The world is not enough for some people. Take Dennis Tito founder, president and chief executive of Wilshire Associates.
A real-life rocket scientist who worked for NASA, Tito developed the trajectories for the Mariner voyages to Mars and Venus. Then he founded Santa Monica-based Wilshire Associates and built it into one of the nation’s premier investment services firms. In the process, he created the Wilshire 5000 Index, the stock market indicator preferred by Fed Chairman Alan Greenspan.
What’s next? Outer space.
Next spring, Tito at the tender age of 60 will become the world’s first space tourist, blasting off from Russia to the orbiting Mir space station. He’s paying a cool $20 million of his own money for the 10-day trip.
It may seem like a steep price, but it’s a pittance compared to the $13 billion that Wilshire Associates manages for its clients, and the $1 trillion in assets for which his firm offers advisory services.
While skeptics might suspect Tito has a screw loose, putting his near-retirement-aged body through excruciating G-force as he blasts off and then re-enters the earth’s atmosphere, he’s actually highly intelligent.
With both a bachelor’s and master’s degree in aerospace engineering, Tito worked at NASA’s Jet Propulsion Laboratory in Pasadena. There, he pioneered new methodology to determine a spacecraft’s path and ultimately developed ways to use those same mathematical programs for financial analysis. Today, some 500 institutions depend on the analytical tools developed by Tito and his Wilshire Associates colleagues. Founded in 1972, Wilshire Associates now employs about 350 people.
Earlier this month, just before departing for his space training sessions in Russia, Tito agreed to an exclusive interview in his Westside home.
Question: While your earth-bound accomplishments are considerable, your upcoming space mission is clearly your most fantastic or outlandish, depending on whom you talk to venture to date. Why are you doing this?
Answer: I have always dreamed of going into space since I was 17, when the first artificial satellite was launched by the Soviet Union. I first made an attempt to talk to the Russians back in 1991 about the guest-cosmonaut program, but that was about the time the Soviet Union disintegrated into independent states. Although I heard about Mir Corp. (the Amsterdam-based company that has leased Russia’s Mir space station) six months ago and was watching it closely, there were no actual discussions until three months ago, when (the proposal) was resurrected by a meeting I had.
Q: How did you set up that meeting?
A: I had let it be known that I was interested in flying in space and they (Mir Corp.) actually approached me. It was the result of a one-on-one discussion. I was accepted more than chosen, by passing the medical exam. Then I was able to work out a financial arrangement with Mir Corp., which made the admission feasible (for $20 million).
Q: Won’t the physical strain on your body be tremendous?
A: Yes, I’ll have to be able to endure the physical stresses of space life, which includes heavy zero G-loading (forces in the body) at launch, weightlessness, and then again zero G-loading upon re-entry and landing so there are significant stresses on one’s body. And you are also mentally challenged to face the risk to travel 250 miles above the earth at 18,000 mph.
Q: What do your two grown sons and daughter think about you spending $20 million and risking your life?
A: They’ve told me they fully support me. They’ve never told me how to spend my money, nor have I told them how to spend theirs.
Q: If you absolutely must go, why not at least wait awhile for the price to go down?
A: Well, I can’t wait for the price to go down. I will be 60 at the time of the launch, so it’s now or never.
Q: How long will you be gone and how long will the training take?
A: I will be in space for nine or 10 days. It is uncertain how long the training will take, but it may be two weeks a month for the rest of this year. Prior to the launch (next spring), it will be a solid two months of training.
Q: Where will you train?
A: Star City, an hour outside of Moscow.
Q: Who will run Wilshire Associates while you’re gone?
A: I’ve been on sailing trips in the past for 10 days at a time and out of touch with the office, so it is not an unusual thing. The company is run by me and several senior people. I will be in contact and getting management reports while I am training.
Q: You’ve already been through some pretty rigorous tests in Russia. What did those involve?
A: They provided opportunities to experience weightlessness in a zero-G parabolic flight in a specially equipped Ilyushin-76 airplane, which provides a micro-gravity environment inside its large, padded cabin. The IL-76 aircraft conducts a series of parabolic arcs pitching up and accelerating, powering back, then gliding over the top of the arc with enough power to overcome air friction and drag. The result: 30 seconds of weightlessness, per parabola, with a series of 10 to 12 (arcs) conducted.
Q: Who else has been chosen to go?
A: No one else has signed up yet. I am the first to sign the contract, and that was a few days ago.
Q: Perhaps no one else is brave enough, or crazy enough.
A: I think there will be other people. I think there are a lot other higher risks that people take, like driving race cars, climbing Everest, ocean-racing sailboats to name a few. I think the risks involved here are not great. The Russians have not lost anyone in space for the last 28 years.
Q: Of course, your own involvement in space-related endeavors also stretches back a ways, to your days at JPL, where you first developed linkages between spacecraft trajectories and money management. Did the realization of those linkages come in a brainstorm or evolve gradually over time?
A: A trajectory from here to Mars involved certain mathematics that also apply to investments. It wasn’t any particular brainstorm, but more of a realization (as I became more acquainted with the practices of institutional investors in the stock market) that the techniques we used in the late ’60s weren’t all that sophisticated. And I saw an opportunity to apply the skills developed in aerospace to improve the investment process. It was applying a body of knowledge in one well-developed, sophisticated area to another area that was virtually virgin territory and undeveloped.
Q: Your Wilshire 5000 Index has been described as “elegantly simple,” and it’s the favorite indicator of Alan Greenspan, yet it’s still not as widely quoted as other indexes. What about that?
A: I think the Dow 30 Industrial is best known by the public and the S & P; 500 is the standard benchmark used by the institutions, although the Wilshire 5000 is used by institutions but not on such a widespread basis. Greenspan advocates the use of the Wilshire 5000 because it gives him one statistic that represents the overall stock market and an unambiguous answer about how the Federal Reserve monetary policy might be impacting the overall stock market.
Q: Did your index gain relevance during this spring’s sell-off, with the Dow and Nasdaq becoming increasingly volatile and frequently divergent?
A: The Wilshire 5000 Total Index fluctuated in value, as did other indexes, but at a certain point the Dow and the Nasdaq went in opposite directions and the only real answer as to how the stock market was doing that day was from the Wilshire 5000. The situation gave the Wilshire 5000 Index more credibility as a true market barometer. We looked at the Nasdaq and S & P; and had no idea whether it was a strong day or weak day, and the Wilshire 5000 was the only indication as to where it was going.
Q: Between your high-level financial analysis and outer-space training, your life seems very high-stress. Do you ever do anything just to relax?
A: I’ve had a longstanding interest in sailing. When I get back from space, I will take a series of 10-day sails to enjoy myself. I used to have a boat, but now I enjoy bare-boat chartering, where you sail without a skipper and crew. I skipper it myself.
Q: What’s the farthest distance you’ve sailed?
A: To the Australian islands, but that distance involves sailing from island to island. It doesn’t involve an ocean voyage, which is risky.
Q: Riskier than going into space?
A: Yes, because at any time, you can have the perfect storm come upon you, and there’s nothing you can do. If you are out there on the ocean, you can be in big trouble.
