On early mornings in Minneapolis, a young boy got his first lesson in profit margins--a lesson that he would one day repay as a wealthy Bradbury businessman.
At 5 a.m., the boy used to load his sled with Minneapolis Star newspapers. Sometimes it was so cold that his icy fingers could not work to close his buttons. He also collected payments--45 cents a month per delivery, of which he kept 22 cents.
Sixty years later, Robert Kommerstad made the front page of the newspaper he used to deliver. Kommerstad, founder and chairman of Provident Investment Counsel in Pasadena, has donated $100,000 to his old high school. The money will be invested in the stock market by students in a business class starting this month. Any profit they earn will go into a scholarship fund for the school.
"I couldn't believe it," said 17-year-old Molly Kennedy, a junior at Minneapolis South High School. "When you figure, 'Oh, wow, we have $100,000 to invest. . . .' It's just a random act of kindness. It's mind-boggling."
Her teacher, Rich Kormanik, 52, said: "It scares me more than the students."
Kommerstad, whose company manages $15 billion in securities, wants students at South High School to understand the value of money the way he did at an early age. Moreover, Kommerstad wants to give back to his hometown.
"The name South High--that has meaning to me," said Kommerstad, who graduated in 1944 and gives his age as sixty-something. "That was part of my life . . . I just feel a warmness about it."
At South High, Kommerstad got varsity letters in football, basketball and baseball. He made lifelong friends there. He still remembers his senior prom, when he crashed his brother's 1941 Ford into a tree after nodding off for a second. (He worked part-time in a warehouse loading trucks--at $1 an hour--to pay his brother back.)
And he remembers the English teacher who took him aside and told him he really should think about college.
No one else in his family had gone to college. When Kommerstad was 10, his father, who ran a home delivery dairy business, died of colon cancer. His mother, who had an eighth-grade education, was a cook. His older brother had quit high school.
Eventually, Kommerstad went to college and law school in Minnesota, and then became interested in finance.
In 1963, he and a partner opened Provident Investment Counsel. His income that year was $12,000.
The company grew steadily. In 1986 and 1987, as a community service, Provident donated $250,000 each to business classes at USC and UCLA so students could learn how to manage a portfolio. Since then, each fund has made about $1 million total, Kommerstad said.
In 1993, when Kommerstad returned to South High School for its 100th birthday celebration, he talked to administrators about whether a similar student investment program would work there. He worked with them to set up investment guidelines, and in December, at a school assembly, announced that he would make a personal gift--unlike the ones at USC and UCLA, which came from his company.
"This is very rewarding, to be in a position to do that," Kommerstad said on a recent afternoon in his office. "I got as much enjoyment out of this as anyone else."
He declines to give his net worth but said the donation isn't enough for him to feel it. He also says that if the program is successful he would consider giving more.
South High's 12-week business class includes 20 juniors and seniors who meet each day for an hour. During the school year, four different classes will each invest $25,000. A local investment company has volunteered to advise students and handle stock transactions at no fee. According to guidelines set up by Kommerstad and school officials, 75% of the investments will be made in local and regional companies. Students will break into small groups and discuss selected companies before deciding where they want to invest.
The responsibility to make--or lose money--for scholarships is daunting, Kennedy said. "We take it a lot more seriously--it's not just for fun," she said. "It's for our future." Kommerstad, who is married and has one grown daughter, isn't worried. He just wants students to learn, the way he did when he started out trying to juggle paying and non-paying newspaper accounts.
"You have to start somewhere, right?" he said with a chuckle. "And sooner or later you make it."