C.S. Lewis is one of the greatest writers of the 20th century (at least in my opinion).
He is famous for writing the Chronicles of Narnia, Mere Christianity, Surprised by Joy, The Great Divorce, and many, many others. One of his most popular works is a short book called The Screwtape Letters. The Letters were written by Lewis during World War II and apparently, he did not think they were very good. The basic theme of the book was that the senior tempter (Screwtape), a demon in the bureaucracy of Hell, was writing letters to his nephew (Wormwood) on how to tempt his "patient" and cause all kinds of trouble. Lewis covers many different areas of temptation in the book and Screwtape advises many tactics for exploiting human foibles and self-delusions. Unfortunately for Wormwood, he ultimately fails to destroy his human and claim his soul for the bad guys; the patient is killed and ultimately goes to Heaven, instead.
Screwtape Proposes a Toast was written almost 20 years later for the Saturday Evening Post and takes on the form of an after-dinner speech given by Screwtape at the Tempter's Training College for young demons. Most people consider this book to be a critique of the American education system. Both books are wonderful reads and I hope you take the time someday to enjoy them.
By now, I am sure you are wondering how I can possibly turn this towards investing, portfolio management and, ultimately, banking. I'm going to focus on one of his main points - and one of the most famous quotes in the book. Remember, this is Screwtape speaking:
"No man who says I'm as good as you believes it. He would not say it if he did."
This quote made me think back to some of the worst meetings I ever had with portfolio managers. When I would discuss investments or investment strategies, the ultimate red flag was someone saying almost that exact thing.
Often it took more of the form, "I don't need or want advice - I'm a really good investor and I do things the way that I like to do them."
The contrast, of course, was the person who would say "Of course I want to hear what you are thinking. I may not agree with it, but if I might learn something, I am happy to listen."
The idea of open discourse and debate is one of the foundations of our company culture, and the more we have grown as an organization, the more I understand that I know a little about a lot of things. In some cases, very little, and if I try to represent that I am an expert it will quickly become apparent that I actually am a fraud. Having said that, there are some things that I do know a lot about and have studied in detail for many years. When I hear someone say, "I don't need or want help." it exposes the speaker to me, just as Screwtape suggested it would.
The contrast is really quite striking, because some of the greatest investors I have ever met are those who actually know that they desperately need advice on some topics—not all topics of course, because in order to be great they have to have advanced knowledge on some topics—but they are humble enough to seek experts on topics where they do not have expertise. Think about that for a while…it's quite a paradox.
The contrast is really quite striking, because some of the greatest investors I have ever met are those who actually know that they desperately need advice on some topics—not all topics of course, because in order to be great they have to have advanced knowledge on some topics—but they are humble enough to seek experts on topics where they do not have expertise.
What's really cool about this is that I have met hundreds of portfolio managers. I teach classes on investing, mortgage-backed securities, and CMOs. I have also traded options for years. I know for a fact that there are a lot of things about each of those topics that I do not know. Many of the meetings I have had with individuals around the country have followed the Screwtape pattern, where the person across the desk says they do not want or need help…C.S. Lewis was right.
I started down this rhetorical path because, in all frankness, I wanted to do a brag session on our firm and the several hundred of our customers who attended our annual Advanced Course this year. The attendees are professionals in their fields - running banks and credit unions of all sizes - lenders - portfolio managers - CEOs and Directors. Yet these busy folks all took three days out of their busy summer schedules to learn from experts in areas where they were not as strong as they wanted to be. This kind of humble learner's attitude flies in the face of what Screwtape wants to happen in our industry.
Of course, Screwtape wasn't really targeting the capital markets in his toast.
It turns out, the toast was actually meant as a warning to the U.S. specifically and democracy in general. Here are his steps (amongst others) to undermine the culture:
- Make sure that children never feel they are inferior. Self-esteem is the most important thing,
- Change curriculum to match the lowest level of student.
- Tie all the bright students to the lowest students.
= the virtual Abolition of Education
= the loss of innovation in science and culture
Remember, C.S. Lewis wrote this book in 1959!
Final, final thought: I'm pretty sure Topo Chico with a twist of lime is the best sparkling water…but it's open for debate. Send me your contenders.
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