Kathleen Fisher Discusses Diversity in Finance

all of her wealth and investment strategies. If you're at all interested in asset management and what it's like working at a giant firm, or what it's like to be a woman at a very senior level, and really Wall Street still is a male dominated profession. Um, this is really an interesting conversation. Uh. There are a few people who know this business and know the human side of

it as well as Kathy. She's just tremendously knowledgeable and insightful, UM and and full of all sorts of intelligent commentary. I think, Uh, this is the sort of conversation. So if you're at all interested in asset management, wealth strategies investment portfolio strategies. Uh, this is the podcast for you, with no further ado. Here is my conversation with Alliance Bernstein's Kathleen Fisher. My guest this week is Kathleen Fisher.

She is the head of Wealth and Investment Strategies at Alliance Bernstein, a firm that manages about five hundred and forty billion dollars with thirty undred employees in twenty two countries. She joined the firm as a senior portfolio manager and member of Bernstein's private client Investment policy Group. Before joining Bernstein, she spent fifteen years at JP Morgan, most recently as managing director, advising banks on acquisitions, divestitures, and financing techniques.

She graduated from Bates College and has an MBA from n y U. Kathleen Fisher, Welcome to Bloomberg. Glad to be here, and I'm gonna call you Kathy instead. I know that's your everyday name. You started as an equity analyst. What attracted you to finance in the first place? You know me back up and say I started as a young economist. I started the Federal Reserve Bank of New York. I was there for three years, I did monetary research as well as GDP research. It was an amazingly wonderful

learning experience to do high quality research. It was very academic, but I learned the importance of getting your facts right, which today is more relevant than ever, isn't it when we have a word that's called fake news. But it was a great learning exp various about the importance of footnotes, about citing your sources. That has followed me and everything

I've done since then. UM. Having come to New York though to do that job, I did start meeting people who were an investment banking and equity research, and long and behold, someone I met gave me an opportunity to go to Morgan Stanley to be a bank stock analyst, and that's how I get into equity research, which UM back then it was still a relatively new field, very exciting and for me very intellectually rewarding to focus on relative valuations, but to also learn that what you think

is so right often takes the market much longer to agree with or perhaps never agree with. So it was a great learning experience. Any particular example stand out as this was quite quite the memorable experience. UM I was. I was covering bank stocks at a time when bank stocks were very much out of favor, and therefore no one wanted to hear a word I said for quite some time. So let's just say that and of itself

was a great experience. So you spent a lot of your career at JP Morgan after Morgan Stanley, What was that experience like? What did you do for them? My timing at JP Morgan was incredibly fortuitous because I did a lot of bank m and A at a time when bank m and A was absolutely a huge trend in the late eighties, early nineties, mid nineties. So it

was a very active space and tons of activity. So it was a really a wonderful experience and one that captured both all that one does in M and A and corporate finance about valuations and the right price to pay for a deal. But also it brought in the human side of things because with bank mergers, needless to say, cost reduction and people reduction and um. You had to get your head around that UM. And the important thing is in a world that makes sense over time, it

did make sense for the banking industry to shrink. Those job cuts would come eventually those mergers accelerated them, but it was something that you had to stand back and say, you know, it's going to happen over time, regardless of when. So your tenure at JP Morgan, I believe that predated the Jamie Diamond era is very much predated. It was

pre Chase Merger. Actually, yes, so I was going to ask you how much time you spent working with Jamie, but obviously quite a long time ago, obviously not so what led you to Alliance Bernstein, although if memory serves, when you joined it was Bernstein still right now, I joined in two thousand one. The merger occurred in two thousands,

so I came post the Alliance Bernstein merger. I joined Alliance Bernstein because several of my colleagues from JP Morgan had migrated to Alliance Bernstein over time, and therefore they enticed me to join the firm. And you've been there ever since, been there ever since since two thousand and one. So your current title is Head of Wealth and Investment Strategies. What does the head of Wealth and Investment Strategies do well?

