What are my Credentials?

In my book, Option to Profit, I have a chapter entitled “What are My Credentials?” I thought that if someone was going to buy the book, or perhaps browse through it, they should know who this person is making investing strategy recommendations that might have a very tangible effect on their lives, if followed.
I don’t try very hard to hide the fact that I don’t have any formal credentials such as being an economist, a certified financial planner or anything resembling a career in finance. I do know, however, how to use such phrase as “at the margins; opportunity costs; sunk costs and others. In addition, I’m well versed in all of the consulting buzz phrases of the 90’s and early part of the 21st century.
My credentials? I happen to have spent 30 years as a Pediatric Dentist and the majority of those years, in academics.
There you go. Those are the qualifications. I’m really not qualified for anything. I can’t even figure out how to mulch around a tree.
So that brings us to the only story of the day. The first trading day after the historic Standard and Poors downgrade of United States debt instruments. No small matter, but who exactly is charged with that incredible responsibility? Well, it was actually a decision that was finalized by a three person Sovereign Ratings Committee. The public face of that committee on Friday and Saturday had the unfortunate luck to share the same name as the embattled CEO of Cisco.
If you’re reading this blog you probably know that would be John Chambers.
Neither of the two John Chambers is terribly popular right now. But them both into the same room right now and all of the air and life would be sucked out. The joy, too.
Imagine the unbelievable burden of making the decision that would undoubtedly have both riptide and trickle down impact on the United States and the entire civilized world.
Imagine the education, training and experience necessary to weigh all of the information and to make a decision based on sound economic and mathematical forecasting principles. Balance that with a need to understand business cycles, political systems and social contracts.
Where do you find such people? Harvard, MIT, Princeton, Standford? What kind of multiple advanced degrees would such people need? Obviously doctorates, probably in economics, finance, analytical mathematics, even Physics all sound like reasonable entry points.
I suppose an MBA would be very helpful and might substiute for at least one doctoral degree.
So it would probably come as a surprise that the Chairman of the Sovereign Ratings Committee has an bachelors degree in English literature and philosophy from Grinnell College.
I’m not even going to bother to find out where Grinnell College is, but I do know that there’s no ivy on their walls. In this age of distance learning for all I know, Grinnell may not even have walls, although on a purely intellectual basis, there’s no reason that ivy can’t climb up your computer LCD screen.
He does however, also have a Masters degree in English Literature from Columbia University, so that puts him only one shy in the number of Ivy League degrees compared, to say, a one-time Pediatric Dentist, who isn’t even remotely qualified to be posting on Twitter.
Speaking of which, last week another of my favorite Tweeters and I only follow a small number, started a bit of a controversy when he made his case for the advantages in hiring MBA graduates from the top schools for analyst positions.
Like the chicken and egg argument, nurture versus nature and other exercises in sophistry, you can always make some kind of a case for for the role that experience may play in work ouput and quality.
The basic thrust was that by hiring a graduate of a top notch MBA program, at the very least you can be assured of intellect. True, the person may still be a loser in life and professionally, but to paraphrase @Tradefast, a corporate Chief Investment Officer, “at least they’re not dumb”.
In the limited universe designated by 140 spaces @Tradefast makes some of the most cogent observations and does so in a humble fashion. A rare breed. Although I am still a New York Mets fan and he tweets lovingly of the Yankees, he still maintains a very high degree of credibility with me.
Despite the earlier mentioned correlation between education and intellect, you can’t necessarily make a similar statement about experience and intellect. Having experience makes you neither a sure hing for smarts nor talent.
The longer you are in the workforce, the more you realize that there are plenty of people with experience that seem to be entirely mediocre, but somehow move up the ladder or move onto another organization just before his mediocrity becomes apparent..
No disrespect to Mitt Romney, but I don’t believe he is as distinguished or accomplished as he is portrayed. The great smile and hair do help, however. As did having a father with “Governor” on his resume.
Sometimes, that’s all it takes.
So what are John Chambers’ qualifications to lead the august S&P committee?
No doubt that the downgrade statement was beautifully crafted, making wonderful use of some great techniques developed over the centuries.
When he said “ask not for who the rating falls” in response to a question by a CNN anchor, there should have been some clue that deep analytical thoughts were not a priority.
What really caught my attention was “Out, out, damn debt”.
As the trading day proved to be far worse than the futures indicated there wasn’t much solace. I closed out some options but not much else. I’m still amazed that I can tolerate these paper losses far better than I can stomach throwing a dollar into a slot machine.
Glued to CNBC all day, I re-watched John Harwood’s interview with Tim Geithner. What appealed to me was hearing a cabinet secretary not use the typically nuanced words to describe the S&P decision. He was pretty candid. It was very refreshing. I wish that he would do that when appearing before House and Senate finance committees as well, when he really has to suffer fools.
Much was said today about the President’s late appearance for his 1 PM statement on the downgrade. When President Obama finally did begin, nearly an hour after the scheduled time, as if I had anything better to do, the market at first responded positively.
In just a few seconds about 75 Dow points were restored. Amazingly, at the very instant that he mentioned that our problems went back to the day he took office, the downward trend returned with new fervor.
Clearly the President didn’t read my blog entry yesterday, “A Call to National Action.” Had he done so, he would have known that this was a rare generational opportunity to exhort Americans to return to the personal and political behaviors that guaranteed our financial supremacy.
From the point early in the morning when Jim Cramer said that he liked the direction of the tape, to the closing bell, an additional 500 points was lost. I must admit, I thought that the script would play itself out with only a small change at the close, myself.
As the day came to an end, those additional 500 Dow points, in terms of market wealth, exceeded the cumulative value of every single copy of every work of literature ever sold, including e-books.
Certainly, that’s the sort of analysis that John Chambers should be able to comprehend.