Irwin L. Jacobs got his initial business training from his father, the bag man.

No, his old man wasn't some kind of gangster. Jacobs' pere bought and sold reconditioned burlap bags.

He'd trundle around Minneapolis, picking up old burlap bags used in the city's grain elevators, taking them back to his shop to be refurbished, and then selling them to feed-grain dealers. More often than not, son Irwin was at his side.

"Dad was a good provider, but more important than that, he was a fabulous teacher," the 43-year-old Jacobs says. "One of the things I learned in the family business was you don't throw anything away. There's a place in life for everything."

In the burlap bag business, that meant that when a bag was too tattered to hold feed grain, it could be sold to a nursery for use wrapping tree roots.

"Nothing was thrown away -- nothing," Jacobs says. "I learned to look for value where other people didn't see it."

That might have been the most important lesson of all.

It has driven Jacobs into a series of increasingly large deals that have made him a power to reckon with on Wall Street -- although his base remains in a modest building in Minneapolis.

"What's the difference if you're in New York or Minneapolis -- everything's done by phone, anyway," he says.

Over the past couple of years, Jacobs has ferreted out value in and made plays for Pabst Brewing Co., Kaiser Steel Corp. and, most recently, Avco Corp. But he's probably best known as the Big Bad Wolf who stalked Walt Disney Productions for a time last summer.

Jacobs wound up selling his 7.7 percent holding in Disney for a $30 million profit, but his pursuit helped force an ownership and management restructuring of the entertainment company that most analysts thought was long overdue.

"I think Disney is better off than it's been in years," he says. "I have served a purpose in that company."

Jacobs has been trying to find values that others miss since he began his business career, shortly after he grew old enough to drive his father's truck. When he was 18, a trip past a burning building got him to wondering about what happened to the damaged merchandise in the building -- leading him into the insurance salvage business that made him his first million.

He moved salvage onto a much higher plane in 1976 in a celebrated deal in which he and some partners paid $44 million for the $276 million worth of receivables belonging to the bankrupt W. T. Grant & Co. department store chain. They turned a $9 million profit the first year, and the money from that deal is still coming in.

Although successful in salvage, Jacobs was not an instant hit when he moved into the more conventional world of business management. In 1974, he borrowed $4 million and bought Minneapolis' Grain Belt Breweries, a regional beer-maker he thought undervalued. "There was something about big business that had a mystique in it," he says. It also had pitfalls. Jacobs "found out that I didn't have the abilities and didn't know as much about it as I thought." The problem, he discovered, is that beer is a lot more popular in the summer than in the winter in the cold upper Midwest.

Jacobs spent $1 million in less than a year trying to make Grain Belt a year-round success before throwing in the towel. But even that salvage operation was profitable -- he sold the company's name and equipment, paid off the loan, and walked out with a $4 million profit.

In the late 1970s, Jacobs began dabbling in the stock market in a big way, including picking up a reported $4 million profit from an investment in Holly Sugar. The Grain Belt experience had taught him a new lesson. "I had decided that what I wanted to do was make investments in other peoples' businesses -- I didn't want to buy the businesses," he says.

That's what led him to Arctic Enterprises, a highly successful snowmobile company in which he bought a 23 percent interest in 1978. Jacobs said he had no interest in running the company, and he hardly needed to -- the first two years after he bought in, the company did very well. But just as in his Grain Belt venture, seasonal factors crept in.

"The third year of my investment," he remembers, "there was no snow." The company was forced into a Chapter 11 bankruptcy proceeding, and Jacobs took it over. "I was confident I was going to be branded for the rest of my life with this failure," he says. "Maybe that's what motivated me, more than anything else."

Jacobs cut a swath through Arctic, selling the snowmobile division and concentrating the company's remaining operations on its most profitable assets, including a couple of boat companies. By 1981, the company was out of Chapter 11 and operating profitably. "We were dealing with Murphy's Law before we went into Chapter 11, and we did the opposite coming out of it. Everything we did was right," he says. "No matter what I do in my life, there is nothing that will duplicate it."

