Do You Sincerely Want to Be Rich? The Full

In the fall of 1955, Bernard Cornfeld arrived in Paris with scant money in his pocket and a tenuous relationship with a New York firm to sell mutual funds overseas. Cornfeld, a former psychologist and social worker, knew how to make friends fast and soon targeted two groups of people who could help him fulfill his economic ambitions: American expatriates who were looking to build their own fortunes and servicemen abroad who loved to live high-rolling lives and spend money. Using the first group as door-to-door salesmen and the second group as his gullible target, Cornfeld built a multi-billion-dollar and multi-national company, famous for its salesmen's winning one-line pitch: "Do you sincerely want to be rich?" In this eye-opening yet entertaining book, an award-winning "Insight" team of the LondonSunday Timesexamines Cornfeld's impressive scheme, a classic example of good, old-fashioned American business gumption and guile.

CHARLES RAW was financial editor of The Sunday Times (London) when this book was written. BRUCE PAGE, then executive features editor at The Sunday Times, was coauthor of two other bestselling "Insight" books. GODFREY HODGSON was a Washington correspondent for The Observer (London), where for two years he wrote the financial column "Mammon," and was foreign features editor of The Sunday Times. He also coauthored, with Page, American Melodrama: The Presidential Campaign of 1968.

Preface to the 2005 Edition

x

Acknowledgments

xxi

1. A Warning to Investors from Mr. Bernard Cornfeld

1

(16)

In which we introduce Bernard Cornfeld in the role of international economic statesman and give a preliminary statement of the real nature of Investors Overseas Services.

2. The Making of a Conceptual Salesman

17

(14)

In which we examine the political and psychological background of Bernard Cornfeld and the early growth of his talents.

3. The Financial Revolutionaries

31

(23)

The rise of the mutual-fund idea, and Bernard Cornfeld's early days as social worker and fund salesman. In which a young lawyer named Edward Cowett also learns about mutual funds.

4. The First Missionary Journeys

54

(27)

Paris, Geneva-and many other places, from Caracas to Cox's Bazar. How a sales force was mustered, a technique was refined, and young men learned how to "put their egos in their pockets." Some observations on Swiss banks.

5. Early Travels in the Offshore World

81

(13)

In which we explain the capital structure of a dream, and how Bernie and Ed kept the salesmen loyal to IOS. The birth of the first IOS fund and the Trust that was not a trust.

6. Ed Cowett's Problem

94

(18)

In which the learned co-author of Blue Sky Law tries his hand at promoting speculative companies, gets into deep financial trouble, and is helped out by Bernie Cornfeld.

7. The Birth of a Superfund

112

(17)

In which we examine the Fund of Funds, which is really a Gimmick of Gimmicks. How it worked to the advantage of its inventors, Ed and Bernie, and to the disadvantage of its investors.

8. The Jungle Jangle Jingle

129

(35)

The real sources of IOS's wealth. In which we crack some codes, uncover some clandestine financial arrangements, and make some calculations about hot money.

9. They May Be Schmucks, but They're the Government

164

(21)

The clash between IOS and the Securities and Exchange Commission. A Cuban lady skindiver enters the stockbroking business. We examine some other matters that IOS never told the customers about, and a deal that "scared the hell out of the SEC."

10. A Little Question in Switzerland

185

(11)

In which I0S nearly gets thrown out of Switzerland, the vital base. After sparring with the Swiss Bankers' Association, Bernie makes a tactical but precipitate withdrawal.

11. Pacem in Terris...and Good Will to All Men

196

(19)

Great efforts are made to improve the image of Investors Overseas Services. Eminent international citizens are brought into the company. They are carefully excluded from real power.

12. Reminiscences of the Court of the Emperor Cornfeld

215

(22)

In which Cornfeld gives some views of sexual codes, and several of his followers show how to suppress a scandal in the court. We examine the loyalties of Cornfeld's old friends.

13. The Off-White Cliffs of Dover

237

(17)

The boys find a way to beat the SEC-operating through the City of London. They go into the life-insurance business, and show the Bank of England a thing or two. In which it is shown how the Winston Churchill Close should be applied and generally how sales techniques became refined.

14. Germany: The Super-Super-Supermen

254

(24)

In which the sales force finds the last great market and, under the remarkable Eli Wallitt, becomes a kind of chain-letter game.

15. The Bella Figura of Harvey Felberbaum

278

(21)

In which we show that IOS's good resolutions about currency smuggling were not always kept. How IOS went into business with an interesting bank.

16. Good Evening, Comrade Prospect!

299

(14)

Before going on to see what they did with the customers' money, we look at some other markets: France, Scandinavia, Communist Europe. IOS is ready to assume almost any form and go almost any-where so long as the salesmen can still collect.

17. The Master Financiers

313

(37)

In which we investigate "the best investment advice $2 billion can buy." IOS and its stock-market speculations-stoking the flames of the conglomerate blaze. IOS goes into investment banking, which is bad luck for the customers.

18. A Very Long Way Offshore

350

(37)

In which respectable financiers strip off their watch chains and leap into the warm offshore waters. The techniques and consequences of IOS's competition; IOS, on the basis of a very curious prospectus, becomes a public corporation at long last.

19. John M. King: The Power of Natural Gas

387

(45)

In which we introduce Ambassador John M. King and describe an industry built on tax avoidance. Together with their new chum, our he-roes get mixed up in the Middle East crisis, hunting oil in Arab waters. Ed Cowett discovers the Arctic; NOPIs and other strange animals appear; Handley Page Aircraft becomes a casualty.

20. The Book of Revelations

432

(26)

The people who "sincerely wanted to be rich" are rich! A tally of millionaires and multimillionaires. Joel Mallin and the "lifetime system of tax deferral." Cowett buys some shares, and the money runs out at last.

21. The Feeling of the Meeting

458

(31)

How the minutes came to record that "Mr. Cornfeld voluntarily tendered his resignation."

22. Terminating Bernie

489

(19)

A great desire is manifested to "save IOS for capitalism." But the rescuers are afraid of Bernie, who isn't quite dead. An intrigue is mounted to dispose of the Emperor, who is rubbed out effectively if none too tidily.

23. The Customers' Yachts

508

(20)

In which we find that the IOS sales force remained conspiratorial above all. Allen Cantor discourses upon Truth, Responsibility, and the Little People. In which we examine the actual, as against the supposed, performance of IOS funds and figure out what happened to the customers' money.

24. A Game of Strategic Withdrawal

528

(15)

Bernie sells out and Ed Cowett plays backgammon. A young man gets on a train in Bangkok.

Index

543

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Do You Sincerely Want to Be Rich? The Full Story of Bernard Cornfeld and I.O.S.

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