When a management with reputation for brilliance gets hooked up with a business with a reputation for bad economics, it's the reputation of the business that remains intact.
My rather puritanical view is that any investment manager, whether operating as broker, investment counselor of a trust department, investment company, etc., should be willing to state unequivocally what he is going to attempt to accomplish and how he proposes to measure the extent to which he gets the job done.
The best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago.
We have provided capital here with a couple of institutions recently. The Federal government did that in the '30s for the RFC and I think there could well be a proper role for government in that.
If you want your business to survive for 100 years, you've got to make it through every single day for 100 years. It's not enough to do it 99.9% of the time.
That's been lost. It's a huge problem. What you have is you have the major institutions of the world all wanting to deleverage. They want to take down their assets and liabilities. What seemed so easy to borrow against a year ago now looks like rat poison to them. So they're trying to deleverage. There is only one institution in the world that can leverage up in a way that's all a countervailing force to that, and that's the United States Treasury.
The commission of the investment sins listed above is not limited to 'the little guy.' Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades. A major reason has been fees: Many institutions pay substantial sums to consultants who, in turn, recommend high-fee managers. And that is a fool's game.
The time to buy stocks is consistently over time. You should never buy your investments with the idea, 'I have to get a certain return.' You should look at the best return possible and learn to live with that. But you should not try to make your investments earn what you feel you need. It doesn't work that way. The stock doesn't know you own it.
I'm sitting with six and a half billion dollars we're going to use to close the Mars-Wrigley deal on October 6. I've got to hand over that six and a half billion on October 6. Now, I have to be very careful about who I leave it in between now and then, because they're expecting that he show up.