The cautious seldom err or write great poetry. – Howard Marks’ favorite fortune cookie, Dare to Be Great II
J.P. Morgan Chase is king of the realm these days, but during my time at Chemical Bank there were other big dogs on the “Street.”
The neoclassical, money-minting, “House of Morgan” sat kitty-corner to our headquarters at 20 Pine.
Next door, David Rockefeller’s baronial fiefdom, the sixty-story, glass and steel slab, One Chase Manhattan Plaza, towered over Chemical’s pre-war high-rise and Jean Dubuffet’s tangled abstract, Group of Four Trees, flipping us off from the courtyard.
And uptown, Manufacturers Hanover lent to the corporate elite from their Park Avenue perch, eyeing with distain Chemical’s middle-market rabble. While high above the fray, Walter B. Wriston’s Citicorp lorded it over us all.
But in the end, Chemical smelled blood, devoured their unwary prey, and for desert had its way with the Morgan name. If you can’t beat them, eat them. J.P. would understand.
That thing called “edge”
Mark LaMonica, Director of Product Management at Morningstar, describes the elusive, hard to define attribute called “edge” as better information, analytics, or behavior. But no one in the investment industry ever built a great business without another edge we call “guts,” the confidence and courage to take a chance.
With vast, industry-wide reserves of talent and resources, the odds of any single firm vaulting organically over the competition are slim to none without disruptive technology, blockbuster products, or an unbeatable track record.
But, disruptive technologies and blockbuster products – computers or ETFs – come around maybe once every fifty years, as Angelo Calvello points out in Institutional Investor. And, while consistent, multi-decade investment superiority isn’t impossible, it’s exceedingly rare.
When we ask our clients which risk matters most, they almost always place “mission failure” at the top of the list. Serious investors care deeply about keeping their promises.
Those promises can be tallied up to calculate a “required return.” Achieve that required return and we can fulfill our promises; fail to achieve it and we are likely to disappoint the people and causes we love.
But here’s the challenge. To endure and deliver on those promises made, which course can overcome the all-too-common clutch of complacency?
M&A or the highwayRead More »
Aoifinn Devitt, new CIO at London LGPS CIV Ltd.Read More »
History doesn’t repeat itself, but it often rhymes. – Mark Twain?
My grandmother, born in 1896, used to describe recessions as panics – economic brushfires stoked by a bank collapse or two and lurid headlines of panicked customers storming the ramparts, window jumpers, and families in ruins.
The newspapers had a field day flogging the latest hearsay and then it all blew over, but rumors and innuendo were never good for business and banks were always suspect.
It wasn’t until the countrywide “Bankers Panic” of October 1907, triggered by a massively leveraged attempt to corner United Copper Company stock, that political and business sentiment finally coalesced around legislation leading to the Federal Reserve Act of 1913.
As an aside, the right to vote “without regard to sex,” otherwise known as the 19th amendment, passed final muster on August 18, 1920. And it was not long after that my grandmother accepted a steady teaching position at Michigan Agricultural College (aka Michigan State University) and cast her first ever vote for Calvin Coolidge in the 1924 presidential election. Progress in fits and starts, but progress, nevertheless.
Bygone family conversations came to mind as I scanned the headlines last week. Labor market healthy. Don’t be so sure. Stock market shaky. What to do? Rates? Who knows. And beware a looming venture capital apocalypse. Retreads, recycled, reprinted.
But, inevitably, far from that madding crowd, each new generation of investors and entrepreneurs has something inventive in mind, quietly creating those next big things, building a better tomorrow.
In our line of work, acquiring talent and capabilities for institutional and family office clients, we see a steady flow of quality candidates, OCIO mandates, and appealing acquisition opportunities.
2024 is looking good. Recruit, consult, connect. We’re here for you.
– Charles Skorina
*Images: The 1907 Crisis in Historical Perspective, The Center for History and EconomicsRead More »