Art Pearson

HIGH SCHOOL

In '64 I transferred to CHS from a large high school (2000 students) in Illinois. It could have been culture shock, but it wasn't. For me it was a fortunate event, I went from being an anonymous number to being an integral part of a small group. As I reflect on my days at Clinton High School, I have fond memories. As an outsider and especially a Yankee, I was always treated with warmth and acceptance by the entire student body. The only ridicule I received was from Coach Lamont Echols, when he saw me throw a fast ball. And then of course there was the time Mr. Bunch tried to paddle me for no reason, simply because Tommy Bufkin told him I had never been paddled, (northern schools do not allow corporal punishment.). I have thought about the reasons for this unconditional acceptance, was it the way of the South, or just a small town school? I don't think so, I have concluded that it was just 100 unique and really nice folks that were all part of the class of '66. The feeling of self-confidence that I developed during that period has been a great asset through my life. Thanks to every one of you. We are all lucky to have had this shared experience. Since I have been so far away and have only had minor contact with any of you since leaving CHS I will pick up right after graduation.

'66- Ole Miss -Hung out with Peter Arbuthnot and Dave Garriga, saw very little of Betsy Barnett. Mostly had a good time didn't do much studying, learned every bend in the road to Holly Springs. Second year I flunked ROTC, decided I didn't want to take it over as a junior, I wasn't anti war; I just wasn't Gung Ho.

'68-Transferred to Univ. of Missouri in Kansas City, worked summers as a switchman on the Union Pacific R. R. Attended classes at night, worked days at the K.C. Board of Trade first as a runner then as a floor trader's clerk. Was far more intrigued by what I learned on the trading floor, then in the classroom.

'69-Very Lucky Year! Met and married the lovely Vicki R. Awarded number 366 in Draft Lottery.

'70-First son Arty IV was born.

'71- Graduated with a B.A. in Business Admin. from UMKC, immediately started my assault on Merrill Lynch & Co., six months latter I was hired as their youngest Stock Broker. Went to N.Y City for training program. Spent all my free time in the visitor's gallery of the New York Stock Exch.

In three years I opened 600 accounts, a record, unfortunately the market went from over 1000 in '71 to 500 in '73. I had only two accounts that had made money the rest were losers! I was disillusioned with the job. I was not an advisor, but a salesman.

'73- Another lucky year, my second son Christopher was born. That year the Chicago Board of Trade started the Chicago Board Option Exchange to trade options on stock. I spent a week of vacation in Chicago with the intention of finding out what kind of opportunity their was at the CBOE, during my visit I purchased a Membership on the new exchange, mostly based on what I had learned years earlier at the K.C. Board of Trade. When I returned I told my wife what I had done, we put our house up for sale, and bet everything we owned and could borrow on the future of the Exchange.

'74- A not so lucky year. Within 3 months I had lost most of my money speculating in stock options, I recovered then two months later I lost everything!

'75-Although I was failing, the exchange was prospering, I was able to borrow against the increased value of my membership, I took the money and used it to learn the technique of spread trading or option arbitrage. Some college professors had developed the first computer model for option pricing. I got the model and started using it to trade options. Instead of speculating on price direction, I knew what each option was theoretically worth; almost no one else had a clue. For the next 5 years I was able to identify and buy the cheap options and at the same time sell the over valued options, and of course with options there was huge financial leverage. It was absolutely INCREDIBLE; I never lost money trading again. It was like having the only flashlight in a mine filled with gold! When I think back to this period of my life it was as close to nirvana as one can get. I was in a constant state of "flow", but nothing lasts forever.

'76- Joined the Theatre of Western Springs, a local community theatre. Best roll was Bert Cates in "Inherit the Wind" also carried a lot of spears while wearing tights in some of Shakespeare's best plays. Coached Little League Baseball.

'80- By 1980 many others had discovered the option pricing model and it had become much harder to make money unless one was willing to take price direction risk. This was also the first year for stock takeovers, where one company would buy all the stock of another company. This wreaked havoc in the option pits because when a take over was announced the price of the target company would soar in price over night. I watched as several of my friends lost all they had made, in one day. Now all that leverage was working in reverse. The risk reward had changed and I knew it was time to look for something else to do. During this time my wife decided that she was dissatisfied with her life and decided to leave. She gave me custody of our 10 and 7-year-old sons and left to pursue her own dreams. It was actually much messier than that, but that was the ultimate outcome.

'81- was the most stressful year of my life, trying to run a household, keep tabs on two spirited boys, trade in a market that was very dangerous, and date. My old high school girlfriend, Ronnie Coleman even came up to spend a weekend. That was very interesting!

'82- A new start. I started trading options on commodities at the Chicago Mercantile Exch. Commodity options were new and most commodity traders had no idea how to price them, so for several years I was able to apply my trading techniques with great success in this market. I traded D-Mark, Cattle, and Pork Belly options. I also started a trading group with a partner and we taught young traders to trade for us, using our techniques. I was able to help several traders start successful careers. I also met the Beautiful and Lovely Linda, who you all met at our last reunion. We actually met through a computer dating service. Computers have definitely had a huge impact on my life.

