Every day is Veterans Day at Drexel Hamilton

Longtime Wall Streeter James Cahill's firm trains ex-military members for finance jobs

Mar 17, 2014 @ 12:50 pm

By Aaron Elstein

james cahill, drexel hamilton, salomon, lehman, bonds, fixed income, trading, broker, brokerage
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James Cahill, 76, is president of Drexel Hamilton, a brokerage firm that specializes in training military veterans for Wall Street jobs. A native of Manhattan's West Side and son of a longshoreman, Mr. Cahill joined Salomon Brothers in 1972 as a bond trader and became one of the firm's top salesmen. He later joined Lehman Brothers and eventually came out of retirement to help rebuild Keefe Bruyette & Woods after it was devastated in the 9/11 terrorist attacks. In 2011, he came out of retirement again to run Drexel Hamilton.

HOW'S BUSINESS GOING AT YOUR FIRM?

When I started, we had five or six employees, and today we have approximately 90, 40% of whom are combat veterans and 22 who were severely wounded. We underwrite and trade both bonds and stocks, and last year we had $12 million in revenue and a $1.2 million profit. It would have been more, except we're hiring lots of people.

ARE YOU A VETERAN?

No, I grew up between the Korean and Vietnam wars. I did lose a son on Sept. 11, and the way I think about it is our veterans have kept the bad guys away so people don't have to go through the hell experienced by the 3,000 families who lost loved ones in the World Trade Center. Veterans have kept us safe for 13 years, and when they return they need meaningful employment up to their capabilities in industries of every kind.

HOW WELL DO MEMBERS OF THE MILITARY TAKE TO WALL STREET?

They're used to waking up at 4 in the morning to go to work. I have an employee who showed up at the corporate treasurer's office in midtown six times but couldn't get a meeting. So one day he got up and told the treasurer's secretary, "I have an appointment for this afternoon, but I have to cancel it." The secretary said she'd tell the treasurer, who called a few hours later, and my guy said, "I'm being called back to Afghanistan soon and I'd like an opportunity to tell you what we do." And the treasurer said, "Come up this afternoon."

HOW DO YOU TEACH VETERANS TO WORK ON WALL STREET?

I train them to understand a client's business. You do that by reading everything you can and listening to them. If you make money for your clients, you'll make money too and you'll be around a long time. At our firm, no one except the support staff and some analysts get salaries. The rest of us work on commission.

AT YOUR AGE, ARE YOU STILL ACTIVELY INVOLVED IN RUNNING THE FIRM?

I sit out on the trading floor. John Gutfreund was out on the floor when he ran Salomon Brothers and knew everything that was going on. It was the same with Dick Fuld at Lehman. But the minute they moved to an office, they had to rely on other people and their firms got into trouble. I watched it happen.

WHAT DO YOU THINK OF MICHAEL LEWIS' BOOK ABOUT SALOMON, "LIAR'S POKER?"

There's a story in there in which a client got taken advantage of, and I remember passing on that deal. Everyone says they would never take advantage of a client, but the truth is, beforehand you don't know what you'd do. You have to wait for the stakes to be high enough, then you find out about your character.

IT SOUNDS LIKE YOU WANT YOUR NEW FIRM TO REPEAT THE BEST OF THE OLD SALOMON.

That's exactly what I want. Look, fancy schools have their place, and we need the best and brightest. But we also need people who have elevated themselves from nothing, like the old Salomon partners did. The skills in this business, I don't think you can learn in a textbook.

WHAT'S THE BIGGEST RISK IN THE MARKETPLACE THAT PEOPLE DON'T FULLY APPRECIATE?

I think interest rates are going to start rising in a few months as the economy improves, and we're going to get some inflation. A lot of investors, especially banks and insurance companies, have got a lot of long-term bonds in their portfolios. That's exactly what you don't want to have when rates are rising “It all comes down to investment performance,” he said.

Aaron Elstein is a senior reporter at sister publication Crain's New York Business

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