I am blessed to work with a team of thirty five extraordinary experienced professionals who are in two separate groups. One is the Wealth Strategies group, which develops the models that help our clients pre experience the likely financial outcomes of decisions they can make, whether those decisions are around

wealth transfer strategies or retirement or chartable. Giving the idea that you have many variables that you can control and therefore how to think about different asset allocations different structures, we help our clients think through all those options. Are you running Monty Carlos some relations or or what are you actually doing to to derive those variable outputs based

on different decisions. Our core model does indeed utilize the Monte Carlo engine, but it's one that we have developed ourselves over the years because we, as a research based firm, want to make sure we are informed by history and therefore we want to take responsibility for embedding relationships that make sense over time. So it's our model, but using a lot of the important quantitative techniques that are important

to getting that right. The other team is um the team the Private Clients and Policy Group, which works on ATHID allocation advice and strategies for clients once they have made the appropriate decisions about their goals and objectives UM, and also the specific execution strategies using the different investment portfolios that we offer at our firm. So one side of the group is planning, the other side is actually asset management, and you want the portfolio to match the plants,

and am I over simplying that's very good? And it's actually we're not the we're not the portfolio managers ourselves. We're making the asset allocation advice using the portfolios that are managed at the firm. So all internal. So in other words, you're creating the salad from ingredients made within. Is that too? Sexis good? Analogy good? And no no, no, no, that's that We all eat salads. That's good. Yeah, some

of us less than we should, that's good. So so it's in house portfolios that are created from it's an in house asset allocation model using various funds and assets that are also managed in house. So really you do you use outside managers? So we we use we offer, we use et f s were appropriate, UM, but the bulk of our services are indeed managed in house. Let's talk a little bit about last year was kind of

an unusual year. We had very high returns in the United States, even better returns overseas, especially dollar denominated, and incredibly low volatility and very very low draw douns. What do you make of the way played out? You captured all the anomalies, and no one knew going into two thousand and seventeen that they would occur. So it's a great reminder that you don't know, and they've given here what's going to happen, especially the overseas returns for dollar

based investors. We started the year with all the focus on the US, but the global synchronous recovery, the benefit to earnings around the world, all of these were very positive surprises that led equities to do quite well. But the fact that there was such calm around the globe despite the geopolitical issues, which the market really has absorbed very nicely. The calm made the sharp ratio for the

year probably one of the highest on record. Right returns relatively unit of risk given the volatility in the market was really quite remarkable. So it was an extraordinary year. Was actually probably rad a perfect year, and that we had no months when there was a negative return on the global stock market, so um lots of record breaking events in two thousand and seventeen UM and when we look forward, we think a lot of those good things

are still in place. The challenge, though, is we would also argue that a lot of the good news is already in the market already then. So one of the things I find fascinating is when you have, as you folks do, a global allocation, and do you get pushed back from clients, not in seventeen, but in a hey, U S stocks are doing great? Why are we wasting all this time with all these overseas haul things? What

what sort of pushback does the diversified portfolio generate? I will say we spend a lot of time with clients reminding why you have diversification right. You never know when things will change, and therefore we remind there will always be times when you hold something that is out of favor or doing less well than you would like. And certainly holding non U S stocks ever since the financial crisis has been a drain on returns until two thousand and seventeen, But we know that over time they will

trade places they do they have. Two thousand and seventeen showed that this year non U S stocks continue to outpace the U s for dollar based investors, and that is the power of diversification for long term investors. And our clients are long term investors, so they do embrace the idea that diversification will help them get the returns they spect but the amount of risks they're willing to tolerate over time. What about the general trend towards indexing.

How do you You You guys are an active set of managers, although you do use e t f s, how do you see this overall trends away from active management and towards indexing playing out. Especially your client base tends to be a fairly sophisticated, high net worth group of investors. Clearly,

active and passive should and can coexist. There is a role for passive, and as a research based firm, we have to acknowledge as we do that the cheapness of passive, which has come down a lot in the past forty years, means that investors Kennedy get very cheap access to all many pockets of the market they couldn't before. So for clients who have relatively short time frames who are very focused on getting market returns, there's nothing wrong with passive.

