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- [00:03]
A
You're listening to A Book With Legs, a podcast presented by Smead Capital Management. At Smead Capital Management, we advise investors who play the long game. You can learn more@smeedcap.com or by calling your financial advisor.
- [00:21]
B
Welcome to A Book with Legs podcast. I'm Cole Smead, CEO and Portfolio Manager here at Smead Capital Management. At our firm, we are readers and we believe in the power of books to help shape informed investors. In this podcast we speak to great authors about their writings the late, great Charlie Munger prescribed. Using multiple mental models and analysis. We analyze their work through the lens of business markets and people. Hosting this episode along with me is my colleague and an analyst here at Smee Capital Management. Will, thanks for joining me.
- [00:53]
C
My pleasure Cole. Great to be with you.
- [00:55]
B
What are you looking forward to today? I have some things I'm looking forward to, but you brought this book so I got to give you a lot of credit, hence why you're sitting here with me. Is there anything in particular that you're
- [01:05]
C
excited to talk about with Justin as an employee at a long duration family owned active management business? I'm curious to get Justin's thoughts on how we too can build a long duration durable franchise in the investment management business owned by a family.
- [01:24]
B
I thought about that too if I asked Abby, Is that why a family starts with an F? So we'll get rolling here. Today we will discuss the rise of one of the most influential financial institutions in American history and the family that built it. We will explore how Fidelity helped invent modern retail investing as we know and practice today. We'll talk about things like the secular market cycles that shaped its strategy during its history as a business and and the succession dynamics that define three generations of Johnson leadership. Justin Baer is joining us to discuss his recently published book House of Fidelity, the Rise of the Johnson Dynasty and the Companies that Changed American Investing. I'm going to give our listeners a little background on Justin. He is an award winning journalist and a deputy Markets editor at the Wall Street Journal. In his career he's had stints at the Financial Times, Bloomberg News. He's covered many significant financial events going back 25 years, including the dot com bubble, the 2008 financial crisis and the economic fallout from the pandemic which we all got to recently go through in the last few years. Along the way, he has also chronicled the ups and downs of such institutions as Goldman Sachs, JP Morgan, Citigroup and Berkshire Hathaway. So this will be nothing new for someone with his tenure. He holds A master's degree from Northwestern University, good journalism school, by the way, and lives in New Jersey with his wife and three children. And Justin, thanks for joining us today.
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D
It's great to be here.
- [02:51]
B
So I often ask this question to kick us off, but what got your mind going on Fidelity, the Johnson family. You have elements of other books. For example, I know we'll talk about the go go 60s at some point. There's Pieces of John Brooks. Awesome book. And John Brooks was a great name in journalism in the New York in the 1960s. But other than touches like that from some of these great writers that you obviously mentioned, parts of their work in your writing, what caused you to say, okay, now it's time to talk about Fidelity and how we got here?
- [03:24]
D
Yeah, I would say probably two parts of it. One, I kind of had for a long time wanted to do something like this. As you know, I covered a lot of big financial firms and many of them there's a small library devoted to histories of those companies. And so at the end of the day, when you write a book, you have to pitch it and you have to get someone to buy it. And it didn't seem to make a lot of sense in many cases for me to write yet another book about J.P. morgan or Goldman or any of those places. And it's going back maybe six or so years. I picked up coverage of Fidelity and some of the big asset managers. And Fidelity, as a reporter, is a little bit of a different animal. It's a private companies I know we'll talk about run by a family. And there hadn't been quite the same degree of attention and coverage on what they were doing behind the scenes. Everyone had heard about Fidelity. Their accounts were somewhat familiar with some of the famous portfolio managers they've had over years, but there hadn't been anyone since really the early 90s that kind of pulled it all together. And I was covering them. And I would, I love telling the story because really gets at how I was feeling at the time. You know, I would reach out to people who'd worked there over the years, and occasionally they would tell me some, some story that I had never heard before. And I would, after I got off the phone, I would do some digging and I would see it after it had been reported and, and in some cases it hadn't. And. And then I would talk to someone else who might have worked there at the same time, and I would say, hey, did this, this is what I described. Did this happen? And they would kind of pause and they would Say, well, Justin, you know, of course it did. Like everyone knows that. And I started to think, and it happened enough times, so I began to think, well, no, not everyone knows that. And, and they, you know, being in this, in this business up in Boston, that was private. It was fairly insular. And they may know the story very well, having spent so much time there and worked there for a long period of time, but much of it had not sort of pierced that bubble and gotten out to the broader world. And, and that was certainly true when I was covering them and getting to know them. There was a bit of a disconnect between what I learned was happening in terms of some of the big shifts that were happening within their businesses and what the outside world really understood. Even people that were senior execs at some of their competitors or vendors or customers, they didn't quite know what to make of Fidelity at that time. This was a period where the popularity of the index funds was reaching its peak and people were kind of still looking at Fidelity as they might have 10, 20 years ago, which was one of the big prominent players in stock picking exit funds. And there wasn't a sense by them that they had really moved off of that. Right. And behind the scenes they in fact were. And we really saw that, you know, a few years later, particularly coming out of COVID where they really, you know, their growth, by all metrics, just sort of explodes. But back then it wasn't, it wasn't entirely, you know, clear to even people who knew this industry really well. So all those reasons, I just sort of said this seemed like a great story. And then it became the question, am I up to telling it right? Am I going to be able to get this story that I know is out there hiding in plain sight?
- [07:28]
B
Yeah. You mentioned this in your book. Oliver Wendell Holmes Sr. Coined the term Boston Brahmin. Teach our audience about the old line business, Boston, pardon me, Boston business culture and how this business, you know, Mr. Johnson, you know, you know, came from it and you know, it's, you know, from what I know of Boston, it's a very local place, local culture. How do you not only come from it, but then also break from it?
- [07:57]
D
Yes. So this best definition is just it was a group of generally well to do families that had been in or around Boston for at that point, even centuries. Right. And they held positions of prominence and a lot of the professions that you would imagine would be highly respected. Right. Ministers and professors and judges and folks like that. And the Johnsons, they, for many generations, they owned this department store in downtown Boston. So that was the source of their. Of their wealth, and they ultimately sold that business a generation before Ted Johnson embarks on his own career. And so that's significant because there were quite a few, quite a number of obligations. Right. If you were born into a family that had that sort of business, that the expectation would be you would go and work there for the rest of your life. And Ted's father did do that and for much of that period, really didn't like it and sort of resented this tug of that he had from his family to stay there. Sure. And ultimately, you know, he and the generation, his generation sold the business and just in time for Ted to sort of be able to kind of go his own way.