'83- Linda and I and my two sons spent our honeymoon in England.

'84-'87 Spent a lot of time exploring the world mostly Europe and America's West Coast. "Retired" from floor trading in Sept.'87, one month before the Stock Market Crash.

'88- Oldest son Arty left to attend UCLA, I did some traveling, but mostly just hung around the house looking for something interesting to do

'89- Could not find anything to do that was as challenging as trading so I went back to floor trading.

'90- Arty was accepted into UCLA Film School.

'91- Youngest son Christopher left to attend NYU, I produced and directed a TV show on a local cable station for three seasons called Spotlight. We interviewed entertainers and artists that were performing in the suburbs of Chicago

'92-'93- Retired from floor trading for good, I was getting too slow, and it is truly a young person's game. Started trading from home with a longer-term perspective, the PC was finally powerful enough to make this a practical alternative. I also attempted to syndicate a national news feature called "You Be The Critic" a national movie poll, where in an exit poll the audience rated the film and we reported the results. The news paper version of this poll is still syndicated to many newspapers around the country. The TV version was not successful because we were unable to get into more than 60% of the national markets, and our sponsor, Jolly Time Pop Corn wanted complete coverage. Bought a grain farm in Iowa not far from the Mississippi River, with long term plan of retiring there to raise horses and live in the country. (Wife's plan actually). Son Arty joined a company that produces the theater trailers and TV commercials for all Disney Movies, as a writer/producer.

'94- Moved to Warrenville, IL. a far western suburb on the edge of development 27 miles west of Chicago, Joined the Big Brothers program, mentoring to a 12-year-old named John. Got into serious gardening, starting a collection of Hostas and Day Lilies, also planted 900 day lilies on Iowa farm with idea of starting a plant nursery. (They are still growing, haven't sold one plant yet).

I considered starting an Internet Service Provider business with a partner that was a computer wiz, ultimately decided not to pursue it because I thought AT&T or the local phone companies would start competing for that business very soon. Big mistake! (AOL was just a small operation at that time, and Bernie Ebers was just getting rolling in Jackson Miss. with what would become WorldCom)

'95- Started Alltest Professional Services, with two partners, a company that does mobile drug testing for truck drivers, government offices, and corporations. Produced a short film, "Committed" that my son Arty wrote and directed. In exchange for funding he gave me a small part, very small, it played at several film festivals but was not commercially successful. Son Christopher was hired by the investment banking firm J P Morgan & Co. in the merger and acquisitions dept.

'96- Co-wrote a book on my trading methods with the tentative title of Trading @ Home, that has yet to be published, and may not ever be, as my methods are too conservative for today's volatile markets where the average mutual fund rises 25% per year.

'98- Bought MAD Science, a business that brings hands-on science to children ages 5-12, We perform school assemblies, in-class workshops, after school enrichment programs and birthday parties.

The Present- I live on a beautiful piece of wooded property, bordering a large forest preserve with miles of trails. Linda and I share the space with two horses, a saddle-bred named Amber and an Arab called Wizard, 3 cats and one English Spaniel named Sunday. We are frequently visited by wild turkey, red tailed hawks, barn and screech owls, raccoons, possum, deer, and many species of songbirds.

For years I collected cars, I recently sold my last one, a classic '47 Lincoln Continental Convertible. Now I only collect only 43rd scale models of cars from the 50's and 60's, they are much easier to store and maintain.

I continue to trade stock from my home office and manage the two businesses that I am involved in.

I am a frequent visitor to the Library; I enjoy books on a variety of topics; Economics, Business, Biography, History, Psychology, Science, Motivational/Inspirational and occasionally mysteries and novels. I am also a big fan of books on tape, especially historical ones.

In the summer I enjoy swimming and cycling, in the winter I like x-country and downhill skiing, hiking and occasionally horseback riding.

I am into health food, no white flour, no refined sugar. I have been taking mega doses of vitamin C, E, B complex, A and D for at least 20 years. I recently have started taking St Johns Wort and DHEA with good results. I have enjoyed good health.

I follow politics closely, like Jessie the governor Ventura, Geo. Bush Jr. Bill Bradley, can't stand Bill and Hillary, was very disappointed by Gingrich, and have been mildly disappointed by Trent Lott; he has not done much.

When I have time for TV I watch PBS, History Channel, Discovery and A&E Biography.

My oldest son Arty lives in Marina Del Rey, Calif. A beach town near L.A. He writes and produces commercials, and is working on a script for a feature length movie that he plans to shoot next year. I am going to try for my 15 seconds of fame again, with a small part, that is, if I make a large enough investment. My son Chris is living in Hong Kong, working for J.P. Morgan, as an investment banker. I am planning a 3-week trip to Hong Kong, Beijing, and the island of Bali this November to visit and travel with him.