Five Minutes With Walter Thomas (Tom) Price, III

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Five Minutes with Walter Thomas (Tom) Price, III

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Walter Thomas (Tom) Price, III wears many hats. He is chairman, president, CEO and sole shareholder of Price Futures Group, Inc. and Price Asset Management, Inc. He is also a principal investor in Uhlmann Price Securities, chief executive of Beeland Management Co., which manages investment products and accounts based upon the Rogers International Commodities Index (RICI). In addition, he is chairman, president, director and sole shareholder of Atrium Securities, Inc., a registered broker-dealer.

Price has been involved in the securities, cash commodities and commodity futures markets for more than 40 years as both a trader for his own account and as a broker. He is a graduate of the University of Texas and is also a licensed NASD principal and NFA principal. He sat down recently with MarketsWiki's Christine Marie Nielsen and explained how he's worked to discover value in areas of the market that have been largely untapped.

Q: Tell me a little about your background.

A: I grew up in Amarillo, Texas. We do have that Amarillo clock out there. Price is referring to one of the world clocks that hangs in the Price Group offices. Other clocks show local time in places including Paris, London and Frankfurt. I started out as a stock broker in 1962. Several years later I bought a farm and that turned into buying several other farms. Later on I bought into a feed yard and later built a feed yard. That was my first real experience in the commodities markets. I moved to Chicago in '78 and traded on the floor of the Chicago Mercantile Exchange. I came over to the Board of Trade as a partner with a firm - which eventually became LFG - until '88 at which time I formed the Price Group. There have been various iterations of the company as it has grown over the years. It's been a very interesting journey.


Q: What did you want to be when you were a little boy?

A: I really wanted to be a farmer. There was no one who had done that in my immediate family background. I found it was not the most lucrative way to make a living, but then I had been told by those older and wiser that it would be hard. It's just a very neat thing to be able to do what you had always wanted to do.


Q: Do you still do any farming now?

A: No you really need to run a farm from a farm and Chicago is pretty far from the Texas Panhandle.


Q: What would the adolescent Tom Price think of the Tom Price of today?

A: He would probably be happy that somewhere along the journey there was a chance to be a farmer.


Q: What products did you trade at the CME?

A: Livestock futures and some Eurodollars. They had just started the Eurodollar contract Price is referring to the CME's launch of Eurodollar futures in 1981. As I left the floor, then-chairman of the CME Leo Melamed asked if I had traded any Eurodollar futures and I said no. The second day, he asked again if I had traded Eurodollars. By the third day, I saw him standing at the door and I traded Eurodollars. I turned around and told him that yes I had. The Merc always promoted their products...in a very subtle way.


Q: Why did you start the Price Group?

A: Mainly to focus on a more narrow area of the more transactional hedging trades. That was basically it.


Q: And you had an eye toward alternative investments?

A: It was one of the iterations. As we've grown, as we saw the commissions structure come down, we made a decision. We made a decision that it would be a good idea for us to have product that involved commodities for our brokers to sell, rather than relying solely on the other transactional trade or hedge. That turned out to be a fairly enriched way of (doing business) for us. We developed our alternative trade upwards of about a billion dollars, or I guess you would say assets under management between the Uhlmann Price and Price Asset Management.

Price is also behind the business "Fund Dynamics," which operates out of the Price Group office. Professionals assist with compliance, regulation and accounting requirements. Price is president of Fund Dynamics. Allen Goodman, the CFO of Fund Dynamics, and Mark Stratton, who is responsible for software development for the firm, were also instrumental in its formation and establishment.

We've had a very unique culture within our firm. We allow our brokers to find their own comfort level within our firm. A good example would be John Lothian. I'm always impressed that when a person is truly passionate about something they tend to be able to surround themselves with good people and continue to grow it. It was even more impressive the day I realized that his newsletter had become a must read for a first read. It is very rewarding to see our people achieve in those areas that they are passionate about.


Q: Is it safe to say that the firm has met your expectations?

A: It certainly met my expectations and I am sure will probably exceed.


Q: How would you describe where it's headed?

A: Someone asked Wayne Gretzky once why they called him The Great One. He basically said, I really don't know, most people skate to the puck. I skate to where the puck will be. I think what we did four or five years ago was skate to where we thought the puck would be. Luckily the puck turned out to be there.

I think the direction we are moving in asset management and due diligence is an area that... institutional investors are looking for. We also attract very good clients on every scale and at every level.


Q: I notice a photo of dog on your desk?

A: When I married Nancy, Nancy had a dog. She said love me, love my dog. Now we have Bailey, another cockapoo. I find it very soothing to look over and see the photo.


Q: What is the most satisfying thing you've accomplished in your life?

A: Watching my children grow and be healthy and happy and successful (two girls and one boy who all live in Amarillo). They've all run in the Chicago Marathon. Most of the time it's us traveling down to Texas. Then from a career standpoint, watching the employees that have been with us for the last 10 or 12 years. It's been very satisfying.


Q: Where do you think the financial industry is headed?

A: It's really exciting where we are now. I think they are going to enact some major changes going forward. From the standpoint of markets or capital markets, there will always be in a free enterprise system a demand for financial services. The real demand will be for the financial services that have transparency, have liquidity and establish a price. The commodity markets, the futures markets have all of that. Price speculated that the U.S. is probably headed toward an inflationary period that could occur within 12 months of getting the housing situation under control.

John J. Lothian & Co., the producer of MarketsWiki, is based in the Price Futures Group, Inc. office at the Chicago Board of Trade building.