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B
Sure.
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D
And it didn't seem like he was destined to where he ended up. At first, he went to Harvard College, ended up going to Harvard Business School, and then transferred over to the law school, you know, and about halfway through, it seemed like he was destined to work at one of the white shoe law firms that had offices in Boston. And their clientele were other prominent business leaders, respected business leaders in town, and either managed their estates or, you know, offered counsel to their business operations. And so it wasn't really until Ted read this book that came out, I think in 20, 19, 24, and he's a law student and he's getting ready to go to his, you know, the summer before his last year there, and he reads it and his whole. He's just so riveted by this thing. The book is reminiscent of a stock operator.
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B
Yeah.
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D
Famously based, loosely based biography of Jesse Livermore, who is at the opposite end of where you put the Boston Brahmins.
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B
Well, it's more like the degenerates nowadays that like, oh, look, I can make money in the stock market and here's a trader that I can follow. And I mean, it's more, you know, to your point, that era of the twenties that he's in is more, you know, it ended up being more like today than it was like the 30s or the 40s, for example.
- [11:27]
D
Right. And even by those standards, Livermore was a wild man. Right. I mean, he was famous for you know, taking these incredibly all in risky bets that made him a lot of money and then he would probably lose his fortune again and then he would win it all back and then lose it again. He married a showgirl. And the whole biography is such a far cry from what the world that Ted Johnson was from and entering. But he's completely smitten by this and this idea of being playing the market. And he does end up going to work at a law firm, but within a few years gravitates toward the financial clients they have. And in particular, one of the firms that had been a pioneer in launching the first open mutual funds.
- [12:35]
C
You described Mr. Johnson's seances and his belief that stock picking is like an oil painting. How did that intuitive culture survive the transition to Ned, who was much more mechanical and systems minded?
- [12:48]
D
Yeah, there are still elements of it, I would say, Ted. One element that he really believed strongly in, that remained in place and to a certain extent still remains true today, is this idea that managing a fund is a solitary pursuit and it's one person and they may be successful, they may not, but it's a work that is, you know, comes out of an individual's brain. Right.
- [13:20]
B
Well, it's what they call the star system. Right. You know, it's like the star pm, like in the kind of as you talk about, you know, even the stars to today. But to your point, it is not like committee. This is not pitching by committee. There's one individual and they're the artist, if you will.
- [13:36]
D
Exactly, exactly. And it's a way of life. Right. And so his philosophy was to that extent stayed on certainly through Fidelity's history. It's evolved from where it was before. But that was sort of a core belief that he had in the way money should be managed.
- [14:00]
C
Teach us about the go go 60s and the first true retail mania of the post war era and why Jerry seize fast turnover growth style was perfectly suited to it.
- [14:10]
D
Sure. I think. The market really hadn't seen anyone quite like Jerry when he burst on the scene and he kind of hit on one of the big reasons for that. He was essentially in a momentum trader and he would, he would make these, you know, he would go all in on one stock and he would, you know, in very sudden movements, you know, decide and switch out of, let's say Ford and then maybe buy a big block of stock in General Motors. And you know, this was a period, you know, some similarities to today. He was a growth investor. And that was a period in American history where people were very excited about growth stocks in general and specifically tech stocks. Now tech stocks from that era are Polaroid and Xerox. And people look back and they say
- [15:24]
B
the onyx going to the moon, you know, not going to Mars, mind you.
- [15:30]
D
No, but, but that was definitely in the air and there was a lot of enthusiasm. And you know, this goes back, you know, go back to the maybe mid-50s, but it really sort of peaks in this period. And everyone wants to know what Jerry Sy thinks, you know, what stock is he buying now? What is he selling?
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B
Sure.
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D
And it really helps not only establish his own celebrity, but really puts Fidelity on the map, not only as a manager, but also as a place that recruits and develops star investors at a relatively early age. That was also something that was the case even back then.
- [16:14]
B
Yeah. And I don't think this is in your book, but just to give some listeners context, the 60s were such an explosion of stock trading in general, to your point, Justin, that they used to close the market on Wednesdays to settle the paper trades because they couldn't. They just. The volume was too big. And there's a lot of stories about brokerage firms failing because they couldn't settle trades. So, like, their equity capital was nil because they were eating their equity to try to get trade settled. So just crazy stuff came out of that. Ultimately, you know, this is going on. Jerry size being wildly successful, putting up massive numbers. You talk about Buffett talking about some of that during the 60s in his partnership letters, for example, which I thought was great as kind of color. Mr. Johnson had. Ted had handed Cy the rope to hang himself with, as you put in your book. But ultimately, blood was thicker than water, and Ted didn't end up handing the reins to Cy at the end of the day.
- [17:17]
D
Right. And it should be noted that even as Cy is enjoying his peak popularity, he is outperformed by another Fidelity manager, which made that succession plan a lot easier to sell internally. In that Ned Johnson, who managed his own growth fund starting in 1961, begins to outperform and then outsell. Jerry sighs. Which is, you think about it like, how. How popular Cy was in that period.
- [17:49]
B
Yeah.
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D
Up until the point he leaves in 65. And Ned had a better track record. And so, you know, Jerry, I think, you know, talking to people that knew him, he kind of saw the writing on the wall. Right. But he needed an answer for himself. And he goes to Ted Johnson one day and he says, well, you know, I've, you know, and at this point, Jerry is, you know, he owns voting shares, so his success has been acknowledged. But he wants to know, am I going to be your successor at some point? And Ted tells him very gently, well, no, this is ultimately a family business, and it's going to be net.
- [18:41]
B
Hi, I'm Cole Smead, CEO and portfolio manager here at Smead Capital Management and host of this podcast. If you enjoy this podcast, I'd like to invite you to check out smeedcap.com at our firm. We are stock market investors. We advise investors who play the long game with a discipline that has proven success over long periods of time. Learn more about our funds@smeecap.com past performance is not indicative of future results. Investing involves risks, including loss of principal. Please refer to the prospectus for important information about the investment company, including objectives, risks, charges and expenses. Read and consider it carefully before investing. SMEAD funds distributed by SMEAD Funds Distributors llc. Not affiliated. So he, you know, he ran the Fidelity Capital Fund while he was at Fidelity and became famous for that. So he leaves Fidelity and he steps out to raise what we now know as the Manhattan fund in 66. Okay, you know, can you just give us a picture of like, when you're going to raise a fund in 1966, you know, how do you raise that? You know, are there loads on it, things like that? Because he ended up raising, I think originally he wanted to raise $25 million was to get off the ground, which would have been a big fund at the time, frankly. And he raises 10 times that, I think is what you said in your book.
