It’s something for all of us—including Coventry League—to reflect upon.
Many long-suffering Cleveland Browns fans are cherishing the competitive spirit of the Cavaliers as they embark on Game-3 of the Quarterfinals of the NBA Playoffs against the Toronto Raptors. ESPN shared a thoughtful clip of an interview with LeBron James in which he describes the philosophy of “Man in the Arena.” He has referenced this idea in the past, too.
It’s something for all of us—including Coventry League—to reflect upon.
He opens the article by stating, “When you start your career, you might think you’re setting out to change the world. But the world is far more likely to change you.” He then questions what happens to some of these young, well educated professionals who begin their careers in finance with a sense of idealism and hope to live a meaningful life.
These observations seem to apply to other careers, too, particularly in healthcare and education. For example, many aspiring doctors and ones early in their career have noble and caring ambitions; some of these same doctors eventually become disenfranchised by a system that is bureaucratic, inefficient, corrupt, and driven by greed.
Nevertheless, the article is brief, so we encourage you to read the whole piece as Lewis refers to several occupational hazards of working on Wall Street, including some often overlooked ones:
Anyone who works in finance will sense, at least at first, some pressure to pretend to know more than he/she does. [What one pretends to know is unknowable.]
Anyone who works in Big Finance will also find it surprisingly hard to form deep attachments to anything greater than him/herself. [People inside a big firm have no serious stake in its long-term fate; they can do what they’re doing at some other firm—so long as they maintain their stature in their market.]
More generally, anyone in Big Finance will feel enormous pressure to not disrupt or question existing arrangements. [The financial sector fiercely resists useful, disruptive entrepreneurship and market-based change. It also has the resources—monetarily and politically—to prevent these improvements from happening.]
In summary, he suggests that the intense pressure to conform, to not make waves, has got to be the most depressing part of life in finance for a genuinely ambitious young person. He also recognizes the opportunity—and need— for a Silicon Valley-style scorched-earth entrepreneurship on Wall Street right now.
Adding a talented full-time CFO to manage a small or medium-sized company’s high-finances such as acquisitions, banking/investor relationships, strategic financial analysis/planning, and financial policy (including oversight of a controller/bookkeeper) is not cheap.
Now, let’s be clear: the important duties of a bookkeeper, accounting manager, and controller are not necessarily interchangeable with the duties of a CFO, as Janine Popick, CEO and co-founder of VerticalResponse can attest. The latter is where big picture strategic insights and analysis, competitive advantages, and proper policies are best formulated. It is where a finance guru seems to "think different," to reference Steve Jobs' statement.
Likewise, a quality CFO or Investment Banking Kiosk should be able to understand business models and value drivers, distill and communicate these concepts, and devise and oversee implementation of improvements (including financial/accounting policy and scalable systems). One alternative objective measurement to assess the latent talent of a potential CFO (or CEO for that matter) is to determine whether that individual is a good investor (this prowess is a direct relation to one’s ability to refine business models, assess competitors, and implement winning strategies/tactics), which is one of the rarest talents in the marketplace (less than 1% of professional investors can perform better than a common index over a 10 year period).
Nevertheless, how do some savvy Silicon Valley emerging growth companies leverage this talent affordably? Answer: Investment Banking Kiosks and Remote Contract CFOs.
Accordingly, here are the Top 4 Questions for owners/operators, boards of directors, and CEOs to ask to decide whether their organization can create value by using a Remote Contract CFO or Investment Banking Kiosk (Coventry League provides both, incidentally):
All this said, Coventry League would gladly provide counsel regarding the use of contract CFOs, investment banks, investment banking kiosks, and other business related initiatives. Of course, we can provide referrals or guidance to other firms and talent–since we may not necessarily be the best fit for each and every potential client.
So, please use the contact form or our direct email addresses (email@example.com) to request more information, receive a quote, and retain our services.
And, as always, Compete Like a Champion.
Who doesn't want to strive to be a bit more sustainable nowadays? Some of the most respectable companies that have growth and profitability as goals also factor in externalities (costs on society) and the quality of life (note, this is not synonymous with ‘standard of living’) for employees and stakeholders to achieve said growth and profits. Patagonia (an interview with the founder, Yvon Chouinard) and WL Gore (maker of Gore-Tex fabric) are just two companies that are role models for others.
On a more personal level, citizens can put in place legislators who will put forth progressive policies to help achieve better outcomes for their respective communities. I particularly like to reference the policies instituted in Copenhagen, Denmark regarding bicycling (virtually eliminated vehicle street parking; imposed meaningful taxes on purchase and ownership of cars; relatively expensive gasoline; bike tracks separated by physical barriers – not simply painted lines and sharrows; etc.). Also, individuals may choose to be the change they want to see; for examples, bike to work or to do local errands, plant a garden, eat more foods that require less resources to generate, and – well, as the infographic below illustrates – learn how to compost.
A growing number of folks are becoming aware that the performance of most mutual fund managers over an extended period does not exceed that of benchmark indexes such as the S&P 500. More specifically, 99.6% of all mutual fund managers failed to beat (i.e., only 71 funds out of 17,785 matched or beat) the performance of the S&P, net of fees, over a ten year period according to data compiled from the Mutual Fund Screener of The Wall Street Journal. Please reference the entire article titled “Wall Street Is a Rentier Rip-Off: Index Funds Beat 99.6% of Managers Over Ten Years” at the blog Of Two Minds.
Talented investors are often not managing formal, traditional funds but rather managing one’s own accounts or a small number of accounts (e.g., friends and family). These individuals are more likely to fit the mold of idiosyncratic entrepreneurs or founders of technology start-ups.
Nevertheless, one of several takeaways is “don’t judge a book by its cover.” In other words, just because a money manager is nicely dressed, displays stereotypical good credentials, and has friends in high places (partly enables said manager to either procure capital or secure the fund management role), shouldn’t imply an above average talent for investing. One can present a similar case against most (not all, of course) hedge fund and venture capital fund managers, as highlighted in two Zero Hedge articles titled “Most Hedge Funds Underperforming The S&P 500 For Fifth Year In A Row - Full YTD Performance” and “Venture C(r)apital: Myth And Reality.”
Blogentaries are part original content and part commentary by Coventry League about sustainable business, structured finance, and M&A. Actionable ideas are often presented indirectly and subtly, like a puzzle!
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