A Quote by Kelly Evans
The billionaire founder of investment firm Elliott Management was one of several investors who warned financial ministers in 2007 that a crack in the housing market could cause huge problems for the banking industry.
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The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.
It can be argued that the U.S. brokerage and investment banking industry has transformed the modern American stock market into nothing more than a mechanism for transferring wealth from shareholders to management.
It's natural that you'd have more brains going into money management. There are so many huge incomes in money management and investment banking - it's like ants to sugar. There are huge incentives for a man to take up money management as opposed to, say, physics, and it's a lot easier.
The culture of the mutual fund industry, when I came into it in 1951, was pretty much a culture of fiduciary duty and investment, with funds run by investment professionals. The firm I worked with, Wellington Management Co., they had one fund. That was very typical in the industry... investment professionals focused on long-term investing.
Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, 'Scion Capital', that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy.
Invest in low-turnover, passively managed index funds... and stay away from profit-driven investment management organizations... The mutual fund industry is a colossal failure... resulting from its systematic exploitation of individual investors... as funds extract enormous sums from investors in exchange for providing a shocking disservice... Excessive management fees take their toll, and manager profits dominate fiduciary responsibility.
The ultimate arbiters of the models of banking and the management of banking are the investors. It's the shareholders.
We at Fidelity view ourselves just as much a financial information processing company as an investment management firm. That may not be too newsworthy.
If companies are able to raise equity from the market, then their problems for financing incomplete projects will come to end. Investment cycle in the capital market can kick-start with the money of savers and investors.
Housing traditionally is not viewed as a great investment. It takes maintenance; it depreciates. It goes out of style. All of those are problems. And there's technical progress in housing. So, new ones are better. So, why was it considered an investment? That was a fad.
Starting in the wake of the 2008 GFC (Global Financial Crisis), market observers have warned of a crash in the bond market. Initially, it was believed that the trillions printed to bail out the banks would cause inflation and, therefore, a flight from bonds.
Obsession with the market seem to prevent ministers looking at the huge problem and all its ramifications in health, education and employment that come from the housing insecurity that too many face.
There's more honor in investment management than in investment banking.
The world's biggest problems are the world's biggest market opportunities. And that's a huge thing. Solve hunger, literacy and energy problems, get the gratitude of the world and become a billionaire in the process.
We got a lot of excellent people and businesses from Bear and WaMu. But Bear definitely was more painful. WaMu got us into Florida, California, and other states, which was a huge benefit - to expand and grow and add middle-market, private banking, investment banking, and other products, too.
I don't think that the financial services industry and that banking in particular are any different than any other part of the economy, any other industry outside banking.
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