September 11: In Memoriam

I originally posted this on the tenth anniversary of 9.11. It remains applicable today. Please note the addendum I have included below.

September 11 is one of those “Where were you?” events which, for me, also include the Kennedy assassination (my second grade classroom), Neil Armstrong’s “giant leap for mankind” (my parents’ den) and the falling of the Berlin Wall (a New Orleans hotel room).

Ten years ago I was sitting in front of my Bloomberg terminal here in San Diego when I saw a headline scroll across the bottom of my screen about a plane crashing into the World Trade Center.  Since I had been on a trading floor in the World Financial Center in 1993 trying to do a trade with a client near the top of Tower One when it had been bombed previously and remembered the earthquake-like rumble I felt vividly, thoughts of a dreadful accident involving a small private plane quickly turned to fears of terrorism and consequences that were far, far worse. 

As it happens, I still spent a fair amount of time at the World Financial Center (which is adjacent to the WTC) back then and had a reservation at the World Trade Center Marriott for September 11, 2001.  Fortuitously, I decided not to go to New York so as to attend a Back to School Night presentation.

Much has happened since that day, obviously.  We are a different country today than we were a decade ago, and not all the changes are for the better.  To paraphrase C.S. Lewis, progress isn’t always forward. But our advances are real and important as well.

The memories of September 11, 2001 linger — as they should — and still offer lessons for those of us who remain.  But today, first and foremost, let us remember those who died that day and honor their memories.

2013 Addendum:  I have visited The National 9/11 Pentagon Memorial and the 9/11 Memorial in New York City multiple times.  Both Memorials provided experiences that were both moving and powerful.  I encourage all of you to visit them. Other personal 9.11 stories worth reading are here and here.  My 9.11 pieces relating to markets and our behavior are here and here.


50 Years Ago Today

SaluteI was sitting in Mrs. Russelo’s second grade class on that Friday afternoon when the announcement of President Kennedy’s assassination was made by the principal over the loudspeaker. I walked home in silence. It was a dreadful time. I came home from church on Sunday to see Lee Harvey Oswald shot on television and later saw the funeral parade. Mostly lost in the madness was that C.S. Lewis and Aldous Huxley also died on that day…exactly 50 years ago.

‘Kennedy Has Been Shot’: Memories From Nov. 22, 1963

“I Have a Dream”

Martin Luther King gave the most famous speech of the 20th Century fifty years ago today as the final speaker at the March on Washington.  It is a day worth commemorating and, even more so, he is a man worth remembering. Dr. King was committed to keeping his remarks to about 10 minutes.  He had completed his prepared remarks in about that time when the wonderful gospel singer Mahalia Jackson, who had sung earlier and who was sitting behind the podium, called out asking Dr. King to “tell them about the Dream,” referring to remarks she had heard him use in smaller settings.  Believing he was led by the Spirit of God, Dr. King obliged and that improvisation turned an excellent speech into history.  

99 Years Ago Today

Gavrilo_Princip_captured_in_Sarajevo_1914It was 99 years ago today, on the morning of June 28, 1914, that Archduke Franz Ferdinand was assassinated by Gavrilo Princip in Sarajevo — an act that became the cause of World War I.  Princip’s capture is shown in the photograph, right. As recounted in Mark Buchanan’s terrific book, Ubiquity, the shooting came about because the driver of the Archduke’s car made a wrong turn off a main street and into a narrow passageway, pulling right in front of Princip, a member of the Serbian terrorist organization Black Hand. Princip recognized the passengers, drew his pistol, and shot the Archduke and his wife dead.

The resulting chain reaction proved catastrophic. Austria began planning an invasion of Serbia. Russia guaranteed the Serbs protection.  Germany offered to help Austria if Russia jumped in and so on.  World War I was on. Continue reading

In Memoriam

Martin Luther King was assassinated 45 years ago today.  It is a day worth commemorating and, even more so, he was a man worth remembering.

I Have a Dream

Note:  The cellphone was launched 40 years ago yesterday.  It’s interesting to consider the relative impact of both Dr. King and our most ubiquitous technology and what that comparison says about our culture and our future.

Profit and Principle

Character is revealed by what we do when we think that nobody is looking and by what we choose to do when we think we can get away with it.  Sadly, what is revealed is all too often disappointing and dreadful in the extreme.

The new issue of Smithsonian magazine features an article entitled The Dark Side of Thomas Jefferson.  In it, historian Henry Wiencek contrasts the public (and publicly depicted) Jefferson with how he actually lived and ran his homestead plantation, Monticello.  The article is based upon his forthcoming book and predicated upon new archaeological work at Monticello and upon previously overlooked or disregarded evidence in Jefferson’s papers.

Unlike earlier portrayals — erroneous due to some combination of confirmation bias and the desire to sustain the Jefferson legacy (he penned “We hold these truths to be self-evident, that all men are created equal,” after all) — Wiencek suggests that, to get at the truth of Jefferson’s character, we must simply follow the money. 

Jefferson the spendthrift made a success of his debt-ridden plantation thanks in no small part to what he calls the “silent profits” gained from his slaves. He financed the building of Monticello via a credit line that used his human chattel as collateral.  He caused young slave boys to work at making nails (and allowed them to be whipped when they were “truant”) because the profits paid his grocery bills. Parents are divided from children — in his ledgers they are recorded as money — and escapees are recaptured and sometimes dealt with severely. He owned over 600 slaves during his lifetime and freed exactly three of them.

In essence, Jefferson reneged on his stated principles because his human assets provided a perpetual and predictable dividend at compound interest:  “I allow nothing for losses by death, but, on the contrary, shall presently take credit four per cent. per annum, for their increase over and above keeping up their own numbers.”  Indeed, it appears to have become his favorite investment strategy.  Jefferson advised that “an acquaintance who had suffered financial reverses ‘should have been invested in negroes.’ He advise[d] that if the friend’s family had any cash left, ‘every farthing of it [should be] laid out in land and negroes, which besides a present support bring a silent profit of from 5. to 10. per cent in this country by the increase in their value.’”

Nearly all of us like to think that we will do the right thing when tested.  But, far too often, we don’t.  In our business that includes big problems like insider trading and Ponzi schemes.  But it includes smaller stuff too — like selling a higher paying product that isn’t as good simply because we can or even “liking” a product just because it pays well.  Fiduciary status should help some, but it’s no panacea either.  For example, I suspect that the “annuity puzzle” (why income annuities are used so much less than economists think they should be) is due in large measure to advisors failing to advocate for them because their use provides small compensation and advisors lose control of the money so invested.

Even otherwise great men often put profit before principle.  I hope I have and will have the strength to do better every time I am faced with similar challenges.