Working Stiff
I have a strange feeling that 2020 was a buffer year for me, not so much by design, but by happenstance. After many years (I mark them as starting in 1966 at the age of twelve…so call it fifty-five years), the inertia of work has set in. People talk about “failing retirement” as a cute tongue-in-cheek way of bragging that they are so busy in retirement or see such a demand for their skills that they reengage in active working world activities. They take a job or start a business. I remember a guy who I knew from Cornell Advisory Committee involvement that went out and bought a mustard company, of all things, just to keep himself occupied. A fraternity brother of mine who grew up in a highly privileged family (privileged by virtue of hard work and accumulated wealth) was not a person known for his hard-working ways, but he did have a strong intellectual manner and always worked smart if not hard. After a highly successful career in law and then in private equity finance (both of which seemed logical paths for him), he has spent the last decade building and creating an innovative food waste recycling plant using a new anaerobic process. It is among the very last things most of us who knew him ever thought he was likely to do with his life (or at least a goodly portion of it…indeed his swan song in a manner of speaking).
I have often said that for a person working in such an apparently capital-intensive arena like investment banking, I am one of the least capitalistic persons you will ever meet. I got it in my head that I am far less an investor than a worker. I have always characterized myself as an “earned income” kind of guy rather than an investment income kind of guy. I got paid for what I did, not really for the capital I deployed. Even in my own private equity activities, I was more the guy who worked the companies rather than selected them and sat back to reap the rewards. When I see that Elon Musk’s Tesla has grown in value 8X over 2020, I momentarily kick myself because who wouldn’t like to have put a big chunk of money into something that would appreciate by 8X over a year. It’s harder to say the same for the huge multiples achieved by Amazon, for instance, because they occurred steadily over twenty-five years and presented ample opportunity along the way for second guessing and selling out of the future for the sake of capturing the gains to date. Anyone who says they always let their profits run is either named Warren Buffet or is a liar. I take that back, there are a few people who can claim that, but I wonder if they are simply prone to inaction and inertia rather than sage wisdom that tells them to stay the course and not rebalance their winnings. I overthink my investments and therefore am better off leaving such things to more disciplined and dispassionate money managers while I go work some problem or other.
I have heard many people say that they are busy managing their investments, presumably pondering what to sell and what to buy next. That is a perfectly noble pursuit, but it just doesn’t ring my bell in any particular way. After years as an investment professional, I am far more prone to thinking that I cannot beat the market and that the only thing worse than an individual’s stock picking ability is generally their market timing ability. I am far more a believer in the random walk theory of markets to think I ever have any profound edge. But I do understand that I can work hard and I can even work smart. In fact, I tend to think that my ability to synthesize information and then advocate for a pattern that implies a valuable strategic or particularly innovative path, is my strongest suit. That is quite a bit different from saying that I just work hard and earn my pay. This trait I feel I have is not something I conjured up myself.
As long ago as 1982, when I was a freshly-minted Vice President at Bankers Trust, a very smart but gritty senior officer by the name of Ralph told his deputy, to whom I reported, that that was my MO. I was at one of those career inflection points where I was being considered for the first big career jump to Division Head status (the big managerial move for bankers in those days). Ralph had done what managers did when evaluating officers for promotion, he had discussed it with his colleague. The only thing was, his colleague and deputy and my boss at the time, was very indiscreet and told me exactly what had been discussed about me. Ralph has now passed away and I have no idea what became of Deputy Indiscrete, but by my calculus, he is a very old man by now. It doesn’t matter since this was not a great national secret, it was just something that was useful self-evaluation for me. It help me understand my strengths. God knows, we usually find out all our shortcomings, so why shouldn’t we get validation of our strengths as well?
What this information did for me more than anything was help me decide that I had some unusual and in-demand traits that made me valuable as a strategic thinker. I always thought my most valuable trait was my enthusiasm. That had even been told to me several times in annual evaluations. So at the intersection of enthusiasm and information synthesis lies the essence of what has made me harness up time and time again. Even after my mainstream career ended with the sale of Bankers Trust to Deutsche Bank (even though I stayed on at DB at their request for a little over a year), I have continued to have people seek my involvement to help build and drive businesses or business initiatives.
The same is also true about my expert witness work. I have found that my analytical information skills, writing ability and advocacy are the usual important skills, but strangely enough, that enthusiasm card has played an important role as well. So, here I am at the age of 67 (within several weeks), and I am still a W2 (or at least 1099) kind of guy…all about earned income. I have had a few investment wins, but mostly as a part of hard work and the passage of significant time. That’s OK by me. Unlike my old fraternity brother friend, I do not have the drive or inclination to try to leverage myself through the use of capital (there I go again… reminding you that I am really not a capitalist at heart) by starting an anaerobic digestion business or buying a mustard business. I do anxiously await my next expert witness assignment and the racking up of billable hours to match the reading, analysis and report writing. I have a strange sense of honor that comes from being a working stiff.