CATCHING LIGHTNING IN A BOTTLE – AN INTERVIEW WITH WIN SMITH

December 6, 2013
On public television, WEALTHTRACK is revisiting our special on why women’s retirement planning needs for their “Golden Years” are so different. Watch the episode here.

Why does a book about the creation, rise and fall of Merrill Lynch matter today? Because the rise of the world’s once largest brokerage firm is emblematic of Wall Street’s great success and critical role in the growth and prosperity of this country and the firm’s failure, of the misguided priorities permeating Wall Street today. In this WEALTHTRACK  interview we talk to Win Smith, author of the just published Catching Lightning in a Bottle: How Merrill Lynch Revolutionized the Financial World. Smith, the former Chairman of Merrill Lynch International resigned from the firm in 2001 because he disagreed with how the firm was being run. This is a fascinating history of Wall Street, two visionary entrepreneurs, their extraordinary achievements and the ultimate destruction of the great firm they created. We are adding it to our WEALTHTRACK bookshelf.

    

 

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Winthrop H. Smith Jr.

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Guest Info

WINTHROP H. SMITH JR.

Author, Catching Lightning in a Bottle: How Merrill Lynch Revolutionized the Financial World

Former Chairman Merrill Lynch International

Newsletter

Consuelo MackIs there such a thing as a “relief” sell off? The now five-session decline by the Dow and the S&P 500 is causing many investors to breathe a sigh of relief. No one is particularly comfortable when markets advance for eight consecutive weeks without pause. So perhaps this will be a pause that refreshes. So far the damage is limited.

Both indices still have year-to-date advances of 20% plus.One headline that got some attention this week was the revision of GDP growth. The Commerce Department reported that real GDP, that’s minus the effects of inflation, unexpectedly increased 3.6% in the third quarter, up from the initial estimate of 2.8%. Unfortunately a big boost in inventories accounted for almost half the gain. As Cornerstone Macro’s Chief Economist Nancy Lazar put it, that is a “headwind to growth.” However she is encouraged by a surprise pickup in business confidence. According to the Business Roundtable, confidence rose in both the 3rd quarter. Lazar says that “increases the odds business spending accelerates, helping to boost overall economic activity.”

Public television stations across the country are holding their second week of winter fundraising events this weekend so WEALTHTRACK might be pre-empted in your local market. As a result, we are revisiting one of our most information-packed programs about women and retirement. Even if you are of the opposite sex, this still contains valuable information because it affects the women in your life!

Here’s a shocker: Almost half of American women fear becoming a bag lady someday! And even among the affluent- women in households with annual earnings of $200,000 plus – 27% fear living on the streets in their old age. Are these fears justified? Unfortunately, in some cases they are.

Women live longer than men. In financial jargon, they have longevity risk. In 2011, nearly 57% of people age 65 and over were women. Those percentages increase every year. Nearly 60% of the 75 and older crowd are women and a whopping 75% of those 85 and above are, which means whatever women have financially has to last longer.

Many women will be alone. An estimated one million women lose their husbands each year. They will be widows for an average of 14 years. 56% of women 65 and older are single, whereas only 29% of men over 65 are. According to research from the Urban Institute, while only 4% of married women over 65 fell below the poverty line in 2010, that number rose to 14% for widows and 18% of divorced women over 65. The poverty numbers are much less for single men. Clearly living longer alone puts women at greater financial risk.

Add all of these facts together and you can see why women have some very different retirement planning needs than men, which is why we have asked two women, who are experts in retirement planning to give us some advice geared specifically to women.

Mary Beth Franklin is a WEALTHTRACK regular, part of our informal WEALTHTRACK brain trust and the go-to person on all matters regarding Social Security. She is contributing editor at InvestmentNews, the leading trade publication for financial advisors. For many years she was senior editor at Kiplinger’s Personal Finance magazine and editor of its annual retirement income issue.

Erin Botsford is Founder and CEO of the award winning financial planning firm The Botsford Group. She has been named to Barron’s Magazine list of the “Top 100 Independent Financial Advisors” and the “Top 100 Women Financial Advisors” and is the author of The Big Retirement Risk: Running Out Of Money Before You Run Out Of Time.

In our WEALTHTRACK EXTRA feature this week, we will be featuring my interview with Winthrop Smith Jr., author of the just published Catching Lightning in a Bottle: How Merrill Lynch Revolutionized the Financial World. Before doing the interview I asked myself why a book about the rise and fall of Merrill Lynch matters today. Having now read the book I can answer it does matter. Smith’s story of the creation of the world’s once largest brokerage firm is emblematic of Wall Street’s great success and critical role in the growth and prosperity of this country. The firm’s failure represents the misguided priorities permeating Wall Street today.

Smith knows what he is talking about. He is the former Chairman of Merrill Lynch International and resigned from the firm in 2001 because he disagreed with how the firm was then being run. He is the son of Merrill co-founder Winthrop H. Smith, who along with the legendary Charles “Charlie” Merrill brought Wall Street to Main Street for the first time. They founded the firm based on a core set of principles, first and foremost “the interests of our customers must come first.” Smith Jr. has some ideas of how Wall Street can bring those values back. The book is a fascinating history of Wall Street, two visionary entrepreneurs, their extraordinary achievements and the ultimate destruction of the great firm they created. We are adding it to our WEALTHTRACK bookshelf.

Have a lovely weekend and make the week ahead a profitable and a productive one.

Best regards,

Consuelo
Mathews Asia

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