Mellody Hobson is an American businesswoman and co-CEO of Ariel Investments, a firm with roughly $15 billion in assets under management as of July 2024. Hobson's position with Ariel Investments has given her the opportunity to serve on various boards of directors during her career, including at Starbucks (SBUX 0.84%), where she is chairwoman.
This article will look at Hobson's investment approach and achievements.
Personal stats
Mellody Hobson's personal stats
- Age: Born on April 3, 1969.
- Source of wealth: Hobson owns almost 40% of Ariel Investments, making her the largest shareholder. She's worked her entire career at the firm, going from intern to co-CEO.
- Marital status: In 2013, Hobson married George Lucas, who is known for films such as Star Wars and Raiders of the Lost Ark.
- Residence: Hobson resides in her hometown of Chicago.
- Children: Hobson has one child.
- Education: Hobson graduated from Princeton University in 1991. Today, Princeton is building a residential facility called Hobson College in her honor.
Her approach
Mellody Hobson's investment approach
John W. Rogers founded Ariel Investments and placed a priority on value investing -- the style used by Warren Buffett. When Mellody Hobson was named co-CEO in 2019, it wasn't so she could transform the firm. To the contrary, Hobson is also a fan of Buffett's investing style, and Rogers appreciates the continuity she'll bring to the firm long after he's gone.
In a 2019 post on Microsoft's (MSFT -0.59%) LinkedIn, Hobson said Buffett: The Making of an American Capitalist changed the way she thought about investing. The 2008 biography chronicles how Buffett's investing philosophies developed and changed over the years, highlighting some of his greatest investments. Hobson's 2019 post highlighted the importance of value investing for her own approach.
Ariel Investments likes to invest in small-cap stocks and international stocks. However, its holdings clearly show that the firm is looking for value across the entire stock market, regardless of a company's size or its industry.
Investors often consider different metrics when determining the value of a stock. But according to Hobson's fellow co-CEO, Rogers, Ariel Investments is looking for public companies that trade at about a 40% discount to their private market value. Given how closely Rogers and Hobson work together at Ariel Investments, she likely shares a similar view of value investing.
As an example of this philosophy from late 2022, Rogers said shares of Sphere Entertainment (SPHR -0.05%) -- called Madison Square Garden Entertainment at the time -- traded at a 70% discount to its private-market value, an attractive price for Ariel Investments' value-minded leaders. Since then, Sphere Entertainment has spun off Madison Square Garden Entertainment (MSGE 1.14%) into a separate publicly traded company.
For what it's worth, as of this writing, the value of this investment has roughly doubled since Rogers said it was 70% undervalued. This takes into account the combined value of shares from Sphere Entertainment and Madison Square Garden Entertainment.
Ariel Investments has a large portfolio, and many other stocks could be highlighted here. But one of the firm's biggest recent buys is J.M. Smucker (SJM 1.17%) stock. In the second quarter of 2024, Ariel Investments increased its position in this food company by more than 50%. It's worth noting that shares are down roughly 30% from highs, which is likely why the firm sees it as a compelling value stock.
We don't know what Hobson personally thinks about Sphere Entertainment or J.M. Smucker. But we know she upholds Rogers' value-investing mindset, which is why she's poised to run the company after Rogers.
Many investors change their investing styles over time. But if one thing stands out with Hobson, it's her consistency. She jokes that not even her work phone number has changed since she graduated college. With a track record of staying the course, Hobson likely won't deviate from value investing in the future.
Her investments
Mellody Hobson's investments
There's plenty we don't know about Mellody Hobson's investments -- not everything is required to be disclosed. However, we can make a few observations.
As mentioned, Hobson is the chairwoman of coffee giant Starbucks -- the first female African-American chairperson of an S&P 500 company. Due to her position at the company, she's acquired a stake in the business. Directly and indirectly, she owned more than 700,000 shares of Starbucks as of March 2024, a position valued at nearly $69 million as of this writing.
Additionally, Hobson has been a director at banking titan JPMorgan Chase (NYSE:JPM) since 2018. As of June 2024, she owned almost 150,000 shares of JPMorgan Chase, both directly and indirectly, worth almost $34 million.
Starbucks and JPMorgan likely make up a very large percentage of Hobson's net worth. Therefore, it's probably safe to assume that these are two companies she believes in for the long term.
More from Hobson
More from this investor
- Hobson frequently makes guest appearances on TV and podcasts to talk about personal finance and social issues.
- Her 2014 TED talk, "Color Blind or Color Brave," has been viewed more than 1 million times on YouTube.
Related investing topics
Mellody Hobson's story is inspiring
It's clear that Mellody Hobson has worked hard to get where she is today. From humble beginnings in Chicago, she excelled in school and in work to become one of the country's most influential people. She's a good reminder to think long term while climbing the ranks. Her example also reminds us not to forget to turn around and give a helping hand to those behind us.
FAQ
Mellody Hobson FAQ
What is Mellody Hobson best known for?
While Hobson has worked for Ariel Investments for more than 30 years, she's perhaps better known for her work outside of asset management. As chairwoman of Starbucks, she's the first African-American woman to lead an S&P 500 constituent.
Many people also recognize her as a director for DreamWorks Animation from 2004 until its 2016 acquisition by NBCUniversal. Still others remember her from her time as a director at Estée Lauder Companies (NYSE:EL) from 2005 to 2018.
Moreover, Hobson relishes the opportunity to speak to the public about how to manage finances and inspire children to care about investing from a young age. She's often invited to talk about these subjects on TV, and many people may recognize her from her many appearances on Good Morning America over the years.
What is Mellody Hobson doing now?
Hobson is still active in her job at Ariel Investments and in her leadership at other companies, including Starbucks and JPMorgan Chase. However, Hobson isn't active only in the business world.
She's also extremely active in her community. She's on the board for After School Matters, a nonprofit after-school program in Chicago that teaches job skills to thousands of teens through apprenticeships and internship programs.
Additionally, she and her husband are involved in the development of the Lucas Museum of Narrative Art, which is expected to open in Los Angeles in 2025.
When did Mellody Hobson join Ariel Investments?
Ariel Investments founder John W. Rogers first met Hobson when she was still in high school, and she immediately impressed him. While studying at Princeton, she was brought in as an intern at the firm. When she graduated in 1991, Ariel Investments hired her.
Starting in client services and marketing, Hobson worked her way up to president of Ariel Investments by 2000 and was promoted to co-CEO in 2019.