But for clients who want a chance about performing over time and do have a longer time horizon where are active has time to play out, have more I think it needs more options now than they had before. In that active managers know they need to really show their value. They can't be index huggers. They need to have high conviction in their strategies and have to be able to communicate why they should play out over time. But you

do need time for active strategies to work. And concentrated portfolios high conviction portfolios that look very different than the market are high active, share very little correlation with the benchmarks. In fact, we have servicesor benchmark agnostic equity services. Were saying, you know, you don't even think about benchmarking us. We have some concentrated portfolios stocks and when you have that conviction and the time to have at work, um, those

are nice satellites to have around core portfolios. So you are a broad allocator. Let's talk a little bit about the other half of the portfolio, the fixed income portion. I have legitimately been hearing for ten years that this bond bull market is over, it's dead, it's done, and then next year I guess maybe this is the year we've seen rates start to tick up. What does that mean for fixed income? And are we really at the end of the bond bull market? You are right, We've

been talking about it for a long time. I think some clients are beginning to think it's a broken record. Um. But when you think of how strong the global economy is, and although remember inflation has been the mystery here, inflation has been so low for so long. If the economy continues to be as robust as it has been, it is likely inflation will take up a bit, and even a little bit will encourage central banks to become less accommodative.

We expect rates to move up gradually and modestly over time. We can't wait, though this is getting a little bit tiresome to have these have rates day as low as they have. We've already seen some signs of inflation ticking up around the world, and fairly recently. Early there are signs, and late there are some signs of small amounts of wage pressure. Is that going to continue? What? How do you look at that and integrate that into a portfolio.

We do think the pockets of stress and the job market indicate that wage pressure can develop, But we were not. You know, none of us have a crystal ball on this, but we do expect that to be a source of upward pressure. So we do think that rates will be rising.

But as I said, gradually, our current forecast though, is for four FED rate hikes in two thousand and eighteen, and we do think we'll start to see rates picking up a bit from here, especially as the central banks and other parts of the world fall into step as well. So I see a lot of pushback on bond funds versus individual bonds. Is that an issue you ever deal

with with clients? There's there seems to be some sort of confusion around do I own individual bonds or am I better off and a fund and not have to pick individual bonds? How do you manage that in your portfolios? And what do you think of the difference. There has been enormous press over the years about problems with bond funds,

which um Our clients understand are are not true. I e. Um people who hold individual bonds usually don't mark their bonds to market and therefore are not paying attention to the actual price loss they may have when rates rise.

Bond funds, in contrast, especially intermediate bond funds that are intentionally diversified across the term structure are looking to take advantage of changing um yield curve shapes, are looking to take advantage of short term rates rise and you name it, so they can reinvest coupons in higher yielding bonds when rates rise. And therefore, bond funds are very flexible, especially when rates rise, to let you take advantage of the

changes that occur. Uh. There's another factor which is very important. It's the bond liquidity is no longer as as broad as it was pre crisis, and therefore bond funds are much better for clients who need to pull many out of their funds as opposed to selling an individual bond at a very poor price in a less liquid market. Let's talk a little bit about what it's like for you as a woman working in a field that's been so male dominated for so long. Have you seen any

improvement of things gotten better? Are there more opportunities for women in this field? Things have definitely gotten better that It's very obvious that the industry wants women for the right reasons, i e. We want diverseit for diversity of thought. We want women, We want people of color. We want

to have much more um, different kinds of input. UM. So many studies have shown how much better teams are when they are diverse, and we want to have that advantage and also our clients expected, which is which is good. I think you get, you get a lot of positive reinforcement. And I do think one of the reasons things are getting better is that companies are so much more flexible than they ever were before, and and that's good for men and women right. The fact that there is much

what you can work remotely. These are all good things that encourage a fluid and adaptive workforce that benefits everyone. The pay differential between men and women is as bad as it was, is it getting better? Problem with any kind of pay measurements is that it's very hard to actually look at identical jobs. I would argue that certainly at my firm and at every firm I know, people get the same pay for identical jobs. It's really that's the challenge is actually saying each job, how you measure

each job? UM. Michelle Myers of Bank America Merrill Lynch specifically cited a lack of women at the top of the industry as a challenge for women in finance. And I'm assuming she means a lack of role models, a

lack of mentors. What was your experience coming up through Morgan Stanley, JP, Morgan and now alongst so let me started saying, I'm a partner at our firm, and that is wonderful, and that I and my other senior female colleagues, UM are very focused on coaching, mentoring, and sponsorship of

young women. That is absolutely a dominant force. When I was younger, UM, I was kind of lucky in that I never felt the need to fit in and and and that meant that I wasn't looking as much for female role models as perhaps some people might have been back then. UM. And therefore, UM, it didn't stiny me because I always thought that if you had good ideas and were contributing, you would be rewarded. So I was very lucky that it didn't trouble me me too much.

