As we enter the final four months of the year the equity market continues to search for a catalyst. This void of leadership in the market magnifies the impact of geopolitical developments, while daily economic statistics batter stock prices like a perpetual game of ping pong. Due to this frustrating volatility and short-term focus, it is particularly interesting to discover a tidbit of information with longer-term implications.
In the August 31, 2004 edition of The Wall Street Journal George Mellon wrote an article titled – “George Bush Courts the Ownership Society”. In this article he states, “…a recent survey indicates that more than half of a sampling of college seniors see starting a business as their highest ambition. It’s the most entrepreneurial generation in American history, asserts Forbes magazine.”
What a time to be entrepreneurial!
Let me try to put this in context. Our country is fighting a global war against terrorism in which even our president is unsure that we can achieve ultimate victory. Our country continues to polarize between haves and have-nots. Moreover, with the election two months away the polls indicate a statistical dead heat with the largest contingency possibly being those that don’t even vote. Even worse, there are many who fear our country is on the road to financial ruin due to excessive debt, a lack of savings, and the retirement burden of an aging population. Yet despite all these concerns, 50% of seniors seem to have enough self-confidence to embrace the challenges and risks involved with starting a business. Maybe some of it can be attributed to naiveté or youthful exuberance, but I think it is meaningful, if not inspiring.
Karen Hughes, one of President Bush’s closest advisors, shared another interesting tidbit as she gave us a hint of what to expect in Bush’s acceptance speech. “It’s no longer a world where you work for one company your whole life.” I believe she has had seven different positions and according to her she has never vested in the retirement plan of any one of them. Why is this meaningful?
What President Bush and 50% of college seniors seem to understand is that ownership is an increasingly important ingredient to financial success. I realize that risk taking has always been an important aspect of our economy, but I do think this latest statistic implies a vote against bureaucracy, or at least against controls that stifle innovation and creativity.
Maybe these college seniors are in effect saying, “Leave us alone we can do it better ourselves.” If my observation is correct, the blame for this disconnect between the next generation and established Corporate America lies with Corporate America itself. Perpetual lay-offs have fractured the bond of loyalty between dedicated employees and many large corporations.
Going forward, our nation’s best young minds may choose to avoid climbing the corporate ladder. Instead they will pour their creative energy into developing innovative products and services, and into new and more productive business models that they will own. Within this entrepreneurial spirit may be the seeds of the next exciting technological discovery or paradigm shift that could drive the next bull market.
The bottom line… I believe entrepreneurialism will continue to be an important growth driver for the global economy. At the same time it may also be an increasing challenge for today’s corporate leaders to attract the best of the Next Greatest Generation.
One final note… The Willingdon Wealth Management team continues to grow!
I am very pleased to announce that James L. Montag has joined our team. Jim will serve as chairman and will play an integral role in all aspects of the firm including portfolio management, research and client service. Jim will work primarily out of an office in Charlotte.
Jim’s bio:
- Jim has operated his own registered investment advisory firm, Montag Management Corporation for the past seven years, managing equity, fixed income, and balanced portfolios for individuals, family trusts, retirement plans, professional practices, endowments, and non-profit organizations.
- Jim is a native of Atlanta and has lived in Charlotte since 1963. He graduated from Emory University in 1958 with a BA in Economics. Presently, he serves on the boards of Park Meridian Bank in Charlotte, Alexander Children's Center, and the Graduate School Advisory Council at Emory University. He is also a member of the North Carolina Association of Financial Analysts and Charlotte South Rotary.