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D
Right, right. And then they close it and then they sell more shares a few months later. Yeah, it was a spectacular launch by any measure. It was all, obviously at that point, all Jerry and his reputation and his success. Back then, I don't think they would have had any. No load funds. This would all have all been sold through brokers. Like that time. All the Fidelity funds would have still gone through brokers, distributors. And he is off, off to the races. Right. And his, and his, if, you know, he ends up becoming even bigger celebrity in that. In that period.
- [20:42]
B
He puts up some good money. But then things don't stay for long for him.
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D
No, no, he. He does really well at first, but it's pretty remarkable. Like, his sense of timing was always perfect. And so then when he gets an offer to sell his firm, he takes it and it's at the very within, I think, a few weeks of. Of the absolute top.
- [21:18]
B
And that was. He sold that to CNA Financial.
- [21:20]
D
Is that who he sold it to in 68. And essentially at that point is no longer a portfolio manager. He ends up staying at CNA for a while in an executive role. Observe strategy. But he's essentially retired as a portfolio manager at that point.
- [21:43]
B
Yeah, when he's such an operator that I think his history goes on. He becomes the chairman of American can, turns that business into what we later know as Primerica and then sold it off to Sandy Weill at a later date too. So Jerry, to your point, Jerry, Sy, his history, just in and of himself, is like one of the great entrepreneurial American histories for someone who came from Hong Kong.
- [22:06]
D
Yeah, his story is amazing. His mother was really endlessly fascinating figure that I knew very little about, who was a trader on the Shanghai Stock exchange in the 40s. And her earnings ends up paying for Jerry and his sister's education. But more than that, her trading tactics essentially become the blueprint of what Jerry did at Fidelity. He wasn't the only investor in those days to pioneer momentum style trading, but he was extremely prominent. And he kind of owes it all to his mother. And she ends up staying really his most important advisor and emotional rock for the rest of her life.
- [23:09]
C
In the aftermath of the go go 60s, from 1973-82, stock funds were virtually unsellable. Ned took over in the mid-70s. Why did he expand the money market product when his core product was dying?
- [23:25]
D
Yeah, he probably would say he had no choice. There was. And of course, no one knew that it would take almost a decade for stock funds. In fact, he later would joke that if I don't it's going to take that long, I probably would have done something else entirely. But he throws out a lot of different ideas. And yes, so jumping into the money market fund business and putting his own spin on that was very successful. Through the money market fund, he begins to sell directly to consumers.
- [24:14]
B
Because before that they were all brokerage products. They were using the Merrill lynch, for example, you talk about in your book.
- [24:19]
D
Yep. Yes, but brokers did not want to sell. They didn't want style stock funds. And the fees they would have got on a Monday market fund would have been a fraction of that. So this was not going to work really, as a broker sold product. And so that leads them to initially sell money market funds directly through consumers. And then a few years later, they begin to roll this out for. For many of the other funds, including the stock funds.
- [24:52]
B
But they were still rolling out other stock fund offerings during that time. Yes, they got the money market fund platform going, but the idea at the time was still like, let's find new strategies to go out and sell.
- [25:04]
D
Sure, definitely that. And they started selling bond funds at that point as well. And that was another. A lot of that was driven by this idea that we need to diversify. And so they made a lot of moves into venture capital and private equity at that moment, with the fall of the peg on stock commissions in 75 they follow Chuck Schwab and a few others into, into retail brokerage. And a lot of those things were again were initially there to help keep the lights on for however long. The stock fund business was going to be in the doldrums then surprisingly some of those business end up becoming significant. Far more significant than they ever dreamed they'd be in the decades to come.
- [26:12]
B
Sure.
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C
On that note, Ned built the discount brokerage NFS Clearing and the IRA business between 78 and 82. Was he prescient or just lucky? The bull market arrived right as the infrastructure was ready.
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D
As with all these great successes, there's always a fair amount of luck involved. I think part of it was there were some very significant legislative actions that open the doors to both IRAs. Well, I mean if you go back to 75, the, in the introduction of you know, the SEC rule getting rid of the peg on commissions. That's one. And then.
- [27:02]
B
Yeah. Negotiated commissions. Yep.
- [27:04]
D
And ERISA a few years after that and then you had the introduction In I think 1981 of 401k provision and tax law. All those things would make monumental, would open up these monumental opportunities for Fidelity and others to jump in. And so they definitely, they took advantage of those and they came along right at a great time for that. In other cases, there were other decisions led to, to those successes. In the 70s Ned grew very frustrated with the level of service that the outside custody banks provided to their funds and their fund customers. They would always get these complaints, why is my statement missing? Or why is it number screwed up or it came late or whatever. And you know, Fidelity would have to explain, well, you know, that's a service that you know, one of the outside, one of these outside banks like State street provide. But customers didn't really want to hear that. You know, their statement says Fidelity on it. They thought they were, you know, Fidelity was managing their funds. So they ultimately decided to take all that work in house, which again very unusual, very expensive event. All the, all the banks, particularly those in Boston thought they were crazy to do it, that they'd be crawling back to them in a few years saying I'm going to spend all this money on these stupid computers. They're not going to work as well and you're going to come back to us anyway.
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B
Sure.
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D
But that allowed so that gaining comfort of that degree of process, back office process made it much easier for them to say jump into becoming a record keeper on retirement accounts and things like that.
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B
And you mentioned like DST in the book, right? Which I think I never knew what DST stood for. I assume it was some acronym and it was much simpler than that. It was like data assistance or something. It was something small like that. We worked with dst. I think it's now part of ssnc, used to be a joint venture. They're gone now as a publicly traded company. So the other thing too is as practitioners and people that use service providers in the industry, it was like, gosh, I've always wondered what that stood for.
- [29:29]
D
There you go.
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B
So there's parts of this book that as someone that like, interacts in this world, we appreciate a lot. I'm going to kind of touch at this. You know, we just mentioned kind of the structural things. Peter lynch comes to the fray and the fold right at just an opportune time. I mean, the bull market of 1980 is going to take off. You have someone who, all to Peter's credit, he's an optimistic guy. He thinks the world of capitalism and entrepreneurialism and really markets. Back to your point with Ted, originally with reminiscence of a stock operator. Is it just a bright young entrepreneurial person just at one of those right times, or do you think there's really more to Peter because, like cyber. Someone could say that Peter left at a really good time for his legacy.
- [30:17]
D
Yes, I would say definitely more to him. People who work alongside him and with him over the years would say he was by far the hardest working person they'd ever worked with.
