A Timely Guide to Banking, and Why Banks Fail

Wealth meanagers and their clients couldn’t ask for a better pocket guide to banking than Bank Failures:  as American as Apple Pie, by veteran financial historian John Steele Gordon.  Although the article appears in the latest online issue of the once beloved American Heritage magazine, the closing section suggests Gordon may have written it in the wake of the S&L crisis. Even so, this quick, readable trip through financial history is timely. Especially this century-old quote from Walter Bagehot:

“Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.” 

The January in April Mystery

This full-page ad keeps popping up in our local paper, and that’s downright odd for several reasons: 

1. Hardly anybody runs full-page newspaper ads these days. January’s stands out like a a sumo wrestler at a toddler's birthday party.

2. January Capital Advisors is based in San  Francisco and run by three broker/advisor/insurance agents. The company offers wrap programs and individually managed accounts. As of three years ago they managed about $161 million. Why are they seeking clients on the Atlantic seaboard?

3. In these volatile times, investment advisers brave enough to tell nervous wealth holders, “Don’t just do something, stand there!” have gained admiration. Number crunchers point out that active trading and market timing are good therapy but too often bad for wealthbuilding. According to its Form ADV, January seems to prefer high portfolio turnover, guided in part by technical analysis, with holding periods of a year or less. In other words, don’t stay the course.

4. January is awfully late to the party. This area, known for its relative affluence, is drastically overstocked with investment advisers and wealth planners. Hundreds and hundreds! Maybe thousands.