene J. McCarthy’s antiwar presidential campaign. He was on President Richard M. Nixon’s so-called enemies list. He worked with John Gardner in planning Common Cause, the citizens’ lobby group.

In 1988, Mr. Stein served on the Presidential Task Force on Market Mechanisms, known as the Brady Commission, which investigated the market crash of Oct. 19, 1987, or Black Monday.

Howard Mathew Stein was born in Brooklyn on Oct. 6, 1926, to immigrants from Poland. His family moved around New York, finally settling in an apartment over the Stage Delicatessen on Seventh Avenue in Manhattan. His parents, a brother and a sister worked in the garment industry. At 5, he began to play the violin. He was soon practicing for as many as 10 hours a day and planned to be a musician.

By his own account he pursued his formal education between encounters with truant officers. He attended the Straubenmuller Textile High School on Manhattan’s West Side and the Juilliard School, which gave him a scholarship. He gave up on a music career when he realized he was not destined to be a great violinist.

At 23, he got a job loading steel onto trucks for 75 cents an hour. “It was invigorating for three or four hours,” he said in an interview with The New York Times in 1982.

He looked for work on Wall Street and became a trainee at Bache Company, where he noticed that responses to sales brochures piled up unanswered while salesmen concentrated on person-to-person contacts. He contacted the writers of those responses and built up a rich commission business. He left Bache in 1955 because he didn’t believe he was rising fast enough, Time magazine said in a cover article about him in 1970.

He joined Dreyfus and soon became an assistant to Jack J. Dreyfus Jr., the firm’s founder, chief executive and chairman. He became president in 1965, and chairman and chief executive in 1970.

Mr. Stein’s record of sharp investing included buying New York City real estate at cheap prices during the city’s fiscal crisis in the 1970s. But he was roundly criticized in the ’80s and ’90s for holding back on buying stocks when the markets were surging. When Fortune magazine asked him about this in 1996, he replied, perhaps jocularly: “I was stupid! I wasn’t paying attention.”

In fact, his conviction that stocks were overvalued saved him from the devastation many of his competitors experienced in the 1987 crash.

In 1994, the Mellon Bank Corporation of Pittsburgh acquired Dreyfus in a stock swap valued at $1.85 billion. Mr. Stein continued as Dreyfus’s chairman and chief executive, joined Mellon’s board and was reported to have made around $90 million personally from the deal. He resigned in 1996.

Mr. Stein is survived by his wife, the former Janet Gelder; his daughters, Julia Stokien, Jocelyn Hayes, Jessica Levine, Joanna Stein and Jennifer Seay; and six grandchildren.

A former employee of Mr. Stein’s gave Fortune an example of how Mr. Stein’s thinking strayed from the beaten path. Years earlier, Dreyfus was heavily invested in enterprises owned by the reclusive tycoon J. Paul Getty, some of which were looking shaky. When Mr. Stein suggested that this employee speak with Mr. Getty, the employee replied that “nobody” talks to Mr. Getty.

“Well, have you tried?” Mr. Stein asked. A week later, the employee was in Rome, where Mr. Getty answered all of Mr. Stein’s questions.

Article source: http://feeds.nytimes.com/click.phdo?i=9dd61caad875772f3287e6a385325b3c

Speak Your Mind