But I think it's too much into this. So you suggesting you stood out as a woman and there was an advantage to that, I can I will not go that far. UM. I will say that the UM that I think some of the frustrations that some people may have had in their careers. I didn't have UM and and was very fortunate in every firm I worked for not have had those. So what do you think is

the current state of affairs in gender relations? This past year is really feels like a major turning point in the roles of genders and what is and isn't acceptable behavior? Am I overstating that? I think the fact that conversations are being held at the company level in public forms is really good, and everyone's having conversations they might not have had before, and openness leads to good results and

good outcomes and much more honesty, candor and effectiveness. So I think this is indeed a good, good, good spot

to be in. UM. The time will tell, but I am most focused on how exciting the brilliant young women that are coming up are doing and the impact I think they will have because there is so much more conversation about women making sure their voices are heard, about taking care and not to in any way make it make anything seem like it's male oriented, and I think there's a lot of good things that are happening because of that. Holding aside, what what's the right thing to do?

The social issue aspect of it. When you look at the recent financing at uber, which is known as a sort of frat house bro mentality. It costs them tens of billions of dollars, both the founders, the employees, the outside investors because of that, you know, juvenile frat house approach. Have we reached a point where Corporate America has said enough is enough, This is real money and we have to get serious about it. Oh? We yet that stage yet?

You know, you raised a really good point, which is that the transparency that the Internet has permitted has made it hard for companies to hide. And that's a good thing. Uh So, I do think there's a much greater awareness that good behavior is necessary, and I think that's going to be very helpful in enforcing more good behavior down the road. Let's talk a little bit about what you

see as head of wealth management and investment strategies. You work with a big spectrum of investors, from individuals to institutions to everything in between. How do these different investors differ and in what ways are they the same? Well, I'm going to focus just on the private client business, and um, what's what's interesting there is that it has nothing to do with assets sized people are people, and everyone has their own personal preference for risk and return.

And you could have two people exactly the same amount of money, and they could have a whole different view as whether they have enough or or they're going to run out of money, and both could be in very good places, but they each have a very different perspective. So um, we clearly focus a lot on making people understand the likely financial outcomes of all the decisions they can make, uh, and so that they have the confidence in the understanding to actually make very good judgments about

long term planning. That fear of running out of money, I've heard that. I'm sure you've heard that from people who really, unless they start accumulating picassos, will never run out of money. Why is this such a significant concern from people who you would otherwise think are totally financially secure. It has nothing to do with intellectual knowledge. It has

everything to do with embedded psychology. And and as I've said, there's there's you don't know until the person explains you know there's something, whether it's something in their background or just their personal makeup, which makes them very conservative and fearful that terrible things could happen. That could indeed wipe out their their financial nest act. How do you respond to that? Um, it really gets to what I said

before about modeling. Um, if we can show that even in very poor market conditions they will be in a good place, that is very reassure to people. So we do, indeed do our planning to the ninety percent confidence level to make sure people know that even in very poor conditions they will be fine. What about inflation? What sort of inflation assumptions do you build into those sort of plants? We let inflation is a variable. We are not saying

we know we're inflation will go. We we do what we when we do forecast, we do ten thousand trials, and inflation is one of the factors that does unfold over time. It can be very high, can be very low. And remember, deflation can be as bad as inflation. But um, we want to show a range of expected outcomes for inflation as well, because you're so right, inflationary environments that are extreme can be very dangerous. Huh, that's that's that's quite interesting. So tell us about your day to day

what does that look like? Are you because you work with two different groups of both planners and the asset management side. You're working with clients. What what's the Dame life of Kathleen fisherlike? Well, yes, I have. I have the incredible luxury of a lot of diversification my daily life. My team is working on long term asset allocation projects. We're working on long term planning projects. Were publishing for

both our clients. We're creating communications for advisors. We're meeting with clients if our perspective can be useful to a client meeting. So we have a vast array of different things going on. Again, even time we speak in front of public forums in terms of groups. Um, So, lots of diversification. But what what's good about all of it is that we have a lot of interaction with clients and therefore can see, um what issues really matter to people and where we can be helpful and more clear

in communicating. So we mentioned outliving their money. What are some of the other large concerns clients have these days? Well, we didn't talk too much about out living money, but I'm glad you raised that because that indeed, longevity risk is we always remind clients the biggest risk they have nothing in longevity risk is the biggest risk clients have.

