Capitalist-Entrepreneurs: Game Changers
There has developed an allure associated with working in the "alternative investment space" that has become increasingly evident especially for the Connecticut participants who often are deploying much of their own capital. "Skin in the game" is a form of internal risk management, as no one wants to lose their own money. Edward Lampert, investor, corporate strategist, and considered the epitome of the next generation of Warren Buffet-like investors, has taken over Sears Holdings; Stephen Cohen of SAC Capital, known for secrecy, has posted an average of 40%+ gains annualized since 1992; Yale's cream of the crop big endowment team has had outstanding performance for its size (David Swenson). These and other successful asset managers know privacy helps protect strategy, yet they are developing international reputations. Some have to downplay their success or they'll be targets for the next heir apparent. Obviously, some of the disproportionate take-home pay of the stars in the sector is skewing the overall averages, but it does show that Connecticut has some of the most fertile ground for wealth creation and preservation.
Connecticut is an Investment State
Not many industry segments have the potential ability to change and influence every industry, both large and small, through capital infusions, reallocations, leveraged buyouts, mergers and acquisitions, financial innovation, and venture capital. Connecticut investment sectors do. And, of course, the great recent comparative run in this sector will not last forever. A broad financial market downturn would undoubtedly weigh heavily on the economy and the ongoing worldwide credit expansion will eventually subside. Also, risk appetites and high fees should become more sensible. However, this industry does play both sides of the market, bull (long) and bear (short), and gained employment during the tech sector bust in Connecticut. Preservation of capital is still Warren Buffet's rule #1 of investing and that is what hedging tries to resolve. Diversification is still the best hedge. Rule #2 - Don't forget rule #1!
Hyped consumer demand and spending does not sustain an economy; saving, investment, and entrepreneurship are the most critical inputs for economic growth and improved living standards. Yet the constant downplaying of Connecticut growth prospects lately has led to some recent accounts of "prosperity at risk" in describing Connecticut's economy. Connecticut securities industries defy this pessimism. Young adults and recent graduates need evidence of world-class growth, success, and monetary gain emanating from Connecticut's industry makeup, especially global financial services. It is there. Connecticut is an investment state. Invest in yourself and stay home.