Soviet Engineers
On Wall Street
CARL SCHRAG SPECIAL TO THE JEWISH NEWS
ary Pickholz is watching
two computer screens
filled with financial data,
and he's listening to the
morning traffic and weather re-
port.
He hears about a backup on the
Lincoln Tunnel and long delays
on the George Washington Bridge.
G
Losing your patience with teller lines?
It's almost the 21st century. So why are most banks still operating like
it's the 18th? The time you or your employees spend standing in
old-fashioned teller lines could be costing you thousands of dollars!
That's why Franklin Bank offers modern banking options like our
"Express Deposit" lockbox, courier deposit pickup and EDI electronic
deposits. They're all part of the Total Package of financial services for
small and medium-sized practices.
Come over to the new thinking in banking. Call Franklin Bank today at
(810) 358-5170 and start saving money!
Franklin
Bank
N.A.
= (810)358-5170
FDIC Insured
The new thinking in banking for business.
Southfield • Birmingham • Grosse Pointe Woods
STOCKS TAX-FREE'BONDS MUTUALFUNIPS
T
A
X
E
X
E
P
T
.N
C.r)
LL1
Cip
LLJ
T
T
U
S
First of Michigan
Corporation
Members New York Stock Exchange, Inc
FoM
A
INVESTMENTS
A
Herman Schwartz?
L
Senior Vice President - Investments
P
L
$25' Cold Storage*
NEXT TO THE BIRMINGHAM THEATRE
642-1690
A
6230 Orchard Lake Road, Suite 230
West Bloomfield, MI 48322
(810) 855-2100
1-800-654-1443
.
LLJ
36
Advertising in The Jewish News
Gets Results
Place Your Ad Today.
Call 354-6060
1.
THE BEST OF KNITTING
N
G
Anny Blatt • Tahki • Prism • Classic Elite
Trendsetter • Annabel Fox • Katia • Unique Kolours
Dyed In The Wool • Rowan & More!
6
`;
ti ti
S
TAX DEFERRED ANNUITIES IRA's MONEY MANAGEMENT
F-
LU
Cal
_
8
S
ti
S
•
ti
im in nit
29791 Northwestern Hwy. ti
Southfield, MI 48034
ti
(810) 355-1400
.
He hears that showers are ex-
pected, and that temperatures will
drop as the weekend approaches.
None of this information has
any impact on his personal life.
When Mr. Pickholz goes to work
each morning, he's more con-
cerned about the lights at Kikar
Zahal and the traffic flow on Re-
hov Hanevi'im than he is about
subway slowdowns and long
waits at toll booths. He catches
the New York radio reports from
his Jerusalem office. It's all part
of a sophisticated, costly com-
munications setup that lets him
boast: "From the moment you
step foot into this office, you're
not in Jerusalem. You're right at
the heart of Wall Street."
Mr. Pickholz is chief invest-
ment officer of Yield Enhance-
ment Strategists (YES), a
five-year-old New York-based Se-
curities & Exchange Commis-
sion-registered investment
management firm with branch-
es in strategic locations around
the globe. In addition to Bever-
ly Hills and London — places
where plenty of companies have
branches — YES has a busy off-
shore location in Jerusalem.
Mr. Pickholz's wife, Shira, is
the company's chairman. The
third partner is former U.S. Sen.
Robert Kasten Jr.
YES, which manages $150
million for institutional clients
(about 1 percent of the money
managed by the company be-
longs to a few wealthy individu-
als), has achieved some of the
highest returns in the industry,
as reflected by its high ranking
by industry monitor Nelson's.
We're not talking about dou-
ble-your-money-in-six-months
schemes.
We're not talking about the
high-flying gambles that many
people think constitute an in-
vestment strategy. YES doesn't
do that sort of thing. Its institu-
tional clients — including pen-
sion funds and public
corporations — would never be
able to justify taking such risks
with the money they safeguard.
What YES does is provide a sub-
stitute for money market funds,
i.e. virtually no risk, with a re-
turn that can only equal or bet-
ter what bank deposits offer.
The first quarter of 1995 was
YES's best-ever, and the past 12
months have been the company's
best 12-month period. In the first
three months of the year, YES
achieved an annualized return of
22 percent on the funds it man-
ages, while the 12-month figure
stands at 15 percent.
Mr. Pickholz notes that Cer-
tificates of Deposit (CDs) in U.S.
banks pay about 6 percent today,
and says, "To put it in perspec-
tive, we made just about triple
what the banks pay."
The company prides itself on
using some of the most advanced
risk- assessment software in the
industry to maximize returns on
Treasury bills and a variety of re-
lated safe financial instruments.
The software is all produced in-
house by a team of computer sci-
entists who used to work on
Soviet missile development pro-
jects. .
On a purely business
level, Jerusalem had
a lot to offer.
What do rocket engineers
know about Wall Street? And So-
viet rocket engineers, to boot?
The Pickholzes both laugh. Ex-
perience has shown that some-
one who can design a missile to
carry a nuclear warhead capable
of inflicting massive destruction
is ideally suited to design an in-
vestment strategy that can pre-
serve capital and achieve an
impressive return.
It's all a question of education
and application.
The Pickholzes' success with
scientists from the former Sovi-
et Union began in New York,
where they established YES af-
ter they both left successful ca-
reers with major Wall Street
institutions. Mrs. Pickholz had
worked with large institutional
portfolios at Banker's Trust, and
Mr. Pickholz had been a suc-
cessful trader at Drexel Burnham
Lambert, the high-profile bro-
kerage house that shut down in
the wake of the junk bond scan-
dal of the late 1980s.
The couple decided to go it
alone rather than stay in the tra-
ditional Wall Street framework,
and they hired a few Russian im-
inigrants who had moved to New
York. The scientists were math-
ematical geniuses who had ex-
perience in the Soviet military
development program, and they
knew absolutely nothing about
financial markets.