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B
Sure. And you have a picture of him in the book where he's got paper stacks, it's got a famous picture all over.
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D
And, and he, you know, it was really very simple. Right. You know, he, he would go around the country and he would dig into all these companies and these stocks and he would try to figure out what made them work and his ideas might come from, you know, he, he thought the food at Taco Bell was really good, so he bought their stock. Right. He, he, his wife marveled at legs, the stockings you could buy at the supermarket. And so he bought stock in that company. But he was just relentless and would go and would spend so many days of the year on the road and he would spend, he would manage his day so that he didn't. It was just. Maybe this story is one that he shared, but I just thought, spoke a lot about the way he approached his job is that he would avoid going to the men's room on the same floor as where his office was, because in doing so he'd have to pass the main Lobby and he just didn't want to spend because he knew if he showed his face there, there would inevitably be someone, probably a management team that wanted to be Peter lynch and talk to him.
- [32:00]
B
That's funny.
- [32:00]
D
Talk about stocks. So he would sneak out this back stairwell to go to the one on a different floor where he could avoid everyone. The reason he did that is because he wanted every minute of every day to be focused on his work and analyzing these companies and these stocks. The reality was his fund, Magellan, because it was successful, so successful going back, I think he's picked it up in maybe 78. There was just so much money flowing into this one fund. And he would hear people criticize how quickly it had grown and how many billions were now in there. And the skeptics who would say, well this is too big to manage now. There's no way you're going to be able to maintain that level of performance. And so it just sort of drove him to work even harder and to find, because he did, he had to find more stocks that were going to work if the fund was three times bigger than it was, you know, two, two or three years earlier.
- [33:10]
B
Sure.
- [33:10]
D
So I would say that that's kind of his, his. One of his biggest, you know, biggest reasons for his success was just this, this unparalleled work ethic and, and, and his ability to do that for, for however long, 12 years or so as, as he was running what was the, you know, even, even within Fidelity and even the people that were, were running Magellan, which continued to grow after he retired from management. It was just a, a very, very stressful job. You had so much attention on you at all times and not everyone could handle that for very long. And Peter had done it for over a decade. So I think that another reason why he was unusually successful in that.
- [34:04]
C
Teach us about the Fidelity school of stock picking and portfolio management. What are the non negotiable of that? House style.
- [34:12]
D
Yeah. So that had to change in, you know, we mentioned the 401k business as that becomes such a dominant force in investing and so many, you know, Fidelity and other managers were originally interested in managing those platforms in part because it would be a great place to sell mutual funds. Right. So over you go through the 80s and that the money that's coming in from those retirement accounts becomes a sizable chunk of the assets within these funds. So that, that forces them, you know, a couple things go sideways for them in the 90s and it really forces them to really reign in some of the sort of Free rein that portfolio managers had there in the past, going back to the Jerry Sy era. And so suddenly you had to very much stick closer to the mandate for your specific fund. You couldn't do things sort of way out there. You had to be more mindful of what the indexes were doing. It really kind of in part because there was concern that this is retirement money. There are consultants involved, you could get sued. Right. I mean, the prospects of litigation in that market becomes an issue as we get into the 90s. So for all that reason, for all those reasons, the culture of portfolio management changes. I would say some areas it's remain the same is this idea that it can be one person job. The structure they have is very similar. And you have individuals, generalists, portfolio managers, and then you have teams of analysts that cover either industries or work directly for that fund or that, say, style of fund. There's the growth funds and the value funds. All that is still very much alive today.
- [36:31]
B
Sure. Ned curated an extraordinary stable of investors. How did they select for talent and keep these people productive? I mean, as I think back, you're telling the story of Tillinghast and Danoff as young analysts, for example, I mean, they're now retired in the last five years, but I mean, they were there for a long time. How did they take these people and bring them in and then cause the longevity that we saw with their careers?
- [37:00]
D
Yeah. So I think what made the place very appealing, first and foremost was that you would be managing money possibly at a very early age. And they did that through. They brought back the concept of the sector fund. So that if you were an analyst, let's say you were covering, let's say you were. Abby Johnson, for instance, when she joins the firm and is an analyst covering telecom. So within a year or so she's able to manage her own specialized mutual fund that owns only telecom stocks.
- [37:39]
B
Sure.
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D
Right. And so that gave people an opportunity that they may not have elsewhere. You know, obviously having someone, you know, like Jerry Sy and especially Peter lynch around was a huge magnet for people who wanted to do that. Right. And you think about the, you know, coming out of a period where we're working on Wall street in finance in general was not as attractive. Suddenly you get into the 80s, markets taking off and, you know, this is the, this is the yuppie era. Right. And you have people that are very excited about the market again. And the biggest, biggest star is Peter Lynch. So why not, you know, look for an opportunity to work alongside the guy and then maybe be the Next, Peter Lynch. That was very alluring and had been for a long time. Will and Joel come in that environment, early 80s when things are really starting to boom again.
- [38:45]
B
Sure.
- [38:46]
C
When the market crashed in October 87, lynch was famously on a golfing vacation in Ireland. He came back and aggressively bought that dip. What does that moment tell us us about Lynch's temperament versus the average fund manager?
- [38:59]
B
Well, and to add to that too, Justin, is there any truth that Fidelity exacerbated the morning crash of 87?
- [39:08]
D
So that is, I mean that was a key takeaway of the government's report, the Brady Commission Wedrock Brady Commission report. Very explicit. Well, they don't name Fidelity by name, but based on the size and scope that they give for this one, essentially investment manager, it's very clear that they were talking about Fidelity. In fact, even that day, that Monday, Fidelity tried to get ahead of that. It made it clear that yes, we were very active in selling, but we did that. And they argued that we did that because that was what our clients wanted them to do, that they would turn it out of the market. So that was true. I mean, I think they, you know, in the, in after that report came out, the Fidelity folks, I think chagrined a little bit by some of the data and they would argue no, it wasn't that much and it was, you know, you know, but I think the substance of it was spot on.
- [40:20]
B
We hope you're enjoying the podcast. You know, we work hard putting together this show, but we work even harder for our investors at SMEAD Capital Management. At smead, we believe in disciplined investing, which is why the SMEAD funds have a proven track record of long term outperformance. If you're an investor who plays the long game and want to invest in wonderful companies to build wealth, we invite you to visit smead. Past performance is not indicative of future results. Investing involves risks, including loss of principal. Please refer to the prospectus for important information about the investment company, including objectives, risks, charges and expenses. Read and consider it carefully before investing. SMEAD funds distributed by Smead Funds Distributors llc. Not affiliated. You point in the book like Will was just asking. Lynch was a buyer and started taking advantage of the following days because the aftermath, you know, was more than just that. Monday.
