Unbeatable at gin rummy and a club golf champion.

Dreyfus no longer plays golf seriously but he still eases tensions by taking a few swings in front of the market ticker with a macelike practice device.

Knowing when to sell was just as vital. Dreyfus discovered that the most effective clue for the selling phase of his operation was an overabundance of optimism. “When everybody is bubbling with optimism and running around telling everybody else to buy, it means that everybody is already fully invested,” he explains. “At this point, all they can do is talk—and talk can’t push the market any higher. Only buying power can do that.”

In 1957, after four years of rising prices, Dreyfus suspected that Wall Street had reached just such a critical condition. He checked his intuition against timing devices he had adopted for this purpose—including statistics on customers’ debits and credits—and found the speculators to be dangerously overextended and devoid of buying power. Dreyfus took this as a signal to start selling. Once again his timing was perfect. When the plunge developed in October that year, driving down the Dow Jones industrial averages to the lowest level in two years, Dreyfus had cut back the fund to being only 43 percent invested in common stock. The rest of its assets were in cash and government bonds. Early the following year, when he felt that the atmosphere had cleared, he had the commonstock figure back up to 90 percent.

By that time the fund was six years old and it had grown from less than $1 million to $37 million (still small compared to its present size of $1.3 billion) and was causing a stir in The Street. Some rivals were accusing Dreyfus of “churning” (i.e., trading excessively at a high cost in brokerage commissions). “The industry was trying to build the image of a safe approach to investment,” one competitor pointed out. “He scared some rockribbed conservatives a bit.” They also accused Dreyfus of operating a “one-stock fund,” a charge which stemmed from the fund`s spectacular profits in Polaroid. The value of Polaroid shares is now 100 times what Dreyfus first paid for them. Actually the fund never had invested more than 5 percent of its assets in Polaroid, the maximum permitted.

The competition also cried that he was running a “one-man fund,” but this was so obvious that even Dreyfus never bothered to deny it. Although the fund had an investment committee, and at least two members of it were supposed to approve every transaction, Dreyfus ran the show. He was also the fund’s administrative head, its top salesman, its idea man, copywriter, artistic genius and general handyman. it was his idea to animate the lion and, in March 1958, to present the fund’s prospectus as a special 14-page supplement in the New York Sunday Times—a previously unheard-of way for attracting investors. In writing reports to his stockholders, Dreyfus leaned on the works of Mark Twain, which he knows almost by heart. “Twain had so much to say-about people, customs, clichés, hypocrisy,” he says. “He’s my favorite person.” Twain himself was a notoriously bad investor (frittering away fortunes on schemes like manufacturing circular hatpins). But Dreyfus relishes Twain’s grasp of basic economics. After one bad spell in the market Dreyfus began his report with a quotation from his idol: “October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April. November, May, March, June, December, August and February.”

Just about everything Dreyfus set about doing during this period had its special touch. At the office he kept two unusual specialists on the payroll—a gardener to tend the flowers that he insisted be grown on the premises and a psychiatrist to smooth over personality differences among partners and employees. “I can’t serve as a referee when egos clash,” he explained at the time. “It’s important in business that the atmosphere be peaceful and harmonious.” He hired his executives with the same disregard for convention. The man he picked as his chief assistant and understudy had been a serious student of the violin at the Juilliard School of Music. A former hotel man who had an easy way of handling people was made the fund’s sales manager. Dreyfus’ way of indoctrinating his key personnel into the appropriate orbit of thought was equally original. “We would have meetings in the park,” one of them recalled recently. “Everybody would sit around in a circle on the ground and Jack would have sandwiches sent over. Not that he would eat any. He conducted the meetings lying on a bench with his shoes off, dipping powdered Metrecal out of a can with a spoon. He said it was more peaceful and relaxing that way. And he would talk for hours about his philosophy of the market and how the fund should react to this situation or that.”

All this time, Dreyfus recalls, his secret dream at these meetings was to escape—to have no worries, no responsibilities. “If you’re lucky enough to be reasonably successful, your problems seem to multiply,” he says. About seven years ago Dreyfus’ problems seemed to him to be multiplying so rapidly that he could not keep up with them. Fearing that he was on the verge of a nervous breakdown, he started a conscious campaign to abandon all those pursuits which fed his passion for perfection. The first to go was golf. “In golf, a perfectionist allows himself no peace of mind,” he says. “He takes the good shots for granted and worries about the big ones.” Dreyfus also quit the bridge table and gave up gin rummy. But walking away from the fund was not so easy. It was one thing to swear off games; it was something else to abandon a fund with obligations to churches, hospitals, orphanages, colleges and fraternal groups—to say nothing of the hundreds of thousands of individual investors.

But from his bench in the park Dreyfus began teaching with a new, more intense purpose—to mold his successors so that someday he could get away. Bit by bit the teacher became less involved in the running of the fund. But he found he needed “counterirritants” to help him live with the one great irritant—the stock market. At the age of 46 Dreyfus took up tennis as a means of working off his tensions and, despite himself, became quite good at the game. He began frequenting the race tracks and, there too, everything he did turned up roses. His Hobeau Farm horses began to win more than their share of rich $100,000 purses. This soothed him. “It makes you feel like a little boy at Christmas,” he says.

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