Hollywood Boulevard may be worlds away from Wall Street, but making movies and managing money share many traits, believes Jim Glickenhaus, who has given up a 20-year-career writing, directing and producing movies to become a general partner in the family money management business, Glickenhaus & Co., New York.
"They are both businesses. They both have to be capitalized," Mr. Glickenhaus said in a recent interview. "You're manufacturing a product in each case. And you want to market it for as little money as possible."
Despite his career move, Mr. Glickenhaus, 47, has not replaced his long hair and Hollywood-casual shirts for a short cut and Wall Street's Brooks Brothers uniform. But looks aren't everything. When he discusses investment strategies and favorite stock picks, he sounds like a sharp money manager, not a film-maker.
Mr. Glickenhaus, now a portfolio manager overseeing $500 million, is the son of legendary money manager Seth Glickenhaus, who at 83 is still running the business he started 61 years ago. The firm currently has $5.2 billion under management, $3.7 billion of that in tax-exempt portfolios.
"My father has no plans to retire. He's in great health, works fuller days than I do, and he can still beat me at tennis," Mr. Glickenhaus emphasized.
Nevertheless, in January he changed his status from limited partner to general partner in preparation for the day when he will likely take over.
As a teenager, he worked with his dad in the summer, helping to enter orders for stocks on index cards before the computer era, he recalled. And even while ensconced in his film career, he participated in joint ventures with his father: building a $100 million 93-home development in Chappaqua, New York, and raising money to produce his films.
"My entire life, I was involved in learning what's happening on Wall Street," said Mr. Glickenhaus.
He quit the movies primarily, he explained, because it was becoming too difficult for independents like him to get films made from New York, and he didn't care to raise his two children in Los Angeles.
"Making movies is a tough business today," he said. "Managing money is a much better business. The true rate of return on most movies after costs is almost nothing."
This year, Glickenhaus portfolios are up 24.2% through Aug. 31, compared with the Standard & Poor's 500, up 22.9% for the period, he said.
Most of Mr. Glickenhaus' films failed to become major hits, he admitted. "The Protector," "The Exterminator," "Shakedown" were among his better known titles.
When he decided to change careers, he approached his father about joining the firm. The elder Glickenhaus agonized a few weeks before agreeing, because he worried whether his son would fit in.
"But it has worked out beautifully," the elder Mr. Glickenhaus said. "The associates are relieved that the firm will have longevity, and Jimmy has been extremely successful, one of our top performers this year. In addition, he loves money management and he has an enormous aptitude for it."
Seth Glickenhaus always talked to his son about stocks through the years, but the two men take different approaches.
"I look at them from a mathematical viewpoint, and add up the numbers. Jimmy looks more at the fundamentals of a company, what they do, what their prospects are," Seth Glickenhaus said.
In his new post, Jim Glickenhaus chose not to have his own office, preferring to sit in the trading room.
At Glickenhaus, the money managers all use a basic strategy of buying stocks when they are beaten down. Last month, for example, Jim Glickenhaus bought Eastman Kodak Co. Inc. after the stock fell to 56 from 70 in reaction to an announcement operating earnings for 1997 might fall as much as 25% below those of 1996. Mr. Glickenhaus sold the stock two weeks later when it rallied to 65, making a 16% profit. Buying when a stock is out of favor also served him well with Micron Technology Inc., which makes the D-RAM (Dynamic Random Access Memory) chips used in computers.
A year and a half ago, the stock skidded to 165/8 from 93, and he bought at 17, because the fundamentals were still good and the company was getting its costs under control. It's been trading in the mid-30s, but has great upside potential, because just about everything manufactured these days requires these chips, from cars to microwave ovens, he said.
But the strategy has backfired, too. "We've lost billions, but overall, we've made much more than we lost," said the younger Mr. Glickenhaus. In July, when the government widened its investigation of Columbia/RCA Health Care Corp. for Medicare fraud, he took a position after the stock sold off, expecting the share price would rebound. Instead, there have been new probes, indictments and lawsuits, sending the stock further south. However, Mr. Glickenhaus still believes it could turn around.
Other favorite picks which have been performing well include Continental Airlines Inc., Texas Instruments, Chrysler Corp.,and oil drilling stocks such as Global Marine Inc., and Noble Drilling Corp.
The Glickenhaus credo also involves getting to know the companies it owns on all levels from management to employees; and having the discipline to sell a stock at a pre-set target price, unless there is a strong reason to believe that its market is expanding.
The hardest part of the business for Mr. Glickenhaus is sifting through the incredible amount of data that comes across his desk. There's also a lot of pressure, because he wants to be sure the money will be there for participants in the pension plans he's overseeing for clients.
"I want those hourly workers to get the money due them," he said.