- [41:13]
D
Yes, definitely, definitely. And yeah, and very, you know, true to character. Right. I mean he, he was looking at these companies, you know, from bottoms up basis and they were at selling at cut rate prices. Right. So it's just seemed, you know, he was, that's what he did, you know, that was his job. And even before he was managing the Magellan Fund, he was head of, he was head of research at Fidelity. That's how he kind of got the spotlight in the first place.
- [41:45]
B
I remember at the bottom in 08 09, someone had asked lynch, he was quoted, you know, back then, you know, are you bullish? And he says, I'm not a good person to ask because I'm always bullish. Which I just, it's like very indicative of him, you know, as someone that studied like the industry of investment management. How do you look at the star manager system of say, Fidelity against capital groups like multi manager, multi sleeve system? Do you think it's just a different investor type? What do you attribute the success of really both to?
- [42:19]
D
Yeah, it's, yeah, I mean very clearly those two firms were wildly successful. Right. Going their own, growing their own path, you know, and you can throw at others like Wellington that, that, that, you know, different variations. PIMCO has their, their own and all, but different, different system. The way they manage, they manage funds. It is, yeah, you, I, I, I, I couldn't tell you one which one is better than the other.
- [42:51]
B
Right, Sure.
- [42:52]
D
I think it, you know, I think, I think they probably, that each of those styles probably draw a different group of people. Right. I think they might, people might naturally gravitate toward one style versus the other.
- [43:10]
B
Sure.
- [43:10]
D
Whether having a team approach or more individualistic, you know, there are pros and cons for sure. Even the Fidelity. There have been moments in their history where that has produced a very hyper, hyper competitive and not always pleasant environment where portfolio managers are fighting against one another more than maybe the market or the competitors at Capital. But again, both have been wildly successful.
- [43:44]
B
Sure.
- [43:45]
C
The tech bubble broke careers at Fidelity in both directions. Jeff Vinick on one side and George Vanderheiden on the other. How did the firm navigate 99 to 2002? Was Abbie's elevation in May of 01 connected to that wreckage?
- [44:00]
D
How did they navigate it? It was not a great time, frankly for Fidelity. I think performance wise within their funds and internally. There were certain things that were bubbling to the surface at that moment. They were, this was a period where they really, there were people that were starting to leave believing the grass was greener elsewhere.
- [44:29]
B
Sure.
- [44:31]
D
You know, not only hedge funds which were, which were kind of coming into their own at that point, but also even competitors of Fidelity. So that was hard for I think Fidelity folks to, and particularly the Ned and the Family to come to terms with. Yeah, George was, he knew what was coming and he was early in that. And it really, you know, he ended up leaving before his warnings came to be.
- [45:04]
B
Well, and I think you pointed out outside of his office he had a whiteboard and he wrote on their tulip bulbs for sale, which I never heard that. That was such a great little detail in your book. But we also think back, like, George Vanderheiden got thrown out. Julian Robertson gave up in disgust and kind of threw his hands up. And then the other guy was at Harris, Robert Sanborn got thrown out for now, obviously, I don't know why my brain's going stupid. The lead manager at Oakmark, Bill Nygren. Bill Nygren took over. That all happened within like 90 days of each other. So George is like fighting the good fight, trying to preach a different message in Fidelity. And that just wasn't. That was not accepted for that era.
- [45:49]
D
Yeah, yeah. I mean, I think he could have. He could have probably stayed and could have, but it was very difficult. Right. Because his funds were underperforming dramatically. Right. In that one snapshot of time. And of course, no one knew then when things would reverse course. Right. And it happened to be, you know, kind of very soon after he decides to hang him up. Yeah, yeah. It was a very difficult. A very difficult period. Abby's rise into that role really had kind of more to do with the squabbling that was going on inside of Fidelity at that moment, principally between the guy who was running Asset management, Bob Posen, and Abby and folks that were very close to her. Bob was Fidelity's general manager or general manager, general counsel for a long time. And he had really saved Fideli's bacon on a couple big things, helped them launch the. The donor funds that were revolutionary and then help them get through the sort of post crash drama that had unfolded and the blame game that was afoot then and a few other things. And so he was highly successful and very closely close advisor to Ned. And he was a bit of a flight risk because he was very close to the Clintons. He had gone to law school with them. And so soon after Clinton is elected, Bob seems to be in the mix for a couple different jobs in the administration.
- [47:54]
B
Sure.
- [47:56]
D
And then he. There's one where he actually seems to be the choice. And rather than lose him, Ned promotes him to what's essentially the second most important job in Fidelity, which is run the funds business. So he's there and he makes a lot of changes. This is in the wake of the Jeff Finnick period. And I mentioned some of them. Right. Really bringing more you know, guardrails around the way portfolio managers manage their funds.
- [48:31]
B
Sure.
- [48:32]
D
So obviously not something that those people really wanted to see happen. And there was always tension also, because in part, you know, Bob was not a former investor. Right. He was a lawyer. And, you know, how dare he tell these guys what to do? Right. And so Abby moves into management with post disappointment, and she is managing one sleeve of the funds on the executive side. Right. Not as a manager. And she becomes the sort of sounding board to all these portfolio managers and analysts that are irritated with what Bob is telling them to do. And so they would go to her office and they would say, you know, Bob, he wants us to do this and he wants us to do that and try to get Abby to say to them, don't worry about it. You don't have to do it. Right. So you can imagine that happens enough time and you're running this business. And Bob, of course, is Abby is reporting to her. And above him in the organization is Abby's father. So it's a little bit of a fraud dynamic to begin with. So, you know, after a while, you know, the sort of tensions begin to bubble up and they have to make a decision. And Ned decides, okay, well, this is Bob's, you know, we got to move him out of the role. And. And that's at that point they. Abby gets promoted to run the entire business.
- [50:08]
B
Yeah. The other thing that's going on, a dynamic that you talk about is obviously Fidelity is big. Everybody knows that the asset management business, when done well, can be a very profitable business for the owners.
- [50:19]
D
Sure.
- [50:20]
B
So you talk about in your book when Jim Cramer in 97 wrote a worth piece called how to Fix Fidelity.
- [50:26]
D
Yeah.
