Gustavo Ballvé on April 14th, 2011
Banks, Corporate Governance, Corporate Strategy, Diversified financials, Food for thought, Home, Industries

Tom Brown’s is an interesting, opinionated source for Financial Services news, analysis and commentary. Their latest e-mail has a review of Jamie Dimon’s Letter to Investors in the 2010 J.P. Morgan Annual Report (PDF). We’re just finishing reading it and agree with Mr. Brown that it’s a gem, a great piece to understand financial services/ banking in general now and in the long term. Always nice to hear candid remarks clearly written by the company’s leader to its ultimate owners. It’s a benchmark for companies in all sectors and countries.

We have more comments, but rest assured that we will keep following his letters – perhaps one day we can write a post as flattering as the one we wrote about Warren Buffett’s letters

Highlights (general):

In general terms, the breadth of subjects he wrote about is already worth praising. It seems like a good, albeit obviously not complete, set of subjects to discuss in order to put past and future performance into context.

Finally, having the divisional Heads write their own letters to investors (thankfully shorter) is a great idea, one that should probably be adopted elsewhere.

Highlights (specific):

“Our first priority was to restore a decent dividend – this is what our shareholders wanted (if it were up to me personally, I would reinvest all the capital into our company and not pay any dividend – but this is not what most shareholders want).”

“Five years ago, very few people seemed to worry about outsized risk, black swans and fat tails. Today, people see a black swan with a fat tail behind every rock.”

On the need for the US to address the challenges ahead of it (budget, entitlements, immigration, education etc.): “The sooner we address these issues, the better – America does not have a divine right to success, and it can’t rely on wishful thinking and its great heritage alone to get the country where it needs to go. But I remain, perhaps naively, optimistic. As Winston Churchill once said, ‘You can always count on Americans to do the right thing – after they’ve tried everything else.’ “

He makes a passionate defense about the value of his firm’s (and the global banking system’s) offerings to the global economy and ultimately all of its agents – when the banks do it right. He does it through a very personal story about a trip to Ghana with his daughter, which is a rare tale from a Fortune-500 CEO.

The part above is fodder for the next section, about new regulation and its impact in the financial system. That by itself is worth the download, despite the obvious “don’t ask the hairdresser if you need a haircut” cautionary note.

We expect to publish an update with further highlights.

Tags: , , , , ,

Comments are closed.

Back to last page or go to the home page