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Commencement remarks by Richard Schaeffer,
chairman, New York Mercantile Exchange, Inc., at the
University of Maryland Robert H. Smith School of
Business, December 21, 2006.
It is an honor and, I must say, a thrill for me to stand on this
platform today.
A number of years ago, I was sitting in the audience where
you are, a newly minted college graduate, unsure of what I wanted
to do with my life. I could not envision that I would be standing up
here one day, coming back as a businessman to address the
graduating business students at my university.
All of us at some point have thought of what we might like to
do – our dream job so to speak. While those wishes often don’t
pan out, things often work out better than you might think.
Take the case of Dwight Eisenhower. He used to tell the
story of when he was a small boy growing up in Kansas, how he
and a friend went fishing one day. Eisenhower said:
“As we sat there in the warmth of a summer afternoon
on a riverbank we talked about what we wanted to do when
we grew up. I told him that I wanted to be a major-league
baseball player, a genuine professional like Honus Wagner.
My friend said that he'd like to be President of the United
States. Neither one of us got our wish."
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Some of you may have jobs lined up already, or are making
the rounds of your target companies, or are still scanning the helpwanted ads on line or in the newspaper. Some of you, despite
having let your imagination run when you were younger, at this
point have no idea what you really want to do or even what type of
position you should look for.
Don’t be discouraged. For many of you, an unexpected
opportunity will come along – which might not even be recognized
at the time – and you will fall into a position that leads to
something that you love to do.
Sometimes, the process can take several years.
I graduated with a degree in accounting, and like most of the
accounting majors who I knew, it was practically ordained that I
would become an accountant.
Which I did.
And I was not happy. Accounting was just not a good fit for
me. This is not to be negative about the profession but, in my case,
it just didn’t take – just as some people find out after the fact that
law, medicine, banking, or journalism is not their cup of tea. After
being an accountant for a few years, I tried my hand in the music
business.
That wasn’t so great either.
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At the time, in the early 1980s, I was sharing an apartment in
New York with a friend who was a commodities trader on the New
York Mercantile Exchange. NYMEX was one of the smaller
exchanges that had made a name for itself in the markets for
potatoes and platinum, and had recently launched energy futures
trading on Wall Street – to the considerable skepticism of both the
oil and financial services industries.
My friend suggested that I come down to what was then
known as the Commodity Exchange Center located at the World
Trade Center to see how I might like it.
This is where I flourished at the age of 31. The pace of the
trading floor and the volatility of the market, coupled with my
accountant’s head for numbers was the match that I had been
looking for.
After a few months of trading for my own account – also
known as speculating – I found my calling. I teamed up with a
floor broker who had just left his position with one of the Wall
Street houses to go out on his own. It became evident to me that
the real opportunity lay in building a business in the financial
energy markets, then in their infancy. This involved finding
customers – and building the business relationships necessary to
hold on to them.
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My partner and I had to learn on the job as we went along.
We had to understand the dynamics of the energy futures markets
which were rapidly growing. The Exchange was cranking out
ground-breaking financial instruments, including the crude oil
futures contract which is now one of the pricing benchmarks of the
world energy market. These new instruments were designed to
meet the financial and risk management needs of an industry that
had just been released from a decade of price controls.
After about seven or eight years on the trading floor, I went
to work for a large firm, a futures commission merchant called
Chicago Corporation that had a huge presence on the agricultural
and financial futures markets of the big Chicago exchanges, and
was trying to build an energy futures practice in New York.
Chicago Corporation was later acquired by ABN Amro, an
international banking giant, which eventually bought out the
energy futures business of Merrill Lynch. At the same time, as
NYMEX grew to be the third largest futures exchange in the
United States and the premier forum for trading energy, I became
deeply involved in Exchange affairs and governance. I served on
the board of directors for a total of 16 years, including 11 years as
treasurer and two years as vice chairman. In March, I was elected
chairman of NYMEX and helped bring to fruition two years of
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hard work that last month led to one of the most successful IPO
listings on the New York Stock Exchange.
The completion of the IPO is just the beginning of the task
facing our executive team. Technological and competitive
challenges are sweeping the financial services industry. I know
that I work in one of its most dynamic and challenging sectors.
The broad issues that we face – such as foreign competition and
market automation – are likely confronting almost anyone who is
in business today.
So, that first job may not be just what you are looking for and
it may not even be particularly satisfying, but while you are there
do the very best that you can and soak up as much real-world
knowledge as you are able – about your industry, your markets,
and good business practices.
Go a step further. Give back to your profession and your
community. Once you land a job, you will meet experienced
people who will act as your mentors, helping you learn your craft.
You will also meet people who are accomplished in their fields
who will take the time to guide you, essentially going out of their
way to give you an education that money can’t buy – sorry, Dean
Frank. I am sure that I would not have survived on the trading
floor for very long if more seasoned brokers hadn’t pointed out my
mistakes and offered suggestions on improving my trading.
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Once you’ve gained some knowledge and confidence in what
you are doing, make sure that you do the same for other
newcomers just entering the field.
Also, give back to your community. It’s important. At the
New York Mercantile Exchange we frequently hold fundraisers
called Dress-Down Days. The dress code is relaxed for the day
and trading floor personnel and other members and staff are
allowed to wear jeans in return for a voluntary contribution at the
door as they come in to work. We typically collect between
$20,000 and $60,000 in about two hours for causes ranging from
tsunami relief to long-planned national campaigns for cancer
research to a quickly organized fundraiser for the families of
firemen killed in the line of duty during the previous week. The
participation by members of the Exchange community ranges from
contributing substantial sums to manning the collection basket at
the door.
You don’t need to be able to organize a company-wide
campaign, have much experience, or even a lot of money to lend a
hand where it might be needed. There are thousands of reputable
organizations that are dedicated to worthwhile causes, or you can
just volunteer on your own at a hospital, with a Scout troop, or
youth program.
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It is not only immensely rewarding in a spiritual way but,
believe me, the assistance is greatly appreciated.
Whatever you set out to do as you leave this hall today,
above all, do not get discouraged. What you are looking for is out
there, waiting for you. It just might take a while to find it.
Dean Frank and his team have given you a great start. I
thank the University of Maryland for giving me the knowledge and
strength to become a leader in the business community.
Stay focused. You will succeed.
Thank you.