- [50:27]
B
In a magazine that obviously Fidelity owned. Which is awkward. I think of, you know, I think of how many newsletter writers wrote about Fidelity funds. I mean, that was a whole sub industry that like a lot of RIAs in the Northeast particularly were created off of. I know we worked with one that was created out of a newsletter writing business on Fidelity funds as an example. And then the other thing is like, I mean, amex is a big business in credit cards. And they're like, hey, let's get in the money management business. So what do they do? They poach fidelity PMs. So you have this whole other dynamic where you're no longer this piddly little cute 40 act, shop up in Boston in a place that no one cares. You are the 800 pound gorilla and everybody wants your lunch.
- [51:12]
D
Right. And that's not. And with that, with all that heft, they basically push around the brokers. Right. And the banks and the exchanges. Right. And they start to bully those firms in ways that they've never been bullied before. Right. And that continues so long as they're managing. So as long as essentially Fidelity is the biggest and most important account on Wall street at every firm, they flex their muscles in those various constituents.
- [51:49]
B
Yeah.
- [51:50]
C
Abby clashed with her father over building a separate institutional business. With 20 years of hindsight, who do you think was right?
- [51:59]
D
Yeah, I mean, I think that.
- [52:06]
B
And by. This is called Pyramus. Pyramus Global Advisors was what they originally launched.
- [52:09]
D
They launched Pyramus. Ned was one of the things Ned really wanted to do. This was the early 2000s. They had to that point had had some success, but not a lot selling into institutional clients. There were some reasons for that. The main one and the reason that Ned really wanted pyramids to stand alone is he just couldn't bear the idea that, say, Peter lynch would be flying around the country having to give sales pitches to all these pension managers. And he wanted the Peters of the world to be sitting in their office or visiting companies and picking stocks and not distracted by some of the responsibilities that that might come in having those clients. And not to say they didn't, you know, Peter and others did have. Did manage money for institutional clients.
- [53:05]
B
But we call that the ivory tower theory. Right. You stay in the ivory tower.
- [53:10]
D
Exactly.
- [53:10]
B
You don't. And don't touch anything else because you might break it.
- [53:14]
D
Yeah. I mean, that was even, you know, we get would. Would even when it come to matters of, you know, what happens with infidelity, you know, he would. He did not want, you know, Peter or Bruce Johnstone, who was another very successful manager, or George, you know, monkeying around with decisions, corporate decisions. It's like that's a distraction for them and they just need to be. Do their thing. So that was. So that was one of the. One of the reasons why Ned was really wanted to have a separate structure, have separate. Separate systems, separate business staff, separate sales staff and separate managers. And Abby at the time thought that was unnecessary. That was unnecessary complexity and confusion and would cost a lot of money. And you know, you get. You be in situation where people are like, well, what the hell is Pyramus? Right. Is that Fidelity or is it not Fidelity? Right. And then they'd have to explain what that meant and what the brand. The brand name was and all that. So but he went ahead with it and it. And until eventually Abby took over and. And did away with. With the brand name. Certainly, you know, they do have a separate, they do maintain a separate institutional business. But I believe some of the investment investing is done across both, both retail and institutional.
- [54:46]
B
Did Fidelity status as a private family owned entity give it a longer kind of time horizon, in other words? You know, we're kind of, we, you kind of touched at this in your book. But you know, Charles Schwab, you know, ultimately was in the discount brokerage business. It's a volume game. It's like all economic theory. The lower, the cheaper something is, the more you use it. So, so trading's good for Schwab. They ultimately have to pivot to being in the bank business because they took on all these custody deposits. T Rowe Price is a different business. It's publicly traded the whole time. Obviously Trow, or as we call it here, drop trow is, you know, publicly traded business. Do you think that was a big advantage for Fidelity or with compared to these other publicly traded companies? Was that a disadvantage to be this private family owned business?
- [55:32]
D
On the whole? I would say definitely an advantage. Right. Because a lot of the experimentation they did in trying different businesses, different investing ideas.
- [55:44]
B
Sure.
- [55:46]
D
It would have been much harder for them to do that given the pressures that they might have been under to have produced shorter, shorter term results. Sure. And you know, I think in a related decision is, you know, they never, they were never public. So they never had the currency really to make these massive acquisitions. Right. Which would have probably changed the, had they done that would have changed the trajectory of the place. But were able to grow almost completely organically and without, you know, the culture there has been pretty stable over those 80 years. It's pretty remarkable. But there's been only three people that have run the place over that time. And they're all, you know, three successive generations in the same family. So there's a stability there and you know, institutional memory and all that, that, that probably doesn't exist to the same degree at other. There are similar sized peers that are, that might be public, where you might have a management team that turns over every 10 years.
- [56:58]
B
In retrospect, we all recognize this was an earthquake with many shockwaves. But when BlackRock bought what was then called BGI or what was new known new at the time, you know, Barclays global investors in 2009, that was game changing for the industry. It was game changing for BlackRock. It was thought about Fidelity could have been one of the bidders, but they didn't have publicly traded stock. As you talk about. Was that one of the Bigger misses for the industry, but particularly for Fidelity.
- [57:30]
D
I think for Fidelity, the bigger miss was not. They had index funds. They were not the first. You know, they were. They were. They launched theirs, I think, a few years after Vanguards started, but they didn't really. That wasn't something they really actively marketed. You know, they offered them because there were enough customers that wanted it. I think the big miss for them was not recognizing the advantages of ETFs. It was something that they also had dabbled in. But really, by the time they. Those two things, of course, converge with the success of iShares, right? Index funds and then ETFs. And by the time they recognize that index funds are here to stay, they've missed the window to start to catch what was then and remain the sort of the big three. So Vanguard ishares now owned by BlackRock and then State Street. And so they're way too far behind and they can see that they'll never catch them. And then their backup plan is to reach this distribution agreement with BlackRock to get all their. The iShare funds on Black. But that was definitely a miss. And that's something particularly on the ETF side is just not being on the ball. And I think the reasons for that mainly had to do with just. They're not sure that this was going to really be a permanent fixture in the lives of investors, you know, and probably some institutional arrogance that will, you know, that they would occasionally voice about, you know, well, why would. Do we really want investors just to be satisfied with just keeping up with the market? Shouldn't they want to beat it? Like, that's, that's why. That's where we're here.
- [59:41]
B
That's the question of the ages, I would argue.
- [59:43]
D
Yeah. Yeah. And so it was hard for. So that. So they tried to do both, right? In classic Fidelity fashion, they did. They did offer all these products, but they just. Their heart was not really into it until it's. It's obvious to everyone, right, that these things are massively popular and will remain a building block of American investors. Right. And so then only then, really, do they embrace that fully and they lower the prices on all their. Their index funds and they launch their own big suite of active ETFs that they've continued to do that.
