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Page 1: THURSDAY, FEBRUARY 26, 2009 LEADERS & SUCCESS His School ... · In 1997, the market-beat-ing money manager invest-edhisowncashtoopenthe MilwaukeeCollegePrepara-tory School (MCPS).

B Y D A V I D S A I T O - C H U N GFOR INVESTOR'S BUSINESS DAILY

How do you inspire inner-city children to excel atschool?

Ron Sadoff answers thisway: Teach children to setgoals. Give the pupils posi-tive feedback.

In 1997, the market-beat-ing money manager invest-ed his own cash to open theMilwaukeeCollegePrepara-tory School (MCPS). Hehoped that kids from someof the poorest neighbor-hoods would rise to becomeacademicstars.

Sadoff picked one toughplace to realize such adream. When theK-through-eighth gradeschool opened that fall of’97, the high school gradua-tion rate among the city’surbanblackswas43.7%.Sin-gle parents ran three out offour Milwaukee urbanblack homes.

Sadoff and Principal Rob-ert Rauh knew that pupilconfidence would be low.So from the first day, theyhad every teacher tell thechildren how nice theylooked in school uniformsand how smart they were.

The kids didn’t buy it. Noone raised their hands.Most of them stared at thefloor. “After the first week,we scratched our headsandthought, ‘Could wecon-tinue?’ ” Sadoff told IBD.“We kept trying. By thethird week, the kids madeeye contact with theirteachers. Then they

smiled. They started rais-ing their hands. After threeweeks,we feltwe could suc-ceed.”

They were right. Dubbedby a magazine the “Miracleon 36th Street,” MCPSboasts solid numbers. Itsalumni graduate from highschool at an 88% rate; 66%have gone to college orother advanced schools.That’s in a city where less

than 10% of black adultshave a college degree, ac-cording to MCPS officials.

Well-ReadAll third-graders read Ayn

Rand, Shakespeare andEmily Dickinson, “and theyarelovingit,”Sadoffsaid.Nowonder 81% of last year’sfourth-grade class scored“proficient” or “advanced”in reading in the statewideevaluation tests — higher

than Milwaukee publicschools’61%.

“(MCPS) is one of my fa-vorites,” said John Gee, ex-ecutive director at Wiscon-sinCharterSchoolsAssocia-tion. “Once you walk intothe school, the atmospherejust reeks of people who arehappy, polite and friendly.You’ll see third-graderswalking down the hall andyou immediately get a senseof pride and communitythat is not like your typicalurbanschool.”

Sadoff, 68, gives credit toRauh and his teachers. Butstaff and pupils alike believeSadoff’s passion for stu-dents’ lives has been crucial.

“When it comes to thefoundersofaschool,youusu-ally hear of them, but youdon’t know them,” said Ash-ley Godley, an MCPS gradstudying nursing at Texas’PrairieViewA&MUniversi-ty. “I met Ron plenty oftimes. We were always see-ing Ron and (Sadoff’s wife)Micky helping the teachersa lot. It made us think thisman is really serious aboutchanging lives, and thisschool has really done that.BeingthebestisNo.1 —theyalwayssaidthat.”(Continued)

Investor’s Business Daily www.investors.com @ Copyright 2009

LEADERS & SUCCESSTHURSDAY, FEBRUARY 26, 2009

Sadoff’s KeysWhat: Founded anurban school to helpMilwaukee kids aimfor college.How: “We want teach-ers to love our stu-dents.”

Money manager Sadoff decided 12 years ago to open theMilwaukee College Preparatory School, whose alumnireach advanced education at a 66% rate.

His School Makes The GradeInspire: Ron Sadoff goes the private route to steer pupils toward the right path

Page 2: THURSDAY, FEBRUARY 26, 2009 LEADERS & SUCCESS His School ... · In 1997, the market-beat-ing money manager invest-edhisowncashtoopenthe MilwaukeeCollegePrepara-tory School (MCPS).

Investor’s Business Daily www.investors.com @ Copyright 2009

According to Rauh, theschool has hosted 20 in-terns who have gone onto start high-performingcharter schools in high-poverty areas, includingEdmund Burke CharterSchool in Boston andHenry Johnson School inAlbany, N.Y. In Novem-ber, the Wisconsin Char-ter Schools Associationchose MCPS as its firstWisconsin Charter Schoolof the Year.