Having proven that he could successfully run a business, Jacobs set out to acquire more to add to the boat company, which became the basis of his Minstar Inc. holding company. Today, Minstar controls nearly 40 companies with a total of 37,000 employes and more than $1 billion in annual sales, including Bekins Van Lines, some real estate holdings, and several small manufacturing concerns.

In adding companies to Minstar, Jacobs has sometimes been ruthless in cutting the fat away from an acquired company and keeping only those parts in which he was interested. That, and his salvage-business past, have earned him the hated nickname of "Irv the Liquidator." True, he threatened to break Disney up and sell it piecemeal, but he insists that type of strategy is just good business.

"It really is common sense," he says. "If you're looking at the long-term in something, you must look at the highest and best use, at redeployment." It's not a philosophy far removed from the family business of selling worn-out burlap bags to nurseries. But he says that when he buys a company, it's with the intention of running as much of it as is viable. "We have never bought a business with the intention of closing it down and liquidating it," he says.

It's hard to tell what Jacobs would do with one of the big companies he's gone after lately. He just hasn't seemed able to succeed in gaining control of one, leading some critics to suggest he again has become more interested in playing the market than in running a business -- something he denies emphatically.

But the pattern of the Disney deal is one that seems to fit many of Jacobs' other investments: Buy a chunk of a company, threaten management with a takeover, and then sell out for a nice profit. He did it at Pabst, he did it with Kaiser Steel, and last week he appeared to have turned a profit of about $25 million on his investment in Avco when Textron Inc. made a $1.1 billion offer for the financial services and aerospace manufacturing company.

As a result, Wall Street sees Jacobs more as a freewheeling investor than as a corporate manager. Indeed, he admits that he is constantly trading in the market, trying to wring a bit of profit out of any investment.

"There are a lot of things we're involved in today," he says. "It's not one or two, it's many."

In the interest of security, Jacobs does all his stock trading personally, using code names and numbered accounts to disguise his actions as much as possible. "You're never going to anticipate me," he says. "You may guess, you may be right, but don't anticipate the moves we make. . . . The unknown to me is always worth more than the known, and I'll never give that opportunity away."

With his reputation as a wheeler-dealer, Jacobs has accumulated quite a following on Wall Street. Companies in which he takes a significant interest seem to have a tendency to be bought out by other corporate suitors, at a handsome profit for both Jacobs and anybody who followed him into the stock.

As a result, Jacobs has quickly joined that small group of investors, like Saul Steinberg, T. Boone Pickens or Carl Icahn, whose very interest, or even rumor of interest, in a company seems to drive the stock up. Earlier this year, stories circulated that Jacobs was buying American Broadcasting Cos. stock. ABC shares shot up $5. There was just one problem. "I had no interest in ABC," Jacobs says.

But Jacobs says he's no corporate raider. He's opposed to greenmail, and he says he doesn't start buying stock in a company just to be bought out at a profit. He contends that when he starts accumulating large amounts of stock in a company and threatening management with a takeover, he's not bluffing. Even though many analysts doubted he had the wherewithal to put together a deal to take over a company as large as Disney, he says "there wasn't a 1 percent chance that we couldn't put it together."

This sort of bravado, and his Midwestern base of operations, makes Jacobs a less than popular figure in some areas of Wall Street -- although that could be more jealousy than anything else. There may be questions about his motives, but there's no doubt he's been successful -- enough so to drive a Rolls-Royce and own multimillion-dollar houses in Minneapolis and Florida.

Just as he bridles at being called Irv the Liquidator, Jacobs resents the suggestion that his investment strategy is to take the money and run. He plays by the rules, he says, and he doesn't want anything that any other stockholder in a company would not get. "I'm not Don Quixote or Robin Hood. I get rewarded well for what I do," he says. "But I want to walk in the street, not in the alley."