Monday, December 10, 2007

How Ancient Rockers Turned a Broker into a Fiduciary

Blaine Lourd was a cold-calling stockbroker. His story is told at great, frequently hilarious length in The Evolution of an Investor, the cover story in Portfolio.

His ability to be wrong about the direction of an individual stock was uncanny, even to him. At first, he didn’t understand why his customers didn’t fire him, but soon he came to take their inertia for granted. "It was amazing, the gullibility of the investor," he says. "When you got a new customer, all you needed to do was get three trades out of him. Because one of them is going to work. But you have to get the second one done before the first one goes bad."

It wasn't exactly the career he’d hoped for. Once, he confessed to his boss his misgivings about the performance of his customers' portfolios. His boss told him point-blank, "Blaine, you're confused about your job." A fellow broker added, "Your job is to turn your clients' net worth into your own." Blaine wrote that down in his journal.
Ebenezeer Scrooge saw the light after visits from the spirits of Christmas Past, Christmas Present and Christmas yet to come.

Blaine Lourd's conversion came via The Rolling Stones.

Hey, whatever works!

If you have finished your holiday shopping and have time to spare, read his story.

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