People worry about market returns, but just think that nothing in in human history has prepared people for a world where they work for forty years and then may have to live on what they say for the next thirty or forty years. Now for very wealthy people, it's a different dynamic, but still it's a very different thing when you're talking about living perhaps as long as you have worked. Right when you go back to why social security was created, people used to die a few years after they retire,

So it's a very different ballot ball game. So the dynamics have changed dramatically, and it's very important how to think about, you know, money lasting for many, many decades.

So we have technologies and health and healthcare changing. We have all sorts of things taking place in terms of genomics and oncology and down the road, what happens when human life spends, when a hundred is in a rarity, when that becomes run for the ordinary and we start seeing a hundred, ten hundred, twenty as not tremendous outliers. So we can eventually have a problem or we're gonna

have to reconfigure how we think about our portfolios. When we turn sixty eight or seventy and not shift to that much more of a conservative portfolio, absolutely, and that's been the case for at least a decade now with with rates interest rates being so low. You know, the old the decades ago when people used to talk about switching to bonds, bond returns were in the mid single digit and of course at these levels that would be unconscionable to have a heavy bond weight if you need

the money to work for decades to come. So most firms have indeed encourage clients to maintain a good equity weight when they retire. It's ever more important because of longevity. And the other thing that's important is to assume that your expenses grow with inflation over time, so you capture the risk of living for quite quite a long time.

So we talked earlier about the shift from active to passive and how they could coexist, but underlying that has been the shift from price to cheap, and and we've seen what some people call the vanguard effects pressuring fees across the whole industry. What's your take on this and and what do you see happening going forward in terms of fee compression? And everything will associated with that. It's a It's a really interesting topic because I do think

there's gonna much more segmentation in that UM. Getting cheap exposure is a good thing for many people, but paying fees for a broader advice model also makes sense. I think there will be an appropriate demand for transparency of fees and for clear value in what client is getting for those fees. So I think there's these are these are good trends for for clients, So transparency, value you And what was the third? I think the feasts have to be appropriate to the value offered. Yeah, that makes

that makes perfect sense. So you've seen some changes that have taken place in the financial industry over the past few years. What do you think is the most significant change that has occurred so far and what should we be on the lookout in the future. I would have to say speed and information. UM. I love looking at video clips from the seven market crash because you see reporters standing at the top of the New York Stock Exchange with pages giving them handwritten notes about what was

happening on the floor. Nowadays, obviously we all know that everyone can get real time quotes on their phones. UM, there's a ton of information you can look at all day long. The problem is a lot of it's not very good. So information is not judgment, information is not assessment, it's not perspective. And so the challenge is is cutting

through all the information to get to truly good advice. UM. So it's that that's created actually more of a challenge because the more information people have, the easier it is to react to it, as opposed to keeping their eye on the long term, which for most individuals is indeed the right thing to do. Do we suffer from information overload? Is there is there just two fire hose of not judgment, assessment or perspective, but just raw news and headlines and

political volatility. What does that do to an investor's attitude and how does that affect their tendency to shoot themselves in the foot? Well, it does create those new risks, um. You know, studies have shown that back in the day, when people could only look at their accounts once a year, maybe once a quarter, they stayed long term investors. But now that they have daily information, they tend to do more things more quickly. So continually keeping the eye on

the long term UM is really important. And and and I I tease about everything we're doing here today, and that because there is seven News, there's gonna be a lot of talking heads all the time telling people what to do, what to buy, what to sell. Um, and you have to stay away from taking that advice too seriously. So one of the things I noticed, since since you brought up the information flow after the election, in all investors seem to want to ask was what is Trump

going to do for my portfolio? And if you remember early on, oh, this guy is gonna kill my portfolio, and then that very quickly became oh, this guy is gonna be great for my portfolio. How do you respond to questions about politics when is a perfect example, probably the most politically volatile year in my lifetime, and at the same time the lowest volatility in the markets. It

is a fascinating situation, isn't it. Um. We actually looked back over time at all the geopolitical events back to World War two to show that it actually has always been the case that geopolitical events get a lot of headlines but have very little impact on the markets. Um. The only time they do is when something political works

into the real economy. So for example, the Opec oil embargo in the seventies, which did affect the economy, of course, but many other things that we think of, the Cuban missile crisis, you name it, they really had very little

