Let me explain.
I am a huge gossip hound, I don’t read People or US Weekly, but I do follow a number of gossip bloggers almost religiously. I love one in particular, not only because she’s highly entertaining AND introduced me to Fight Night Lights, but because her insights allowed an outsider like me glimpse into the cynical workings of the entertainment industry. How else could I have come to understand the dire consequences of plastic surgery addiction, passive-aggressive diatribes of an insecure diva, and the many layers of hidden media manipulation that’s unbeknownst to most of us?
Time and time again, the lesson that I take away from the smut is this. The IT boys and girls come and go, but the Meryl Streeps of the world do their jobs, go home, and wake up to see another decade or two of good works ahead of them.
Now, this is not a gossip blog, and there is a point to be made here, I promise. The thing is, just like an actor, an economist or analyst has a very long working life ahead of them (if they are lucky). And like Hollywood, the waters of Wall Street and the investment industry is just as treacherous. It’s hard to get ahead or get noticed in those ultra-competitive and dog-eat-dog kind of environment.
So when an analyst suddenly gets exposure by mastering some new trading anomaly or has a part of his or her research predictions come true, their status is swiftly elevated. It’s not unlike a starving actor in LA, rejected after years of unsuccessful auditions. His luck turns, he unexpectedly lands a starring part in some Josh Schwartz hit show. And just like that, he becomes household name in a desirable demographic.
But Wall Street, just like Hollywood, is fickle. The media is always looking for a fresh perspective, much the same way Hollywood paparazzi are always on the look-out for fresh faces to sell pictures. The end motivations are the same: getting people’s attention, whether it comes in the form of a contrarian opinion or drunken debauchery on Rodeo Drive. Media looks for controversy, and there are always willing participants.
They are usually always too happy to be typecast in a role. Whether it’s the perpetual bull, perma-bear, or the new party boys and girls frequenting Il Sole. What they don’t realize yet, is the limited shelf life of their newly minted status, and how quickly the media will tire of them and hold auditions for the next cast when the time comes. It may be a new kind of show the audiences turn to, or it might be the market taking an unexpected turn for the better or worse.
Then, as quick as it came, fame departs, and the IT stars of yesterday will be forgotten. Squeezed dry of their appeal by their handlers, pigeon-holed in their respective niche, they are left fending for their careers by groveling on their knees for scrappy roles, or occasionally getting exposure by pulling stunts that capitalize on their fading fame.
Then you have someone like Warren Buffet. You can’t typecast him in any particular sectoral or trendy investment class, because he is in a class of his own. Because for half a century, he’s been the only thing he has ever claimed to be: a value investor. He did not dabble in anything sexy that modern finance dangled on a plate. He was not interested in making quick profits with complex leveraging instruments, he didn’t believe in beta nor the benefits of diversification for his customers, he was highly suspicious of mergers and acquisitions, and he disapproved of aggressive accounting standards. How straight-laced can you be, huh?
Do you remember the last time Warren Buffet went on CNBC and MSNBC to defend his investment views? That’s probably as likely as seeing Meryl Streep or Tom Hanks on the cover of gossip rags by the supermarket check-out. Why not? Because they were too busy doing their jobs to attract unnecessary publicity. And what do you do when you bunker down to do your job? You get respect, a rarely talked-about commodity that is sometimes more valuable than money. End of the day, these guys realize the career they have is based on value and substance, and not the ability to generate hype and controversy.
So why are so many analysts out there making the rounds with their one-trick pony show? Why are so many talented guys and gals chasing that illusive IT status that’s both unsustainable, and ultimately, self-defeating?
I will leave you this snippet from an interview with Meryl Streep not so long ago.
She sketches a frame around herself with her finger. ‘This is all you have, and the fewer compromises you make on this template the better off you are, I think. Especially when you’re young. I mean, I understand the economic necessity of doing something. But very early on you’re putting stuff into the world, so look at it carefully.’