The Partnership: The Making of Goldman Sachs
Based on 30 years as a strategy consultant to leaders on four continents and over 300 in-person interviews with senior executives, the definitive biography of the world’s most effective securities company, full of colorful people and first-hand stories, explains how a nearly bankrupted “outsider” firm stumbled badly, largely recovered, and continues to be the market leader.
Success Secrets of the Great Professional Firms
Just as Olympian athletes differ, the best firms in law, counseling, finance, healthcare, investing and auditing differ because their disciplines differ. McKinsey, Cravath, Mayo Clinic, etc. all agree on what it takes to excel. Based on 40 years of study and over 300 interviews. the seven success secrets are identified, explained and illuminated with insights and interesting stories.
Falling Short: The Looming Problem with 401(k)s and How to Solve It
Realities of practice are falling way short of the theory or promise of 401(k)s and, given what we’ve known all along about the mistakes individual investors make with their investments, we should have anticipated trouble. Now, we know, and the trouble is BIG. in this speech, Charles Ellis discusses how to fix these problems.
The median 401(k) participant has in his 401(k) or IRA only $120,000.
Participants make mistakes all along the way, not participating, not “matching the match,” not escalating contributions (ideally to 12% or more) as pay increases, borrowing, taking money out to cover expenses between jobs, buying high, selling low, leaving money in stable value, retiring too soon, withdrawing too much each year in retirement, and not anticipating late in life costs for healthcare and assisted living. Net result: $120k for 22 years.
Meanwhile Social Security is quietly and slowly decreasing benefits.
Net result: Tens of millions of American workers – unless we make changes – will have too little for the comfortable retirements they are expecting.
We can solve the 401(k) problem – if we act soon – with two changes:
1. All 401(k) plans adopt the proven “Best Practice” so all decisions are automatic – unless the participant opts out.
2. Social Security educates all beneficiaries on the major benefits of working longer. If, instead of claiming at 62, we work to 70, benefits go up….76%! And by not taking money out, continuing to add contributions, and compounding investments 401(k) payouts increase even more!
Net result: tens of millions of retirees will be shifted from “too little” to “enough” for an enjoyable secure retirement.
Success in Investing: Challenges for Investment Managers
Is investment management a profession or a business? Obviously both, the business has been so strong that it has dominated the profession. And what a business it is! High pay, fascinating work, continuous learning, and always, challenging. Investment management has attracted large numbers of brilliant, hard-working, well-educated, and intensively competitive people – all over the world. Ironically, they are so skillful that they have made it terribly hard for any active manager to beat the competition by enough to earn the high fees being charged for investment “products,” each client is expected to compose into an optimal investment program to meet that client’s long term objectives, given its unique needs, resources, and time horizon. So, clients are moving – slowly, but in increasing volume – to indexing and ETFs and “target data” funds to continue earning client’s loyalty, mangers need to excel at client communication and “value discovery,” the joint determination of a realistic investment program to achieve success in a way that matches each client’s unique situation and objectives – rebalancing profession and business by putting the client first.
Charles D. Ellis served as a director or advisor to numerous organizations. He served as a director of the Vanguard Group from 2001 to 2009, and also as a trustee of the Robert Wood Johnson Foundation. He was managing partner of The Partners of ’63, which commits time and treasure in support of entrepreneurial, change-oriented ventures in education, particularly those focused on children born into tough circumstances.
Charley’s professional career centered on three decades with Greenwich Associates, the international strategy consulting firm he founded in 1972. Recognized worldwide for the proprietary research which informs its consulting, the firm grew in the 30 years he was Managing Partner to serve the leading firms in over 130 professional financial markets around the world.
Services to the investment profession include: Chair and two terms as governor of the profession’s CFA Institute and an associate editor of both The Journal of Portfolio Management and The Financial Analysts Journal. He is one of 11 individuals honored for lifetime contributions to the investment profession.
Academic activities include two appointments (in 1970 and 1974) to the faculty of the Harvard Business School and one (in 1986) to the Yale School of Management, both to teach the advanced course on investment management, and 20 years on the faculty of the Investment Workshop at Princeton.
Charley chairs the Whitehead Institute for Biomedical Research, where he also chairs the investment committee. He has previously served as a successor trustee of Yale University, where he chaired the investment committee, as trustee of Phillips Exeter Academy and Eagle Hill School, and as an Overseer of the Stern Schools of Business at New York University. He has also served on the Visiting Committee and as a member of the Board of Directors of the Associates of the Harvard Business School.
The author of 16 books, including The Partnership: The Making of Goldman Sachs (Penguin), Joe Wilson and the Creation of Xerox, CAPITAL, and Winning the Loser’s Game (McGraw-Hill), and with Burt Malkiel, Elements of Investing (all John Wiley & Sons), Charley has written over 100 articles for business and professional journals. His article “The Loser’s Game” won the investment profession’s Graham & Dodd award in 1977. Joe Wilson was selected as one of the best business books of 2006.
A graduate of Exeter and Yale College, Charley earned an MBA (with distinction) at Harvard Business School and a Ph.D. at New York University. He is married to his best friend, Linda Koch Lorimer, Vice President and Secretary of Yale University. Their four children are Harold, Chad, Kelly and Peter.