When did your interest in financial markets start?
I purchased my first share at the age of 12 on the recommendation of my mother. By then, she had already introduced me to a savings account at the bank and encouraged me to use up some of my bank savings to buy shares. Thankfully, she told me to buy shares of things we use in everyday home life. The two of us settled on shares of Chubb International, a security company.
What did you study and why?
My foray into bank savings and investing led me to develop an interest in businesses. In any case, my mother was an accountant and always talked aspects of the business, a wholesaler, she worked for. So, I enrolled for a BSc. Business Administration degree, with a double major in finance and economics. I remember in one of my freshman classes, a professor, Bill Wetzell, asked the class why we wanted to study business. Ninety-nine percent of the class said they wanted to make money. I said I wanted to understand how businesses work.
What do you think equips you to do this job properly?
Managing money requires several critical skills (quantitative abilities, inverted thinking, and a great temperament). Of those, temperament reigns supreme. Setting out your investment philosophy, enhancing the process by which you enable that philosophy, and possessing the temperament not to be distracted by other ways in which market participants make money are key. Simply appreciate that the time for your approach will come more often than other approaches to making money.
What do you love about investing?
As Investing is a profession made up of a combination of disciplines, one needs to be multi-disciplinary to do it successfully and enjoyably. Investing bestows upon you the responsibility to understand the world, and act to the best understanding there is in the world. Since no one is omniscient, you should not only know the major principles of the major disciplines, but also make connections between them for the purpose of investing and, only in the circle of competence produced by connecting these major principles. If someone makes money from what you do not know, do not be envious. Simply appreciate that they are extracting economics from areas where they have connected the dots, so to speak. Stick with your dots. Your time will come.
What do you find the most challenging part of your role to be?
The most difficult part of managing money is aligning the manager’s consistency in risk appetite with the client’s fluidity in risk appetite. Often, clients will abandon their risk appetite in both bull and bear markets out of greed or fear respectively. It is difficult to stick to your knitting, as it were, and accept that you could lose a client. Yet this is the price a manager should be prepared to pay. So high is this price though that Warren Buffett dispensed with it by using public, rather than institutional or private wealth assets, to invest.
Why do you think clients will do well at Northstar and First Avenue?
The combined organisation possesses an enviable diversity of cognitive abilities while engendering transparency as a means of cultivating trust among staff and clients. This quality is a valuable input as our goal is to be the best manager, not the biggest, to our clients.