Before starting MCPS,Sadoff thrived in the fieldof investing by adopting ado-it-yourself mind-set.

The son of a doctor,Sadoff fell in love withthe stock market whilestudying at the Universityof Wisconsin. A businessprofessor challenged Sad-off and classmates to digdeep into the financialsof high-growth stocks,such as bowling gearmaker Brunswick. Hepushed the class to under-stand what caused greatfirms to peak and decline.Sadoff calls it “findingthe rainbow.”

Sadoff opened a stock-trading account andfound that his brokergave poor ideas. So hespent mounds of hoursstudying companies whileinside a brokerage’s li-brary. “I learned whatdidn’t work,” he said.“Sometimes that helpsyou a lot more.”

Take earnings estimates

made by Wall Street ana-lysts. Sadoff says the esti-mates by themselvesaren’t useful. But hefound the direction of astock can depend onwhether it’s beating ormissing those targets.

Sadoff, who continues tohead Sadoff InvestmentManagement LLC, closelytracks the monetarycycle. If the Federal Re-serve is expanding creditby lowering interest rates,he turns bullish and looksfor sectors that have beenbeaten down for five to10 years. These sectorstend to gain price momen-tum after surprising theStreet with better-than-ex-pected earnings and sales.

So why hasn’t the Fed’sactions the past yearhelped the market? Sadoffalso studies price trendsof commodities, real es-tate, consumer loans andother big asset classes.Michael Sadoff, one ofRon’s two sons who workwith him at Sadoff Invest-ment Management, saystoday’s environment isunique because Americafeels the bursting of manybubbles at once. “Moneymanagers obviously areaware of the economy,but they look at stocksand not the bigger picture.(My father) looks at theeconomy and how it willaffect the market. He’sable to come to the con-clusion, ‘Boy, the economy

looks like it’s going into arecession. Let’s get out ofthe market entirely.’ ”

This knack of timingthe market has boostedSadoff’s performance.From Jan. 1, 2000,through Dec. 31 of lastyear, the firm’s growthportfolio had a 13.6% re-turn vs. the S&P 500’s28.1% drop. Since theend of 1980, the portfoliohas had a 2,750% returnvs. 1,360% for the 500.

One day, he and hiswife saw a TV show pro-filing a successful Chica-go school headed byMarva Collins. Sadoff vis-ited it, then got a licenseto open the Marva Col-lins School in Milwaukee,now known as MCPS.

Sadoff admits he “knewnothing about the eco-nomics of education.”But he built a dedicatedstaff by sharing his pas-sion for education. Hevisited an inner-city pri-vate school, met with theprincipal, Rauh, and rat-tled off questions. Rauhquit and became the firstprincipal of MCPS.

“He would ask probingquestions, such as ‘If youget a $10,000 check inthe mail, what would youdo with it?’ ” said Rauh,the MCPS principal sincethe start. “He takes youto the next level in termsof thinking about how tomake a great school.”

Sadoff expects dedica-tion from his school’s

teachers. If a pupil issick and stays at the hos-pital, the teacher visits.In return, he writesthank-you notes to eachteacher yearly.

The PushSadoff presses teachers

and pupils to challengethemselves.

“It was intense,” saidMCPS grad Godley. “Wehad to memorize poemsevery week. We alwaysmemorized new vocabu-lary words. If you’re in sev-enth grade, you were doingeighth-grade work. Ineighth grade, you’re at thehigh school level. You al-ways had something to do.But with the support of myfamily, I could do it.”

Tokeeptheschool tuition-free, Sadoff realized heneeded grass-roots help toensure its future. So hebroadened the schoolboard to include local out-fits to help raise money forthe gap between state fund-ing and the cost per pupil.

The school has no buses;parents drive their kids toschool. As a result, momsand dads spend a lot of timeinside the building. Theylikely hear teachers and pu-pils recite a “Declaration ofExcellence.” The six-para-graph pledge begins,“Today is a new day. I willuse this day to the fullest inmy quest to know who Iam, what I want and whereI am going. I believe in therelentless pursuit of excel-lence.”


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