his business to rip out expenses, the next he's giving his investment news service away.

All this of course is done to shore up the bottom line, win customer loyalty and make lots of money. Save money during the good times and spend during the bad, he said, because that's when the money is necessary. He claims he walks around thinking the market is always going to fall from the sky.

"I'm a bear by nature,'' he said during a seminar hosted by the Bloomberg Business News last week at the Bermuda Underwater Exploration Institute.

He is the founder and principal of the financial news service used by many investment analysts on the Island, and around the world.

That bearishness helped him when he was fired from his job at Salomon Brothers 17 years ago, one of the victims of a takeover. Instead of living high on a lucrative career at Salomon, Mr. Bloomberg was living on his salary and stashing away his bonuses.

When the bad times hit in 1981, he was able to call on his resources and those of his colleagues to set up the computerised financial service. His concept was based on the premise that investment professionals wanted more than financial figures. They wanted to be able to manipulate those figures, and perform analytics while the markets were hopping.

Bloomberg keeps wary eye on future Out of that idea was born a worldwide computer network tied into a live feed of news coupled with a system of functions that generates graphs and other analytical tools.

It was a typical entrepreneur's concept of adding value to a service and it took the investment world by storm, challenging Reuters and Dow Jones.

Today, there are 80,000 computer terminals around the world which bear his name, including about 400 on the Island. He has 3,500 employees and earned more than $1 billion in revenue and $200 million in profits last year. The private company has assets estimated at $2 billion and is growing 30 percent annually.

Even with this kind of success disaster lurks around the corner, or so Mr.

Bloomberg believes. He takes his cues by looking at three companies: Microsoft Corp., General Electric and IBM.

Microsoft is an example of a company with essentially one product and is trading at 20 times revenue, while GE trades at about three times revenue, and IBM at about 1.5 times revenue.

"There is something wrong in a market that trades like that,'' he said.

And so he likes taking action on cutting costs during the good times so he'll already be lean and mean when the competition for business heats up during the bad.

While others are channelling their energies into downsizing and cutting costs he'll already be running. He figures the cash saved during the good times will allow him to continue marketing and expand his service while his competitors struggle to find the resources.

"When things are going good that's the time to reduce our costs so that when times are bad you can add to provide better services so you can be more competitive,'' he said.

The advice applies to lifestyle as well as corporations.

"Things have gone so well for so long that right now in your careers you should put something away,'' he said.

Mr. Bloomberg is hedging his bets for the bad times by taking an axe to costs and by adding services to win customers' loyalty.

For example, he found the company was spending $2 million a year in periodical subscriptions. He asked employees worldwide what subscriptions were absolutely necessary for them to do their jobs.

In six months he managed to cut $300,000 worth of subscriptions. But then he found another $1 million worth of subscriptions that wasn't somehow recorded on the books.

He also found employees weren't reading most of the magazines, newspapers and newsletters they had ordered. Many were being thrown away still bundled and packaged.

He adopted another strategy. When renewal forms came in these were filed away until the third reminder, which often arrived with a vastly reduced price. And sometimes the publication would keep sending the periodical so as to keep up circulation.

Only when an employee enquired about a subscription would the renewal be taken out. That query was his measure of what was necessary for his employees. If it wasn't missed then it wasn't necessary. Mr. Bloomberg managed to bring the bill down to $1.5 million from $3 million.

"It's a good time to be conservative because for a lot of people things have gone too good for a long time,'' he said.

He is also constantly looking over his shoulder to try and spot the next competitor. He believes the competition will not only come from financial services provided by such stalwarts as Reuters and Dow Jones, but from elsewhere.

He likens this "elsewhere'' to what happened to IBM when the minicomputers and then the personal computer came along and took the market away from the company.

IBM mainframes were much better than minicomputers when these were first being marketed. IBM ignored the minicomputer because these were inferior and the company's customers said they wanted the mainframe.

"IBM made a classic mistake,'' Mr. Bloomberg said. "They listened to their customers too much. Minicomputers found a market totally separate from all the traditional mainframe customers. The companies then made the product better with the profits.'' While the minicomputer still didn't match up to the mainframe it was cheaper and became good enough for the needs of IBM's customers who didn't need all the bells and whistles.

"IBM's customers deserted them,'' Mr. Bloomberg said. "The same thing happened to the minicomputer with the introduction of the PC (personal computer).'' So while he constantly attempts to improve the Bloomberg product he's also looking at the other alternatives.

"Is there someone now building a business away from us?'' he said. "If we are competing on who's best that's no problem. We know how to do that. It's the one that is providing a service that's just good enough that worries me.

The question for companies like us is not whether we are better but `Is the other guy's product adequate?''' One of his main worries is the Internet and in particular the service being provided by Yahoo.com for free.

"We have recognised the problem and we are out building up our web site, bloomberg.com,'' he said. "It's nowhere the same as Bloomberg service but it's adequate if that's all you need. So if we are eaten for lunch by a `.com' then it's better that it's our own `.com'.'' Bloomberg has in effect raised the standard on the Internet, making it more difficult for start-up competitors like Yahoo to take away the company's customers.

"It's one of the things we can do to prevent Yahoo.com from doing to us what the minicomputer did to IBM,'' he said.

In terms of personal lives he advises employees to improve their skills so they can better compete when companies begin to downsize.

"You have to constantly find more ways to improve your skills,'' Mr.

Bloomberg said. "It's a way of providing value added service.'' For example, Bloomberg is constantly adding the number of languages in which it provides its financial service. The help desk has brought down the number of hang-ups before a call is answered down to five percent (30 percent is considered good in the industry).

And to garner customer loyalty Mr. Bloomberg is providing those who find themselves unemployed a free Bloomberg terminal at home for up to two months.

The connection is made through the Internet.

"We will do the same for any customer that requires a leave of absence to attend to certain family or medical situations such as a serious illness or during leave to care for a newborn child or family member,'' he said.

The unemployed can then access the Bloomberg jobs listing on which financial firms often post openings, and they can send and receive messages.

Actually he admits he has yet to remove the service from anyone after the time limit. Inklings of a sharp businessman or a guy with a heart? Probably both.

"I remember when I was unemployed,'' he said.

MICHAEL BLOOMBERG -- `I'm a bear by nature'.

BUSINESS BUC