President Trump came into office pledging to review and possibly roll back supposedly onerous regulations. One of his targets was the much debated Fiduciary Rule which would require financial advisers and financial services firms to act as “fiduciaries” and put the financial interests of clients first, ahead of their own when giving retirement advice. Sounds like a no brainer but critics say it will limit investor choices, cost small investors more and lead to more litigation.
Regardless, on Friday, June 9th the heart of that rule goes into effect. As secretary of labor, Alexander Acosta wrote in an editorial in The Wall Street Journal the labor department has concluded that it is “necessary to seek additional public input on the entire Fiduciary Rule”, but they also found “no principled legal basis to change the June 9 date while we seek public input.”
Back at WEALTHTRACK, this is the final week of the spring fund raising season for Public Television, so we are revisiting a recent exclusive interview about what it takes to be a great investor.
Over the years I have had the opportunity to sit down with some of the most successful investors in the business, including Warren Buffett. They are all quite different, but they definitely share some personality traits. I was reminded of one of them when interviewing this week’s guest and when reading Mr. Buffett’s most recent letter to shareholders.
Warren Buffett’s 2018 Activist Investment
Most investors are aware of Warren Buffett's most high profile long-term investments. However, there is one long term investment that is often overlooked. Q2 2020 hedge fund letters, conferences and more This is building materials maker USG, which was owned by Berkshire Hathaway for more than 17 years before it was acquired in 2018. If Read More
One common characteristic is optimism. The 86 year old Buffett has it in spades! If anything, he seems to be getting more upbeat with age. Here’s what he says about the investment environment in America:
“Our efforts to materially increase the normalized earnings of Berkshire will be aided - as they have been throughout our managerial tenure - by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago - a span of time less than triple my days on earth - Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers.”
Buffett goes on to say:
“Above all, it’s our market system – an economic traffic cop ably directing capital, brains and labor – that has created America’s abundance…”
“Yes, the build-up of wealth will be interrupted for short periods from time to time. It will not, however be stopped. I’ll repeat what I’ve both said in the past and expect to say in future years: babies born in America today are the luckiest crop in history.”
You can read Buffett’s full letter to shareholders here.
No one alive, at least that we know of, has matched Buffett’s 50 plus year investment returns, but this week’s WEALTHTRACK guest, Brian Rogers, has racked up an impressive 30 year record with less than market risk, as well as shepherding a highly respected investment firm safely through some turbulent times, including the financial crisis.
Brian Rogers was recently named Non-Executive Chairman of the Board of T.Rowe Price, a firm he joined as a portfolio manager in 1982. He recently retired as Chairman and Chief Investment Officer.
In 2015, 30 years after launching the award winning T. Rowe Price Equity Income Fund, he handed the reins over to a Co-Portfolio Manager. During his tenure its 10.7% annualized returns just about matched the S&P 500’s 10.8% performance, but it did so with less volatility than the market, offering more protection during market declines.
Over the past 20 years, and under his leadership, over 80% of the firm’s funds outperformed their benchmarks, net of fees, over multiple rolling five and ten year periods.
Rogers is a regular member of the prestigious Barron’s Annual Investment Roundtable and was recently recruited to join the board overseeing Harvard’s endowment, as he put it “giving back” to the university where he received his undergraduate and business degrees.
On this week’s program Rogers shares some of the most important lessons he has learned from 35 years of managing money and building a firm. We started with being an optimist!
We look forward to resuming our regularly scheduled programming next week. Until then, have a great weekend and make the week ahead a profitable and a productive one.