Celebrity Deaths

This week the entertainment business lost three famous people – Michael Jackson, Farrah Fawcett and Ed McMahon. Someone once told me that celebrity deaths tend to come in threes, and this week is another example of this. I am not going to spend much time discussing their passing, but I do wish to send my condolences to their families. Celebrity deaths affect us so much because we feel like we really know these people; like they are a real part of us. I, for one, have enjoyed the work of all three of these people over the years. But as I read the obituaries, I was struck with one very harsh reality – the entertainment business is extraordinarily competitive and “what have you done for me lately” is a huge part of it. Longevity in the entertainment business is hard to come by (unless you’re Mick Jagger or Christopher Lee).

And this leads to today’s musing about the investment business. Unlike some professions where a person may be engaged in a project that starts, has a middle, and then ends, being a professional investor means your work is never through. Luckily, the markets are not open throughout the weekend, but Barron’s comes every Saturday so we can keep thinking about the key issues which occupy our minds during the working week. I am not complaining at all; this is the life I chose and I love it. It’s just that I am acutely aware (as are all professional investors, I suppose) that I am always thinking about the markets, obsessing on how I can perform better and worrying about what’s going to happen in Tokyo while I am asleep.

There is also a very strong “what have you done for me lately” aspect in this business as well. When a stock I buy goes up, I feel somewhat vindicated that all my hard work in researching, analyzing and actually buying the stock has paid off. Yet, unless I sell that stock and move on, every new day brings the potential for some unforeseen and unexpected event that could drive the stock down. It is not necessarily random, but it is an adventure in probabilities and some things simply cannot be avoided (the Black Swans, if you will). Right or wrong, up or down, I am applying the same level of analysis and dedication to each and every fund and stock I work on. My approach does not change and I clearly do not view my worth as an investor simply by how well my stocks have done in the last few months (last few years, yes).

Client reactions can also follow this “what have you done for me lately” mentality. Some folks who were questioning my judgment, experience and perhaps even sanity back in March, now view me much more favorably. What’s changed? I had the investment equivalent of a hit song or movie. Performance has been very strong lately. Part of this near-term success was due to my making very hard, contrarian and seemingly “crazy” decisions earlier in the year. Part of it was simply sticking to my guns when the consensus was suggesting that all past investment principles had been declared null and void. Part of it was simply the law of the harvest (you reap what you sow) as it applies to the investment process.

I feel a modicum of self-satisfaction as I wave modestly to the crowds, but I know full well that after the applause dies down, I will have to get back in the trenches and dig harder to find those choice nuggets amid all the dirt. It’s a dirty job, but hey, someone’s got to do it…