Jon Zehner: Perspectives of the long-term investor

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Jon ZehnerTo begin my last day at Davos, I will try to regain my ornithological story line, which time did not permit yesterday.  My day was largely spent in sessions with a variety of Wandering Albatrosses/Long-term Investors.  The topics discussed included:

  • What is the definition of long-term from the perspective of corporates, fund managers and capital providers?  The corporates were focused on time to transform companies, recognising that a transformation process is not likely to be executed in a straight line.  Much discussion of how corporate managers are compensated over several years’ performance while most investment managers are compensated on an annual basis. Conclusion is that it truly long-term is an attitude that needs to come from corporate and institutional boards (and is actually becoming more short-term). For a Wandering Albatross this equates to a  long-term flight plan while the oceans experience disrupting storms.
  • How is value created in the long-term?  Focus was on clear strategies and their implementation as well as capital allocation discipline.  The other primary focus was on people development to make sure that the best talent was constantly identified and supported.  Once again this equates to developing strong chicks and helping them develop effective flight plans.
  • What are the levers that investors have at their disposal?  The focus of the discussion here was on the importance of strong personal relationships and non-financial metrics.  There was a recognition that investors needed to have good industry knowledge to be effective.  This is simply recognising that wandering albatrosses, snow geese, robins and narina trogons are all different species with foraging strategies that vary.

A different session focused on prosperous longevity and the importance of integrated pension fund, health-care, and healthy real estate communities to support an ageing population.  This is hard to translate, but is roughly how to maintain older whooping cranes in the crane community, recognising that they have migrating habits that are valuable to remember but that they need more support in terms of food and familial backing (not sure that it really works this way, lest I mislead you).

Lastly, I attended a session in which U. S. Secretary of State John Kerry spoke about the various Middle East hot spots, particularly the Israel/Palestine issues and how hard the U. S. was working to help solve the challenges.  He spoke eloquently and forcefully about how important solving these issues is to everyone in the Middle East and in the world.  An involved bald eagle chirping (they really have a funny call) in an articulate manner.