- [60:26]
B
Hey, I want to give a big shout out to everyone who's been working so hard on this show. We recently hit the top 10 in investing podcasts on Apple Podcasts and even number one in the business category in several countries, as you may know. This show is brought to you by SMEAD Capital Management. Smead Capital Management understands how frustrating and illogical the stock market can be. If you are searching for funds with a proven track record, give the SMEAD funds a look. Or better yet, reach out@smeecap.com and don't forget to mention you're a fan of the podcast. Past performance is not indicative of future results. Investing involves risks, including loss of principal. Please refer to the prospectus for important information about the investment company, including objectives, risks, charges and expenses. Read and consider it carefully before investing. SMEAD Funds distributed by Smead Funds Distributors llc.
- [61:16]
C
Not affiliated Was Gavin Baker one of Fidelity's last true emerging star managers? And does that model still work today?
- [61:25]
D
He was, yeah. I mean there are lots of very promising portfolio managers that they still have. He was. He was just remarkably successful at a period in a very important time. Right. At a period where people were really paying attention to rather to what tech stocks were doing. And there were kind of shades of some of the other portfolio managers we mentioned, just not only being very good at really understanding how an industry might work, but certainly elements of right place, right time companies, semiconductors that he was getting to know at a very early and critical stage of their development. They're now household names. They're now multi trillion dollar institutions.
- [62:25]
B
Sure. With Tillinghast retired and Danoff and Weimber obviously leaving the story as we speak speak. Who are the rising stars in Fidelity's active funds business, in your opinion?
- [62:37]
D
Yeah, I think there's some that are still their big growth investor is a guy named Sunu Kolra. He's been around for a while. He's had a really successful run. The managers of Joel's old fund I think were highly, highly regarded. They have, yeah. I would say those probably the top of the list in terms of name recognition right now. But it's different. It's a different era. Right. You don't see them even Fidelity, promoting these folks in the same way as they once did, even in the period
- [63:25]
C
with Will and Joel is fmr then now a brokerage and retirement business with an investment manager inside it rather than the reverse. Does Abby see it that way, do you think?
- [63:37]
D
Yes, I would say anyone who's probably under 40 sees it that way, which is probably the most important audience for them. Most, most people who are individual investors would not be familiar with the lineage of the stock pickers. Even the Peter lynch era was a long time ago now. And so I think that it's clearly been a shift in the center of gravity and toward the distribution platforms that they have. And that's where they, you know, that's, you know, the portfolio management business is still there. It's still kind of the soul of the place. But as far as the sort of framing of the story of the modern Fidelity, it's definitely shifted to the, to the retirement and brokerage platforms, retail platforms.
- [64:38]
B
You touched that. You know, Fidelity obviously went to zero fee index funds back in 18 and the brokerage has gone to zero commissions. You talk about their 70% pre tax fund margins that they get in the active side. Most people don't realize why their index fund is so cheap. You and I both know it's because they lend the securities out and they're able to use those fees to cover fund fees.
- [65:04]
D
Sure.
- [65:05]
B
That all works in an era where beta goes up. Right. And everyone feels happy and fat and rich and you know, we all live happily ever after, you know, is kind of the grand bet, if you will, is if that goes on and on and on, they retain the customer. Maybe not make as much money as they used to per dollar invested. But I think the one thing that does make me think that if, if the place, you know, let's say the market burns to the ground to a certain perspective and because this era has been so market dominant where there's not really like the star manager who's taking this up, there's not like a Jerry style. I mean at least in 21 we had Cathie woods to be like cool, here's our star for this era. But we don't really have that now. I think the average active funds getting crushed against the indices because they all sold their chips 12 months ago, 18 months ago as an example is kind of like if I'm thinking about Fidelity from a housetop perspective, if the market gets crushed, wouldn't that actually cause money to go back to the active side on the margin that would help them but wouldn't help like the blackrocks and the state streets comparatively.
- [66:12]
D
I mean. Yeah, I mean theoretically for sure. Right. You know, that's. It hasn't happened. You know, I don't think it's happened in, let's say years over the last 15 years since the crisis where we've had down years that I don't know if that's necessarily moved in that direction.
- [66:32]
B
Sure. Well, 22 sure didn't cause it. I mean that was a bad year for stocks, but it didn't really cause that pivot, if you will.
- [66:38]
D
Yeah. Or any of the one off years, sort of a taper tantrum year. Forget which one that was. So I think people in the business are really hopeful that there will be moments in the time where they is. Is a proving ground for them or reminder of the power of active management. I was always struck by. I had this conversation with a guy who ran a hedge fund and his firm did very well. I think it was in the financial crisis era. But then as the market began to cover, his fund really struggled and. And he told me I did really well in this period where it was really hard to do that. And no one remembers that, but they do remember the year that I underperformed the S and P. And it's just a bias of human beings is that they're going to. They're going to pay less attention to who did better in down years and more attention to who didn't do as well in big growth years. Right. So we'll see. Right. I mean, we haven't, knock on wood, lived in through this prolonged downturn period like the 70s since then, really. So hopefully that's not around the corner. But if it is, yeah, I think there'll be lots.
- [68:18]
B
I hope it is, because again, who survives those equity periods? And to your point, you do this great job in your book. You talk about. I mean, we all think we're so smart and we're so logical and we're, you know, put it in Boston parlance, we're wicked smart, as they say. Right. And the reality is we're just human. And you're kind of touching that we're just human. We're nothing greater. We have, you know, maybe more degrees than Fahrenheit compared to people of the past, but we're just human. And so can a bunch of educated, logical people do really stupid things? And the answer is, well, they did it in the 70s and they were pretty novel for their time, and we'd just gone to the moon. And so it's like, are we really that more thoughtful? And can we break these natural human biases down to actually change ourselves? Well, we haven't got past murder and sexual affairs yet, so I don't know if financial sins are really gonna make the totem, if you will either.
- [69:12]
D
No, yeah, yeah, I think you're right.
- [69:15]
C
Just on bitcoin, Abby has a reputation as a bitcoin maximalist. Why hasn't Fidelity built a full coinbase, like product suite where customers hold their own wallets? Notably, Fidelity custodies their own crypto, unlike Schwab, which is using Paxos.
- [69:30]
D
Yeah, that's A good question. I don't know the answer to that. They were as far as mainstream financial firms, they were very early in all sorts of experimentation around Bitcoin, both in terms of mining and you mentioned custody and the like. They were the one among the first out of the gate for a spot Bitcoin etf, and they're doing more stuff. I know they're developing a stable coin now, but. Yeah. As to why they didn't, they didn't go fully into that business, I'm not sure. Maybe they will. And maybe this location that crypto has been facing for them relatively quietly since last fall, whether that presents an opportunity for them to expand in different ways.
