Capital: The Story of Long-Term Investment Excellence [Hardcover]

Charles D. Ellis (Author)

Book Description

Publication Date: February 4, 2004

Go inside the elite investment firm with Capital.

The Capital Group is one of the world?s largest investment management organizations, but little is known about it because the company has shunned any type of publicity. This compelling book, for the first time, takes you inside one of the most elite and private investment firms out there?the Capital Group Companies?a value investment firm par excellence. It digs deeps to reveal the corporate culture and long-term investment strategies that have made Capital the one organization where most investment professionals would like to work and would most recommend as long-term investment managers for their family and friends.

Editorial Reviews

Review

“…an excellent book…valuable reading for any professional…” (Professional Investor, September 2004)

“Mr Ellis has an ear for anecdote and figures that speak for themselves.” (Financial Times, 2 May 2004)

"...[Wiley] will publish an astonishing account of how Capital has built one of the best track records..." (The Times, 7 February 2004)

From the Inside Flap

In 1929, the year of the great stock market crash, Jonathan Bell Lovelace headed out to California and founded a tiny financial company–much later renamed The Capital Group Companies. Over the past seventy years, it has developed into one of the world’s leading professional investment management organizations.

No other investment organization in the world has done so well for so long for so many clients. Over the past 5 years, 10 years, 20 years, 50 years, and longer, Capital’s investment results consistently rank in the Top Quartile. Yet most people know very little about Capital–because of the company’s penchant for privacy. In Capital: The Story of Long-Term Investment Excellence, Charles Ellis takes you inside this elite investment firm and shows you the people, practices, concepts, and values that have brought this company consistent success.

Unsurprisingly, Capital is where most investment professionals would most like to work and is the firm they would most frequently recommend as long-term investment managers for their family and friends. Capital is also the investment organization senior corporate executives would most like to have owning their company’s common stock.

Finally, Capital is both the organization most likely to fulfill favorable expectations many years into the future and the least likely to say or acknowledge such prospects, because modesty is so pervasive at Capital, where people are far more interested in what lies ahead than in past achievements. As Jon Lovelace says, "Nothing wilts faster than laurels rested upon."

Through interviews with dozens of current and former executives as well as years of in-depth research, Ellis explains the organizational culture and long-term investment strategies that have helped Capital achieve superior investment results and grow globally. You’ll learn why Capital excels in the mutual fund business with its American Funds and how it pioneered in discovering investment opportunities in emerging markets. Along the way, you’ll also get an up-close-and-personal look at the individuals who built the business from the ground up: Jonathan Bell Lovelace, Jon Lovelace, Coleman Morton, Howard Schow, Jim Fullerton, Ward Bishop, Bill Newton, and many others.

While externally, Capital is in the business of managing investments and providing services to investors, internally Capital’s main mission is to attract, develop, organize, and motivate those remarkably talented individuals who can work effectively with others to develop and deliver superior investment results and superior services to investors. This book illustrates the many methods Capital uses to secure the best financial professionals and details the flexible company structure that allows these professionals to excel.

Capital is one of the elite investment organizations that consistently produce superior long-term investment results. Remarkable as this is, it should come as no surprise. Designed and led for more than seventy years by two remarkable men–Jonathan Bell Lovelace and his son Jon Lovelace–Capital has remained true to its singular focus: long-term investment success.

See all Editorial Reviews

Product Details

• Hardcover: 352 pages
• Publisher: Wiley; 1 edition (February 4, 2004)
• Language: English
• ISBN-10: 0471567043
• ISBN-13: 978-0471567042
• Product Dimensions: 9.3 x 6.4 x 1.2 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #568,829 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

78 of 89 people found the following review helpful:

2.0 out of 5 stars A great subject, ruined by a poor book, March 2, 2004

By 

alexthevc (Los Angeles, CA USA) - See all my reviews

This review is from: Capital: The Story of Long-Term Investment Excellence (Hardcover)

