| Notes |
If his life had gone according to plan, Hostetter would have been back in Cambridge in 1963, working toward a doctorate in economics at Massachusetts Institute of Technology (MIT) and a career in academia. After completing his MBA and a required stint in the army, Hostetter started in the MIT doctoral program in 1962. He quickly realized that he was on the wrong track. “It was very mathematical and very theoretical, and the kids were scary smart. I said, ‘This is not for me,’” he recalled. “So I dropped out after one semester and went to work for Cambridge Capital.”
Cambridge Capital, a Small Business Investment Company (SBIC), was an early venture capital firm. It invested in promising smaller companies in a variety of industries.
The venture capital industry itself was born in the Boston area to help commercialize many of the technologies that had been developed at MIT and Harvard during World War II. It played a leading role in making the Route 128 corridor around Boston a technology hotspot in the early years of the computer era. Early venture-funded success stories include Teradyne, Digital Equipment, and Control Data.
In the spring of 1962, Hostetter was sent to Keene, New Hampshire, to explore a small investment opportunity for Cambridge Capital. Cable television industry pioneer Bill Daniels, who during the previous decade had played a leading role in introducing the world of outside investors to first-generation cable industry entrepreneurs, was brokering the sale of a small cable system. The main investor was to be another SBIC, Narragansett Capital Corp., which was run by former Textron chairman Royal Little. But the asking price for the system was $550,000, and Narragansett’s investment cap was $500,000. Cambridge Capital was being asked to invest the remaining $50,000 for a small stake in the venture. On Hostetter’s recommendation, Cambridge Capital agreed to the deal and named Hostetter to the cable company board to keep an eye on its investment.
A pioneering broker and owner of cable television systems, Bill Daniels brokered the 1962 sale of a small cable system in Keene, New Hampshire, to a group of investors including Cambridge Capital, which put junior employee Amos Hostetter on the cable company board to oversee its investment.
In researching the industry in advance of doing the deal, Hostetter went to New York City to meet with Ray Armstrong, a leading expert on cable television financing. Armstrong was an officer of Starwood Corporation, the investment office of the

The Road Not Taken
Hostetter might have seemed destined for a career in finance when he was growing up in Short Hills, New Jersey, the son of a very successful stockbroker, Amos B. Hostetter Sr. By the time the younger Hostetter was at Amherst, his father had switched his focus to the commodities markets, where he achieved near-legendary status.
Hostetter briefly followed in his father’s footsteps. He and Helmut Weymar, a high school friend, decided they would find a way to profit from 1962’s freeze in the Florida citrus crop. At the time, there were no futures contracts tied to the citrus markets, so they went to Quincy Cold Storage in Boston and arranged to buy 1,000 oversized cases of the actual commodity—frozen orange juice. To finance the purchase, they convinced Arthur Snyder, an aggressive 40-year-old officer at New England Merchants Bank, to lend them $10,000. They asked Quincy Cold Storage to keep the frozen juice and paid the storage fee. Six month later, with the freeze having decimated the orange crop and sent orange juice prices soaring, they sold the same cases back to Quincy Cold Storage, repaid Snyder, and made a $10,000 profit on their investment without ever “taking delivery.”
Amos B. Hostetter Sr., one of the initial investors in his son’s cable television company, helped hone the skills of a generation of commodity traders and hedge fund managers as a founding director of Commodities Corp.
Fairly certain that he would never escape his father’s shadow if he continued in commodities, Hostetter turned his attention to creating Continental Cablevision. Weymar, on the other hand,
had found his calling. He created Commodities Corp., and Amos Hostetter Sr. served as one of his founding directors. The trading firm built one of the most successful track records in the commodities field, based largely on the trading methods of the elder Hostetter. Some of the most successful multibillion-dollar hedge fund managers of the modern era, including Bruce Kovner, Paul Tudor Jones, Louis Bacon, Mike Marcus, and Jim Simons, got their start at Commodities Corp.2 |