Trends & Tail Risks

Clients Are an Investment Firm's Most Important Assets

Written by Lewis Johnson | 4/6/17 7:19 PM

Chief Conclusion

Clients are an investment firm’s most important assets.  Our goal is to treat clients like the critical partners they are in the investment process.  Working together with them, is our best hope to achieve a successful outcome for our investing efforts. 

Nobody would blame you if you thought that an investment firm’s most important assets are those that go up and down in the markets every day.  But you would be wrong.  Clients are an investment firm’s most important assets. 

Believe me, I understand the allure of devoting every waking moment to the next great investment.  After all, that kind of curiosity and drive to win is a key reason why so many of us got into the business of investing in the first place.  But let me share with you a simple and woefully misunderstood truth, something it took me many years of hard scrabbling to figure out.

If your investment firm’s foundations are not built upon the rock of patient clients and therefore patient capital then your future is indeed bleak.  In fact, it’s hopeless. 

Almost twenty years in the investment research business have taught me that patience is the key ingredient in all of my best investment decisions.  I am convinced that, without patience, it would be impossible to invest successfully.  My experience as an entrepreneur building an investment management company with my partners has taught me that, without clients, there is no business. The key is to have the right clients: patient clients!

Our business is so fortunate to have been blessed with them.  My heartfelt gratitude goes out to each and every one of them.   We know how lucky we are to have found you, and that you have found us.  Our promise to our clients and friends is that we will continue to use these pages to let you know what we are thinking and how we are investing your hard-won savings.

Today’s “Trends and Tail Risks” will have a different focus.  For the first time these pages will explore the business of investing. 

Our Goal in the Business of Investing Is to Treat Our Clients like the Critical Partners They Are in the Investment Process.

When, several years ago, we co-founded the investment company that has grown to become the combined Capital Wealth Advisors and Fundamental Global Investors, we believed that there was an unmet need in the investment management business.   To our eyes, investing had lost its way.

The focus had gone wrong somehow: at the center of most thinking about the business of investing was a failed notion, promoted by CNBC and others, that investing was little more than an endlessly fascinating and wondrous game.  Our belief was that there was much more to investing than that.  We wanted to get back to “old school” investing, which meant a return to a relationship based, deeply personal business.  Clients and their needs are at the center of our business.  If investment managers can get that right then their business will never run out of growth.

A critical part of our growth has been our communication strategy, only part of which is this publication. Our goal?  To arrive together, with our clients, at a successful outcome through long-term investing.  Finding and partnering with the right clients is a vital part of that effort.  The other part is an on-going dialogue between us and our clients about our investment framework and process. We want to make sure to explain what we are doing in the portfolio and why.

Why We Write Trends and Tail Risks

Writing is a big investment of time but is one that has repaid us generously.  It’s true that writing helps to clarify my thinking about what I believe and why.  This strengthens our research process.

The publication of our thinking has also introduced me to new friends and thought leaders from all over the globe.  Many of these independent thinkers have kindly paid us the honor of taking time out of their day to reflect upon our thoughts and freely offer their own in return.  Such interaction brightens my day and is improving our research process.  It also broadens out the global network I built during my first twenty years in the research business.  It holds out the prospect for a step-function change in our insight and perspective as our global research network grows.

As important as these benefits are from writing, they pale in comparison to the chance to share a few moments with our clients to talk to them about their portfolio. 

In Conclusion

Our investment team has spent their entire careers committed to the hard work of acquiring the skills and experience necessary to excel at investing.  We also did the hard work of finding each other and gathering a team around us of incredibly smart, thoughtful and diligent employees.   We would put our team up against anyone in the business.   We are proud of the investment company we have built.   None of that, however, would matter if we had the wrong clients or if we failed to educate our clients about their investments.

Investing is a journey that we take with our clients.  We are honored to be co-travelers with them.  We will do everything in our power to make sure that our clients, our greatest assets, remain at the center of our business.•