- [70:30]
C
And of the four secular moments in this story, the go go 60s, the lost decade, the 1982-2000 bull market, and the 2009 passive shift, which do you think was most consequential for the Johnson family?
- [70:51]
B
And there's no wrong answer on this, by the way, so don't feel pressured.
- [70:54]
D
Yeah, it's very tough because there were also different dynamics that were happening internally there that you could, you could, you could start and stop them in different, different periods. You know, in terms of the, of the gradual, you know, role of each successive generation and, and all that. You know, I, I think,
- [71:25]
B
I mean,
- [71:25]
D
it's hard not to. It's hard not to pick the post war period.
- [71:32]
B
Sure.
- [71:33]
D
You know, the 50s through the mid-60s, just because it was. There was so, you know, Fidelity came out of nowhere. They were this sort of very small firm and suddenly they were this, you know, their name and brand were just everywhere. In a way, in a time where so many more people were paying attention to that. It's hard to believe that they would have, they would have had the history they ended up having if they weren't. If they really didn't sort of come into their own in that moment. But, you know, I think you can make the argument for all the others. Right. I mean, that business seemed lost, you know, and, you know, I'm sorry, I take that back. I would say the 70s was really the most important. Information for what Fidelity would ultimately become.
- [72:30]
B
Sure. Because you had to survive through that to get to the bull market eventually.
- [72:34]
D
Right, right. And the businesses that they gravitate toward and the systems they put in place and some of the things like selling funds directly to consumers, all done out of necessity, but all become really the blueprint for the way the place goes right from there. Right. And the success of really their greatest stretch of success and growth is probably the last Five, six years. And much of that was really only made possible by some of the very early decisions they made back in the 70s.
- [73:23]
B
Sure. I know this didn't make the cut of the book, but you had shared beforehand that you had just this retail branch story that you want to share. So I kind of want to use this as the parting gift you give to our listeners.
- [73:38]
D
Yeah, sure. So there was this. So the scene is exactly what month it was. It was 1996, right? And this is a period that really a year that really ushers in what we think of as sort of the Internet age.com boom was certainly early days, and for the first time, a lot of consumers are getting very excited about the potential of what the Internet might bring and how it might change their lives and change business and society. And suddenly what comes before them is this opportunity to buy into this phenomenon, right? And through this company. This was still, you know, it was only at that point, maybe 2 years old, run by this guy who's still in his 20s called Netscape, which was for that moment, as it turns out, sort of a relatively brief moment in time, but was the most popular web browser that everyone was just starting to use, right? So here comes this opportunity to invest not only in this company that you never heard of three months earlier, but in the Internet itself. So it was a moment, right? And people were extremely excited about it. And so the scene that I wanted to work in and it just ended up taking maybe a little bit too long to get to it was at that point Fidelity has branches, retail branches in most big cities around the country. And there's this one in Austin, in this. Austin, Texas, in this, just this, you know, this strip mall. Not, you know, high traffic area at all. And this, this young associate of Fidelity shows up to unlock the door this, this one day. And when he gets there like 8 in the morning, the. There's already a line, you know, waiting outside the office. And he's like, you know, he just sort of looks at it and he's, you know, doesn't know what is going on. And so he unlocks the door, you know, and any, any business, you know, they sort things out and everyone kind of gets in place. And he's sitting there, you know, at the front desk. And when the, the door opens at 9 or 8:30 and the first customer races up to the, the front desk and it's like, okay, is it not, is it, is it too late? I really want to, I want to buy stock in Netscape. It's IPOs today. And he looks at the guy and he just sort of says, annette, what? He had never heard of this company and didn't really expect this to happen. And it turns out all those people waiting outside were just eager to get their hands on this stock. To me, it just really, it really exemplified that sort of moment in time and the enthusiasm that everyday investors had about the Internet and what was coming. And I've been thinking a lot about that period and that scene because we will probably get this shades of that some point, maybe as early as later this year, when you start to see all the AI companies go public and the AI is not the Internet. People are maybe not as excited about what AI is going to bring to their lives personally, but they know it's a big deal. Here is this opportunity once again to own a piece of. And I know, I just thought it was really fun story and like, God, you know, knowing obviously from my vantage point what happens after that, the Netscape IPO day, in the years and decades to come, it was just a fun, fun thing to relive.
- [77:51]
B
Well, and I love that story because I my dad worked with a gentleman who was in the 60s bull market and he talked about how they'd opened the brokerage office store and back then people would be lined up to buy stocks because you had to go in physically to buy them in those cases. And so the difference is we can sit in bed and do it on our phone a la Robinhood. Like you mentioned in your book, Justin, where can people follow you going forward other than your writing for the Wall Street Journal?
- [78:19]
D
Sure. The socials. Right. I will flag our work of The Journal and LinkedIn and X.
- [78:31]
B
And what's your handle on X?
- [78:33]
D
It is Justin Baer.
- [78:35]
B
Okay.
- [78:36]
D
Pretty straightforward.
- [78:38]
B
I know we've had a ton of fun visiting with you today. This is a great book.
- [78:42]
D
Oh, thank you.
- [78:42]
B
Thank you for joining us, Will. Thanks for hosting.
- [78:44]
C
Thank you, Justin.
- [78:45]
B
Thank you, Cole.
- [78:46]
D
Yeah, thanks for having us to be
- [78:47]
B
with you today, Justin. Your book House of Fidelity reminds me that the great businesses built across generations through bull markets and bear markets and that the families who steward them must constantly reinvent. You talk about this idea of the 70s and reinventing without losing sight as Ted, Ned and Abby have shown who they are. Fidelity is a story of family willing to bet against the crowd in the dark years, as we saw with the money market fund business and ride the wave when it finally came, as we've seen a couple times in their history. Our listeners should go out and buy a copy of of your book House of Fidelity today. If you enjoyed this podcast, go to Apple, Spotify, YouTube, or wherever you listen to A Book With Legs, give us review, tell others about the books and the great authors like Justin Baer that we have the opportunity to understand the world with and through for our tribe. If you have a great book that you'd like to recommend, email podcastmeetcap.com that's podcastmeetcap.com you can also send your suggestions to us on X. Our handle is smeadkap. Thank you for joining us for A Book with Legs podcast. We look forward to the next episode.
- [79:54]
A
Thank you for listening to A Book With Legs, a podcast brought to you by Smead Capital Management. The material provided in this podcast is for informational use only and should not be construed as investment advice. You can learn more about Smead Capital Management and its products@smeedcap.com or by calling your financial advisor.