ARBOR WEALTH: Jerry Maguire, Bill Gross and office goldfish
“Today the boss said, ‘Sorry, I can’t use you anymore.’” from “Things Have Gone to Pieces” as performed by George Jones
The movie “Jerry Maguire” was ahead of its time. Released in 1996, the film stars Tom Cruise, Renee Zellweger and Cuba Gooding, Jr.
Sports agent Jerry Maguire (Cruise) experiences a profound personal revelation at an industry conference in Miami Beach and publishes a mission statement entitled “The Things We Think and Do Not Say.” The pamphlet encourages his contemporaries to seek fewer clients, which of course correlates to less revenue for his company.
In less than a week Maguire’s communiqué transforms him into a pariah. He is fired by a former underling, his fiance’ and all but one of his clients leave him, and he makes an emotional and dramatic departure, taking only a goldfish and a briefcase with him. And, oh yes, Dorothy Boyd (Zellweger), a single mother in accounting who was emotionally moved by Maguire’s mission statement.
Holding high his plastic bag with his goldfish, Maguire says, “And now, as I ease out of the office that I helped build …” The business activity barely even pauses as he departs.
PIMCO founder Bill Gross recently jumped to Janus, leaving behind the firm he helped create. Rumors were that five top-ranking PIMCO officers said, basically, it’s either him or us. And so Gross separated from the Newport Beach, Calif., company, which manages some $2 trillion in assets. To date the move has cost PIMCO an estimated $23 billion in assets, with predictions that PIMCO could lose much more than that amount due to Gross’s separation from service.
Business conflicts happen. Even good partnerships can be complicated. Sometimes the founder of a firm, so integral to the company’s early success, gets pushed aside by younger associates. Often it’s because there’s little loyalty in the business world. And sometimes it happens because the firm founder is obstructive and refuses to view the company’s objectives and operations differently in the wake of new business paradigms.
One thing’s for sure: managing investments requires enormous flexibility. And one becomes married to utilizing a certain set of securities or a particular investment style at one’s own risk. Markets change, as do economic environments. Gross, known as the “Bond King,” had managed the firm’s flagship fund for 27 years. But major fund outflows caused many to question his oversight.
Ten years ago who would have thought that today’s moderate portfolios would sometimes be comprised of 80 percent equities and 20 percent fixed income instruments, with some types of equities acting more like bonds than bonds themselves? Managing money is infinitely more complicated than it was even five years ago, and a willingness to absorb and adapt to current economic conditions is vital for success.
Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.