Talking Tough

The great boxer Joe Louis once quipped, “If you have to say you’re tough, you aren’t.” In financial markets these days, toughness is measured by liquidity and capital. To paraphrase Joe Louis, if you have to say how much you have, you haven’t got enough.

I was thinking about this while reviewing the current financial crisis. It seems that all the banks that have talked about how much cash they have at the holding company or how well capitalized they are have all gone down.

Think about it: Fannie Mae, Countrywide, Bear Stearns–they all protested about how much cash and capital they had, and were all taken out for a song.

So the next time you hear some executive squawk about how strong his company is, think of Joe Louis. If he were that strong, he wouldn’t have to say it.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-03T21:06:35+00:00 September 15th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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