When I think about Fidelity Investments and you, I’m reminded that it’s a family business and how highly regarded it is in the industry. Not only by Wall Street and others, but more importantly, by past and current employees and customers. That’s a nice home for you.
Just ask legendary portfolio manager Peter Lynch, and he’ll tell you how great Fidelity is and how fortunate he was to have been able to do what he did. At one point, according to Lynch, one out of a hundred Americans owned the Lynch run Magellan Fund. A number he did not take lightly. That’s a lot of pressure.
And I’m not sure he would have been able to do that at another company. Because being family-run, you tend to have a longer leash to let things play out rather than wearing a choke collar held by Wall Street wanting quarterly rewards.
I had the chance this week to spend a few minutes walking down memory lane, thinking about how fortunate Your Survival Guy was to work at Fidelity after graduating from Babson College.
Justin Baer wrote of Ned Johnson (who ran Fidelity when YSG worked there) after he died:
“Fidelity would have stagnated had Ned not come in and created a brand new company,” said Joshua Berman, a longtime legal adviser to Mr. Johnson.
Many of the initiatives also represent what may be Mr. Johnson’s most-enduring legacy, according to the executives who worked with him: “He wanted to take investment tools available to his social class and spread them across the middle class,” said Robert Pozen, a former Fidelity president.
Fidelity ended 2021 with $11.78 trillion in assets under administration, or what is in Fidelity accounts as well as Fidelity funds held by rivals’ clients. The firm’s assets under management, or the amount overseen by Fidelity’s funds, totaled $4.48 trillion, up from $3.8 trillion a year earlier.
Fidelity grew into a financial giant but remained, like Mr. Johnson himself, fiercely private. The Johnsons control 49% of FMR Corp., Fidelity’s parent.
Action Line: During his tenure as Fidelity’s leader, Johnson would write about “kaizen,” the Japanese philosophy of continuous incremental improvement, in company memos. That continuous incrementalism is similar to how compound interest works, building on previous growth, slowly but surely. When you want to talk about compound interest and your portfolio, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
P.S. Enjoy this video with Peter Lynch, who explains his time at Fidelity and what he learned along the way.
Originally posted on Your Survival Guy.