impact on the market. And I think that as time has gone on, there's been more appreciation of that, which is one of the reasons markets have been relatively complacent through lots of scary headlines, because what matters over time, of course, is what companies are doing, uh in terms of earnings growth, in terms of um, you know, getting getting momentum for the long run, and that's what investors really have been focusing on this year. We have been

speaking with Kathleen Fisher of Alliance Bernstein. If you enjoy this conversation, be sure and hang around for the podcast extras, where we keep the tape rolling and continue to guessing all things investment. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. You could follow me on Twitter at rit Halts. Check out my daily column on Bloomberg View dot com. I'm Barry Hults. You're listening to Master's in Business on Bloomberg Radio.

Welcome to the podcast. Kathleen, thank you so much for doing this. I'm I'm We've been looking forward to this since I saw you having a conversation. I think it was with Tom Keane, might have been uh some time ago. So Bernstein is a giant firm. I mean, you're half a trillion dollars plus, it's what almost four thousand employees?

Is that about, right? So that's a substantial firm. What's it like working in a shop that large as a person who's as visible as you are for the company Bernstein Alliance Bernstein, And I'm saying Burnstein, that's a brand

we surprise started, So you started after the mergery. I don't realize the merger was two thousand and the Alliance Burnstey merge was two thousand and Actually our brand now is a B which is which is great, um, nice and snappy, and it's a wonderful firm and that everyone in the firm is focused on one thing, which is providing great outcomes for our clients, because that's we only do one thing, right, We do investment, research and management. So that's a real luxury relative to being in a

financial conglomerate that has tons of different unrelated businesses. You don't have to cross sell insurance or bank accounts or any of that. We focus on providing great financial returns and the appropriate risk adjusted returns for our clients, whether they be institutional, private clients, or retail channel. So it's it's a really um wonderful place to be working since everyone knows our goals and objectives and how we apply

resources to achieve them. So um, I think that's a it's a great model because I do believe strongly that companies should have a core competency to exploit in a world where depth and bradth matter more than ever. So I remember Bernstein back in the nineties when constantly top ranked on Institutional Investor in terms of the research team, the individual analysts. I could pull some names out. Paul

s Agawa was on telecommunications. I remember him downgrading Lucin, uh Cisco, a bunch of telecoms in and people thinking he's crazy and all those stocks then drop. So Bernstein was known for their research. Following the merger with Alliance, has the business changed all that much? I'm trying to remember, do you guys do syndication I p O as those sort of stuff or is it purely investment management and planning?

It is investment management and research and our sell side Santacy Bernstein continues to win accolades in the quality of the research they provide. Now that business model is undergoing some pretty serious changes. At one point in time that was a big profit center for the big banks. Now it is the research department there in service of the rest of the asset management firm. How how is that

working these days? Um? The Bernstein sell side research group is, as I said, incredibly well regarded and well positioned to gain market share in a world their pressures are indeed changing the nature of the business quite substantially. Yeah, that there's been a lot of feed compression in that space, and you mentioned the lack of liquidly on the bond side. That half of the sell side business has changed dramatically also.

But you guys are fortunate that your focus is pretty single minded, and that's relatively unusual in this In this industry, I think it's a real advantage to clients to have a firm that really does know what it's doing and why it's doing it, to say the least. So let me jump to my favorite questions. These are the questions I ask all of our guests, what's the most important thing that people don't know about your background? Well, you might have gotten a sense. I'm a pretty disciplined person.

I work a lot. Um I don't my young colleagues. No, I'm not on any social media social media at all, which makes me a bit of a lutite, I admit. But but the but the thing they are learning sometimes is that I read a lot about what's going on. So I'm actually much more up to date on what's trending than they would expect me to be. And the other really interesting thing for most of my younger colleagues is that I do believe that we're in a golden

age of television. I do think that the Sopranos unleashed the most amazing sets of programs ever. And so when I have any free time on long holiday weekends, I do binge watch everything that I haven't seen, just like a teenager mind. Okay, so give me some names. I have my favorites. Um, tell me what what you're watching and enjoying. Well, to keep it nice and light. I did do the Crown over the holidays. One of the guys in my office loves that I can't get into

it now. I think a lot of people think it's slow, but I think it's riveting because I am a bit of an anglophile. I do love House of Cards. You know, I'll probably still love it without Kevin spacey. Um. I love Oranges and New Black, so I could go on. But Oranges in New Black is a tough watch. I find that's like a little gritty. I think I think

men have a harder time with it than women did. Maybe, Um, have you seen the marvelous miss Maple on em I've read about it and I know she was the young woman on on House of Cards, so I want to see that. My wife and I binge through the whole thing over the holidays, and it's really tremendous. Um, tell us about some of your early mentors. You talked about what you're doing at a b now mentoring women who were your mentors. You know. I wish I could say

