Something triggered my thinking about my days as a bank stock analyst with Morgan Keegan & Company in Memphis (now part of Raymond James) in the late 1970s and early 1980s.  They had been without a bank analyst for quite some time when a seasoned analyst they thought they had hired did not show up.  I had good experience as a financial analyst at First Tennessee National Corporation (now First Horizon Corporation) where I had been assistant treasurer, but no experience as a bank research analyst.  The fact is that Morgan Keegan followed about twenty regional bank stocks and their equity salesmen were crying out for ongoing research and recommendations on those stocks.

Somehow, I began to learn what being a bank stock analyst was all about.  I figured out that I needed to create something that could give me a bit of an edge.  What I developed was a ranking scheme that looked at my 20 bank holding companies (BHCs) in a disciplined manner.  So I created an analysis that looked at these BHCs through about a dozen filters, including, of course, return on equity, return on assets, leverage, and more.  Then I developed a “proprietary weighting scheme” that enabled me to rank the banks. That may seem simplistic, but the time was before the first personal computer showed up at Morgan Keegan.

I had to learn to interview BHC CEOs on quick notice.  The good news is that they wanted to talk to me in the hopes that I would publish about them favorably and recommend their shares to our retail and institutional sales groups.  Learning my new gig was like drinking water from the proverbial fire hose!

I began to be asked to have calls with institutional clients by our salesmen.  In these calls, I’d talk about the market environment for bank stocks and focus on my top two or three recommendations.  I apparently became pretty good at it, because our salesmen were selling lots of OTC regional bank stocks — which at the time, provided nice and juicy commissions.

There is more to that initial learning experience, but this short intro sets the stage for the today’s important success lessons.  I was asked by Morgan Keegan’s top equity salesman, G Walter Loewenbaum, II (“Wally”) (I could find nothing more current on Wally), to travel to London, Edinburg, and Paris, to call on some of Wally’s institutional clients.  At the time, I was 31-32 years old. As it turned out, one evening, we had no client dinner scheduled, and Wally and I went to dinner together.  After some conversation, I asked Wally what was, to me, an important question.

I asked, “Wally, what is the secret of your success?”

He reflected for a moment, and then continued our previous conversation.  I thought for a bit that he was avoiding answering, but then, he said words very similar to what I will place in quotation marks:

“Chris, most brokers don’t lose clients because they lose money for the clients.  If you are in this business, you will lose money from time to time.  They lose clients because they ignore their clients while they are losing money.  So, don’t ignore your clients in bad times and you will keep them.”

Wally was a big proponent of investing alongside his clients.  If he asked clients to take a position in a stock, Wally took a significant personal position in that same stock. His clients knew that he was feeling their same pain when the market was down. He went on:

“Chris, the secret to my success, whatever that is, is in one word — MOMENTUM.  If you have momentum, you have to do everything in your power to maintain it.  And if you don’t have momentum, you have to do everything in your power to regain it.”

Wally and I continued the conversation during the remainder of dinner.  I don’t remember the rest of the conversation that evening  (in Edinburgh, I recall), but I have never forgotten Wally’s answers to my question of the “secret” of his success.  I have repeated this story many times in the more than 40 years since dinner that evening with Wally.  So we will end this short post with a bit of repetition since I have adopted Wally’s advice and tried to follow it over the years.

What is the secret of professional success?  We have just talked about two such “secrets.”

1. When times are tough, keep in touch with your clients and don’t ignore them.  They want to know you are sharing that pain.  Obviously that’s easier when times are good, but the lesson remains the same.
2. If you have momentum in your professional life, do everything in your power to maintain it.  If you don’t have momentum, do everything in your power to regain it.

Come to think of it, these two “secrets” could have application in our personal lives as well.

Be well,

Chris