Today it might be hard to grasp, but when I was 21 there were clients who hired me because I was “a kid.” They hoped I would become “a gunslinger.”   Even in the 1960s, fear of the market still existed from the crash of 1929.  To be called a Gunslinger was an accolade applied only to the best money managers.   Of course, I wasn’t one of them.   But I did have two of the attributes; I was young and without fear.  Fortunately, for my new clients, I was under the spell of Robert F. “Pete” Lawson one of the first portfolio managers at Fidelity Investments.  

In the 1960s, westerns were part of America’s entertainment culture.  The gunslingers in “Gun Smoke,” “The Lone Ranger”, “High Noon” et al. were a major cultural genre.  They were all young, tall, good looking and had no fear.  I half qualified by being young and having no fear.  At the time, for an active manager to be called a “gunslinger” was the ultimate compliment.   Robert F. Lawson was a known “gunslinger.”   It was a term of utmost respect even deference.   After all, they were moneymakers.

From the crash of 1929 to the mid 1950s stocks had yielded more than bonds.  But in the mid 50s there occurred a paradigm shift that few recognized.  However, Robert F. Lawson, Roland Grimm, and Jerry Tsai – all Fidelity portfolio managers – definitely did.  The Kondratieff long wave was in an upswing then much as it is today.   From 1945 till 1987 correlation (the degree stocks move together) was to stay well below its historical average of 26%.  So in reality Pete – and other gunslingers - had an advantage.   For the past seven years, correlation has ranged from 35% to 100%!  When stocks move together -up or down – it is impossible for active managers - even a “gunslinger” – to outperform.   It’s like trying to pick out the best hog bellies going by on a conveyor belt.  You can’t.  They’re all the same.

Fast food restaurants, hotels and motels, color television, jet engines, computers and the Interstate Highway System all happened because of the long wave upswing in the 1950s and 60s.  Lawson caught them all with almost prescient judgment.   My first exposure to him was in March of 1965.  “Gentlemen we are now at war in Viet Nam.  We are going to need bombs ... lots of them.  Buy Bayfield Industries, they make them.”  The partners of the firm were stunned.  It took courage to go against the prevailing investment crowd which just wanted dividends.  After all, that philosophy had worked for 35 years.   

Pete’s persona radiated an ingratiating self confidence.  Much like the TV/movie gunslinger, he lived what he did.  One night in the office, I heard a police radio blaring from the floor below.  I walked downstairs and there he was.  The radio was sitting on his desk.  “Pete, what are you doing?” I asked.  “Trying to find a way to make money from these race riots (again it was the 60s).  Be careful going home.” The next morning, he rolled out a buy recommendation on a company that made riot gas.  Of course, it went up …   a lot.  Lawson was always ahead of the investment crowd in recognizing change.  As I was to learn from him, it is in recognizing change that one makes the most money.   However, we all become cautious as we age … even gunfighters.    But if you’re really good at it, you live longer.  Billy the Kid died at 21.  Wyatt Earp, on the other hand, lived to be 80.   Pete?  He died in 2011.  He was 88.

-Francis Patrick Boland