I had a couple of incredibly important ones. I really didn't, and I regret that because I do think it's so important. The one thing I did learn, though, is to make sure I got diverse opinions from people, because everyone has biases and everyone has UM some blind spots. So I have found it's really good to ask multiple people questions over time to get help. What investors influenced your approach to asset management? One thing I love about investing is

connecting the dots UM. Everything's interconnected, Everything can have unintended consequences. When I was young and at Morgan Stanley, Barton Biggs was Martin. He's since passed away, and Barton Biggs used to take a big trip every year and write about it.

And the reason and I'm highlighting that is that UM clients loved it because it reminded them of the big picture, reminded them to keep focusing on the long term and recognize all these interconnected issues as opposed to being very you know, focused on one particular stock or something that was really quite ephemeral as opposed to the longer term. So I gave him enormous credit for helping people think broadly.

This is everybody's favorite question. What are some of your favorite books, be they investing or non investing related fiction, nonfiction? What are you reading? I confess I'm not reading anything now. I tend to be in a high work mode this time of the year. But I love books again that help connect the dots. A book that I read that I recommended to many people is Gotham, which is I think it's Gotham A History of New York to so

I think was written maybe twenty years ago. Um, I forget the author's names, but there's a second version coming out, but it is. It is a very big book and the re and it's so wonderful is it actually goes through the first three hundred years of New York City and highlights both the all the accidental forces that made New York become what it is today. And the primary one is that the Dutch influence on New York is really what made it such a commercial center from inception.

We tend to think of us, I think we tend to think about the English uh influence, but you know, the Dutch influence was really much more important to what the city became over time. Gotham A History of New York to eight Edwin Burrows and Mike Wallace, Yes, and Mike Wallace now that has just created just done a second book which goes from I think to nineteen seventeen or something like that. So it's a much shorter time frame, but gets into the next next period. Greater Gotham, A

History of New York City from eight to nine. By the way, I don't know any of this. Google and Amazon are my backup our drive. What else? What else have you been reading? Or let me tell you another book that I recommend to everyone, which used to be quite well known. I don't think anyone under fifty knows of it. But um, All the King's Men by Robert Penn Warren. Does that ring about with you? Yeah? Well it was, But the book is the book is much

more important than the film in that UM. I think it was written in the forties, but it was written about the thirties. UM. It was a little bit based on Huey Long. But more importantly, it's about it's it's got so many themes, but it's about history. It's about how you can't you have to You have to accept and learn to accept your history but also change. UM. Unintended consequences of actions is a big theme of the book.

It's it's magnificent and I it also reminds that geography and climate um are something we don't think about as much anymore. But when you read that book, about the South and the thirties. You feel the heat and the city and the dust, and you realize how that affected the way people lived in ways that we are sort of immune from today. So it's a great American novel

that brings in many important social themes. I just finished How We Got to Now, and one of the six factors that led to modernity was simply air condition I would say air conditioning is the most important invention of the modern era. It's changed where people live, It's changed the computing power. We couldn't have computers that, right, It's really you don't think about that. We take it for granted, but that's a huge innovation. So we talked earlier about

how things have improved for women in the industry. Generally speaking, what do you think is the most significant changes we've witnessed in finance over the past twenty five years, you know, like with UM, with most industries, I think the power of the consumer is really a big trend, right, UM. You see it on every industry. Right, sumer preferences have

to be met. They have so many choices, and that's certainly true in private wealth management, right there are many different choices, and I think it's it's really good for clients, and that they are seeing a broad array of different models, and every firm is therefore going to have to figure out what's the model that works best for them and the clients they want to serve. Makes makes a lot of sense. So given that, what do you think the

