ByLeslie Kwoh

Some investors try to predict a CEO’s success by studying his or her past.

Julio Urvina tosses three coins and consults the I Ching oracle.

Urvina, an independent financial advisor in Venezuela, has turned to the ancient Chinese divination tool for all kinds of investment decisions over the past four decades. In that time, he says, “it’s never been wrong.”

In a new edition of his 700-page-plus book, “The Tao for CEOs and Investors,” Urvina details how the oracle foretold the fates of dozens of famous bosses. Jack Welch’s success at General Electric? Foretold! Bill Clinton’s blunder with Monica Lewinsky? Also foretold!

On asking a question, he tosses three coins six times each and matches the results to one of 64 possible hexagrams (pictograms representing the coin toss combinations), symbolizing fates such as “Progress,” “Oppression,” “Revolution,” “Great Power” and “Darkening of the Light.”

In an interview with At Work, Urvina discussed how the process works and shares some of the oracle’s best calls.

Edited excerpts:

WSJ: Tell me about I Ching.

Urvina: It’s an oracle and also a book of wisdom and ethics. Some people say it’s 5,000 years old and some say it’s 2,500 years old. Confucius studied [I Ching] for 80 years.

[The basic premise is] during the good times to be humble and thrifty. Modesty is the greatest attribute in the oracle. That’s what’s good about the CEO of Caterpillar [Douglas Oberhelman] – he has modesty. Warren Buffett is another example. He never flouts his wealth.

But during the Yin times – the bad times – the oracle wants you to be hopeful and steadfast, and hold onto your principles. Eventually, the cycle will return. It’s not about cause and effect; it’s about when events synchronize.

WSJ: How does one consult the oracle?

Urvina: The original process was with 64 wooden sticks. I use coins. You take three coins and you throw them six times. The first three times will give you the first trigram [a set of three lines], and the second three times will give you the second triagram. [Together they make the hexagram.]

Before the days of the computer, you’d have to draw the trigrams manually and you’d get a matrix. Now I use my computer.

You’re looking for certain things like good fortune or success. If you buy companies, you’re buying the good fortune of the CEO. If a CEO has a mandate of heaven, it’s a good company to buy. But if he doesn’t, why buy it?

WSJ: But every company goes through ups and downs, so isn’t the oracle always right at some point in time?

Urvina: You have to set your own time limit, because eventually the CEO will overreach and come crashing down. It’s whatever makes you comfortable – 10 days or 20 days if you’re a day trader. But I’m big on long term, so I use long averages. The oracle predicts up to seven to 10 years.

WSJ: When was the oracle correct about a CEO?

Urvina: In 1997, I did an oracle on Sun Microsystems CEO [and co-founder] Scott McNealy. The guy was so talented as a manager and CEO. Yet, when he entered the Darkening of Light period, his company was doomed and there was nothing he could do about it. If heaven says you’re going to have dark forces, it’s going to happen. There were dark forces moving against him; there were people inside the organization doing him harm. [Editor’s note: McNealy stepped down as CEO in April 2006 following 22 years at the helm. Experts attributed his resignation in part to a board that was antsy for change after years of declining company performance.]

In 2002, six months before he became CEO, I did an oracle on Stan O’Neal of Merrill Lynch. The hexagram said: “Even a lean pig has it in him to rage around.” In other words, the oracle was saying, “If you don’t tie him down, the guy’s going to destroy everything around him.” Are you going to buy into a company that has a CEO like that? And the board of directors didn’t tie him down. [Editor’s note: O’Neal resigned in October 2007, just days after he announced a multibillion-dollar write-down related to mortgage losses.]

WSJ: What about predictions for the year ahead?

Urvina: The person people ask me most about is Google. Larry Page will do very well. His hexagram is positive because in the fifth line it says, “As a king, he approaches his family. Fear not: good fortune.” A king is a symbol of a fatherly man who is richly endowed in mind. The whole family can trust him. I’d buy that. I’d buy Google any time.

WSJ: Has the oracle ever been wrong?

Urvina: In 44 years, I’ve never seen it wrong. The only problem is when people ask the same question twice, because the oracle will lead you in the wrong direction. It knows you’re trying to fool it, so it’s going to lead you in the wrong direction. You lose its trust. Does it sound crazy, what I’m saying?