2024. Wilbur Ross. Skyhorse Publishing.
At age 29, president of Faulkner, Dawkins & Sullivan Securities Corporation. Head of investment banking at Rothschild, Inc. Founder of a personal equity firm. Chairman of the board of the Dakota housing complex where John Lennon was shot and killed. Vice chairman of the Brooklyn Museum. Chairman of the National Board of the Smithsonian Institution. President of the Japan Society. Trustee of Sarah Lawrence College. U.S. Secretary of Commerce.
Insolvency proceedings
Ross earned the nickname “King of Bankruptcies” as an investment banker who advised parties in negotiations to settle claims of corporations that had defaulted on their debt obligations – and as a principal who acquired and revived several such corporations. Knowledge of bankruptcy resolution and reorganization is crucial for investors in lower-rated and troubled bonds, and most commentary on the topic comes from lawyers and securities analysts. This literature is kind of informative, but Ross can provide a fresh and priceless perspective by drawing on his involvement in such outstanding bankruptcies as Drexel Burnham Lambert, Federated Department Stores, Pan Am, Texaco, Trump Taj Mahal, and Trans World Airlines (TWA).
Particularly notable is how Ross emphasizes the importance of labor relations in reviving failed corporations. He points out that the unprofitable steel subsidiaries of Ling-Temco-Vought (LTV), which were acquired by W.L. Ross & Co., were hampered by the existence of 32 different job classifications. The rolling mill operators and the upkeep employees could do one another’s work. However, when the mill was running, the upkeep crew sat around playing pinochle, and when the mill was down, the operators were out of labor. Ross got the mills’ union to scale back the job classifications to 5, which greatly increased efficiency.
Trade policy
International trade issues have vital implications for investment each on the macroeconomic level and for firms that export goods, source parts from abroad, or compete with imported products. Many readers undoubtedly share this reviewer’s free trade orientation, and they’re going to find their certainty challenged by Ross’s defense of protectionist measures to combat trade barriers erected by other countries. He notes that zealous free traders Lawrence Kudlow supported the Trump administration’s tough stance toward China, saying the country’s behavior on trade puts it in a category of its own.
Cryptocurrency
Ross’s skepticism of Bitcoin and its brethren goes beyond essentially the most common criticisms. “After seeing hackers penetrate our most secretive federal agencies,” he writes, “the concept only the cryptocurrency’s pseudonymous founder, Satoshi Nakamoto, could have discovered the algorithm that seemingly[s] highly unlikely” (p. 336). He also declares the belief that there’s sufficient demand for the availability of Bitcoin that may ultimately be created to be unproven.
The assumption that some investment professionals who read the book is not going to be convinced by Ross’ arguments on certain controversial topics doesn’t detract from the standard of the book. All the higher if his willingness to have interaction with such topics sparks full of life debate. Here is only one example of the potential for productive dialogue that the book creates:
Outside the financial world, Ross praises the previous New York mayor Rudolph Giuliani’s Success in “dramatically reducing crime”. On the contrary, argues Independent studies by the Poynter Institute — a journalism school and research organization that’s neither politically left nor right-wing biased, in accordance with the nonprofit AllSides Technologies — have generally found no connection between the Giuliani administration’s tactics and the crime rate decline. According to U.S. Department of Justice records, violent crime in New York was already declining three years before Giuliani took office in 1994. Moreover, crime fell sharply across the country within the Nineteen Nineties, with San Francisco outpacing other major cities. Many criminologists attribute the nationwide crime decline to a posh combination of causes, including the waning of the crack epidemic.
In addition to thought-provoking commentary on a wide selection of topics, it offers fascinating insights into financial history. Readers learn concerning the end of fixed commissions on the New York Stock Exchange and the birth of the Loan-to-own strategy. Ross also recounts his early profession as an progressive airline analyst. He differentiated his team’s efforts from those of the competition by utilizing weekly takeoff and landing data to predict the monthly revenue airlines were required to report back to the Civil Aeronautics Board. Ross describes his encounters with financial giants akin to Carl Icahn, Victor PosnerAnd Paul Singerand confrontations with American communists and Neapolitan organized crime bosses. Readers’ interest won’t ever wane as they pick up wisdom that they’ll productively apply to investment evaluation.