It's unfortunate that a subject so deserving of careful attention and exposition as Capital Group, with its second-to-none long term investment record, was recorded by a writer like Ellis. Few people know the investment management business as well as Charles Ellis, and evidently that fact exempted Ellis from any editing whatsoever at John Wiley and Sons. The book is replete with foot notes, asides, and other minutiae that add nothing whatsoever to the story. In fact, many of the footnotes, which often come 3 to 4 to a page and fill up 2/3 of the white space on the page, do not even deal with matters being discussed in the text at the time. Consider this footnote from page 119, in a section describing the introduction of 12b-1 fees:

"37.) While studying for a joint MBA/JD degree at the University of Pennsylvania, Paul Haaga worked part time at Wellington for Jack Bogle--for $6.00 an hour--writing prospectuses and shareholder reports. After graduation, he went to the SEC in Washington from 1974 to 1977, and then joined Dechert, Price & Rhoades, where he became a partner. In 1985, when Jim Ratzlaff heard that Haaga might leave, he called and said, 'If you ever decide to leave private practice, come talk with us at Capital.' With two brothers already living in Los Angeles, the idea of living on the West Coast was 'not out of the question,' and Haaga joined Capital in 1985."

Again, this footnote, reproduced in its entirety, is from a section describing the introduction of 12b-1 fees. Prior to this point in the book, we have not even been introduced to Paul Haaga yet, so we don't know why his career path is relevant to the discussion of 12b-1 fees (it isn't). We are left to wonder, why did the estimable Mr. Ellis choose to include this fact at this point in the book? Does he think that we are so interested in the career path of this particular individual at Capital that we could not wait to read about it 50 pages later?

I could cite another dozen examples of unnecessary footnotes, egregious spelling and factual mistakes, and long asides that distract from the narrative and key points that Mr. Ellis is trying to expose us to, but then I would be subjecting readers to the same level of tedious minutiae as Mr. Ellis. This book is excrutiatingly difficult to read, a real shame given its subject. Ignore the glowing dust jacket reviews from John Neff, Peter Bernstein, Jack Meyer, Abby Joseph Cohen (!), and George J. W. Goodman--these folks are surely old friends of Mr. Ellis, and they clearly could not have finished such a tedious book. They have better things to do.

23 of 27 people found the following review helpful:

2.0 out of 5 stars Great Subject...Lousy Book!, May 4, 2004

By A Customer

This review is from: Capital: The Story of Long-Term Investment Excellence (Hardcover)

What a great story! Capital Group has one of the most amazing long-term performances and is one of the most unique organizations in the industry! But this book just stinks. I can barely believe the Charlie Ellis wrote this. It's completely disjointed. There's no structure at all. It's like they just published his notes. He skips across generations within a single paragraph. He contradicts himself. About 150 of the 300 pages is fluff and adds nothing to the story. About 1/3 of EVERY page is footnotes that add nothing. He references chapters within the same chapter. It's just terrible. It's obvious the publisher was just in a hurry to get the book out to make a buck off the mutual fund scandal before the hype died off. How ironic that Capital Group takes a long term approach, launching new funds against the tide, while the people at Wiley (by launching this book before it was ready) have shown themselves to be a bunch of short-sighted money grubbers.

26 of 32 people found the following review helpful:

1.0 out of 5 stars For students & admirers only!, April 14, 2004

By A Customer

This review is from: Capital: The Story of Long-Term Investment Excellence (Hardcover)

I couldn't wait to get my hands on this book - it would be the first time that anything comprehensive has been written on the organization. I tried to navigate my way through all of the footnotes and irrelevancies but without much success. There seems to be no real structure to the book. Sure; the overriding message is that the organization is vastly successful, and the author praises Capital throughout. Frankly I'm surprised that the editors didn't intervene and reformat the entire thing from start to finish. A disappointing read - I can only liken it to a textbook without a curriculum, and oh-so disjointed. Oh and BTW - I work here too!