I agree with Guy Spier in his recent talk at MIT, which is the topic of a Business Insider article written earlier this year by Julia La Roche called “HEDGE FUND MANAGER: There are lots of Gordon Gekkos on Wall Street, and that needs to change.”
Guy is referring to “finance” as a field and industry. What I propose is that we stop thinking about “finance” in this manner and start thinking about “finance” as a body of knowledge.
We need more people in finance. But just not on Wall Street. We need the guy who owns the local bagel store on Main Street in finance. We need the family that owns the town’s only beauty salon in finance. We need little Joe and Sally with their lemonade stand in finance. We need every cashier who works at every Wal-Mart across the heartland in finance. We needed the factory worker who was working at GM during the financial crisis in finance. So he could come home and explain to his kids what exactly was going on – that the next paycheck didn’t simply depend on the answering of a prayer but there was an actual rhyme and reason GM was in trouble. And his kids would understand and be less scared of the mysterious, powerful man behind the green (Wall Street) curtain pulling all the strings and levers. That man does not exist. And the green curtain is the curtain of fear rooted in the absence of knowledge and truth.
Seth Klarman: Investing Is Art First, Craft Second And Science Third
It is absolutely the way the world works – finance, that is. But do enough people on Main Street understand finance and, in turn, the way the world works? Absolutely not. Our collective understanding of finance is like humankind’s pre-Renaissance grasp of math and science. It’s in the medieval ages. Look what happens when the power of math and science is unleashed in the common man? You get innovation. Creation. You get progress.
Let me be clear, we do not need more Gordon Gekkos. But, we do need more of what is in his mind. In other words, we need more of the knowledge and understanding of finance in Gordon Gekko’s mind. Because you know what, if little Joe and Sally understand how their lemonade stand can grow and succeed as a business and how and why it could someday have an IPO, wouldn’t we have more IPOs? They would know what makes their company (more) valuable. They could create the best damn lemonade company this country has ever seen.
Take the knowledge of finance that is in Gordon Gekko’s head and put it together with the goodness and humanity in the hearts of all the Joes and Sallies in America, and you just may see a revolution and a revival of the American economy, not your grandfather’s economy but a new American economy powered by masses of financial knowledge-empowered entrepreneurs.
S&C Messina Capital Management