Mogul Moments

By Daniel Kadlec

Hugh McColl, the CEO of Bank of America, once fired an executive because the guy smoked a pipe at work. "I figured anybody who had enough time to mess with pipes had too slow a metabolism for me," he explains. O.K., he's not exactly a softy. But McColl's ability to acquire and absorb one large bank after another can teach us a thing or two about teamwork: "We are people who believe in disagreeing sharply...But when we leave the room...we are in lockstep... Support the team, or you're out."

In the 14 years that I've spent chronicling Wall Street, and the foibles and traits of characters like McColl, I've learned a lot about how fortunes are made. For McColl, a no-nonsense work ethic and drop-dead loyalty to trusted managers have transformed him from small-town banker to first-class sensation. Sandy Weill, co-CEO of Citigroup, earned riches by seizing out-of-favor companies when, he says, they "look like a disaster to someone else but like an opportunity to [me]."

Executives like McColl and moguls like Weill operate in rarefied circles. But much of what they practice can apply to everyday investors and business people. In my book, Masters of the Universe: Winning Strategies of America's Greatest Deal Makers (HarperCollins), I've tried to capture key philosophies of 10 Wall Street superstars who have a collective net worth of $12 billion. They must know something, right?

My most searing impressions from many hours of big-shot interviews are that persistence pays, and that the toughest part of any important decision is overcoming the omnipresent skeptics. There's simply no substitute for believing in what you do. Still, I found it strangely heartening to learn that billionaire investors face the same nagging questions as any novice buying 100 shares of America Online. Here are some lessons to draw from Masters:

--Value investing still works. "I like to look at asset plays, stuff that makes sense no matter which way the market goes," says Carl Icahn, one of the few '80s raiders still plying that trade. Buying stocks with low multiples of earnings is out of fashion in today's Internet market. But that's where the long-term values lie.

--Don't be a pig. "The best kind of deal is one that works out well for both sides," says Sumner Redstone, CEO of Viacom. AutoNation chairman H. Wayne Huizenga says, "You never know when you'll find yourself sitting across the negotiating table from that person again." In market terms: Forget the last fraction. Pigs get slaughtered.

--Early bird gets the return. "You make money by changing the rules and being there first," says Henry Silverman, CEO of Cendant. Not everyone has such clout. But by using special knowledge of your job or hobby you can spot a trend early.

--What you buy is more important than what you pay. "You buy the wrong business at 25% less than you should, and you take a little longer to go broke," says buyout artist Ted Forstmann. "You buy the right business at 25% more than you should, and you make five times your money instead of six."

--No risk, no reward. "You have to be in the game to win," says Gary Wilson, whose daring buyout of Northwest Airlines nearly ruined him before minting him a fortune. That's about as basic as it gets--and the chief argument for owning stocks.

See time.com/personal for more on Dan's book, in stores this week. And see him on CNNfn Tuesdays at 12:45 p.m. E.T.