next shifts that we're going to see are going to be? Yeah? So, UM, you figure there's technology coming sort of from the bottom, and that the robo advisors have highlighted the opportunity to use technology to give clients quick information and let them do a little of iterative work on their own. But at the higher end, UM, you're seeing that there's actually more need for good advice than ever before. Tax code changes, UM, lots of different issues, as the investing landscape changes. All

these things demand that good advice be available. Tell us about a time you failed and what you learned from

the experience. You know, I think you're looking for something very idiosyncratic there, But I got to tell you the most important thing that ever happened to me was getting through two thousand and eight and nine with private clients because and the reason I know how important that was, UM, I realized I don't remember anything about that year except for work, because we basically dropped everything to make sure

we could work with our clients. UM. As you know, it was a stunning time and anybody in stocks are their stocks go down? UM. Happily our clients often had high quality municipal bonds that really helped offset those losses. But it was a time when UM, the faith and the way the world worked was shaken to its core, and that affected me as well. I had to say, you know, is everything I believe to be true but

in testing still true? And really had to work through that UM and and and it was a very important experience to UM to say, yes, indeed, the words the world does still work UM. But it did require UM uh that our firm and many others really focused on risk control in ways that we hadn't had to do before that. UM. So we developed some very powerful risk control tools that have been very added to our clients ever since then. It's hard to stop and realize it

was only ten years ago. It feels like it's so much further away, but it's it's just a mirror ten years later that isn't that at Many people are still scarred by it. But there's a post traumatic stress disorder amongst investors who. I can't tell you how many times I speak to people, what do you mean you're in fifty percent cash? Well, i'm cash. I was a percent

in cash through Really that that's some serious scarring. Well, it's like it's like we used to talk about the people the depression era mentality, right, it's the same thing, people that lost a lot of money in a eight and will never trust markets again. It takes a long time to get over that. The line I remember from many years ago is when you look at nineteen nine, you did not get back above those levels till nineteen

fifty four. It was twenty five years later, and someone said you needed a whole generation of people to be born, grow up, and start working again before you even had a chance to to breach those levels. Tell us what you do to relax outside of the office. What do

you do to stay either mentally or physically sharp? Sou Having been a working mother for most of my career, my children are now adults thirty one and thirty two and twenty eight, um, I always had to really focus on my job and my family and kind of let other things fall by the wayside, and that luckily worked for me. I'm also on some boards that are very important to me, but them I don't have a high need for fun, which is really good. UM. I've fun? Is is it? My family? UM? I have a wonderful

husband and wonderful children and now a grandson. UM, So I spend most of my time focusing on seeing them as much as I can. UM. I do have a trainer. I have a trainer once a week who pushes me to do things that I would never do by myself, which I think is wonderful. UM. But I will tell you I don't have any dramatically interesting outside hobbies like bungee jumping or anything like that. You didn't strike me

as a bungee jump It wasn't the first thing to discipline. So. UM. You mentioned you work with some younger women in the firm. If a millennial or recent college graduate came to you and said they were interested in a career in finance, what sort of advice would you give them. I would give the same advice I've been giving for decades, which is you have to love the content of what you do. You you will always be competing with people who do love that content. So if you don't, they're going to

have an edge. So you have to know why you're in the field and find if you if you like finance, if you like markets, you know, find the spot that really likes your fire, because um, it is competitive, it should be, and therefore you want to love what you do and the rest will come. And our final question, what is it that you know about investing and markets

today that you wish you knew thirty years ago? I think um, patients, um, and and never never ever letting yourself get swayed by the short term is something that you know when you're younger. It's hard to do sometimes. UM. I look back at some of the things I did back then, and if only I had held on to certain positions that I didn't, it would have been a whole different story. To say the very least. We have been speaking with Kathleen Fisher. She is the head of

Wealth and investing Strategies at Alliance Bernstein. If you enjoy this conversation, be sure and look up an inch or down an inch on Apple, iTunes, SoundCloud, overcast, or wherever final podcasts are sold, and you could see any of the other hundred and eighty or so such conversations we've had. We enjoy your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. I would be remiss if I did not thank the crack staff

who helps me put together this conversation every week. Taylor Riggs is our booker, Michael Batnick is our head of research. Medina Parwana is our audio engineer slash producer extraordinaire. I'm Barry Rich Hults. You've been listening to Masters in Business on Bloomberg Radio. I don't think it so