With this past weekend's release of the fifth book in the Harry Potter series, I'm drawn to the telltale efficiency of the sorting hat. If you don't have a child nearby to explain the nuances behind the amazing world that J.K. Rowling has created, I'll try my best to do so.
See, Hogwarts School of Witchcraft and Wizardry's four founders each valued different qualities in its pupils, and each set up a separate house for his or her favorites. From wit to ambition, from bravery to loyalty, your strengths would dictate where you would go for your tenure at Hogwarts. So, one by one, new students would try on the enchanted headpiece that would burrow into the newbie's mind and then announce the appropriate group.
If you've seen any of the accounting tricks or insider trading sleight-of-hand feats that have been attempted by some of the more daring corrupt executives lately, I don't have to tell you that Hogwarts has nothing on Corporate America. Wall Street's School of Witchcraft and Wizardry is alive and well.
That settled, let's line up some of the more colorful CEOs, whip out the sorting hat, and watch some prominent company leaders try it on for size.
"Or perhaps in Slytherin
You'll make your real friends,
Those cunning folk use any means
To achieve their ends."
While the official characteristics of the house that Salazar Slytherin built are ambition and resourcefulness, there's no denying that this is a sinister lot. With an emphasis on evil arts and a "me first" blend of greed and intimidation, it should come as no surprise that this house is overflowing with Wall Street's citizens. With a snake as its mascot, is it any wonder?
With enough entrants to fill a deck of cards, let's roll with the obvious. ImClone's
Then again, the reason that many of these executives are household names aren't because they were sinister. No, you know all about them because they were stupid enough to get caught in the act. So maybe they are more like Slytherin dropouts. The true scholars are still at it, far more crafty and even far more elusive.
Don't let that scare you off from today's business leaders. There are still plenty of worthy candidates to fill the other more honorable houses.
"Or yet in wise old Ravenclaw,
If you've a ready mind,
Where those of wit and learning
Will always find their kind."
Wit and cleverness are the trademarks of a Ravenclaw. Who lands here? If you're thinking along the lines of Oracle's
Quick with the quip and never light on ego, these are the CEOs who give Gordon Gecko a run for his money when it comes to doling out the market's quotable gems.
"You might belong in Hufflepuff,
Where they are just and loyal,
Those patient Hufflepuffs are true
And unafraid of toil."
Loyalty and fairness mark the ways of the Hufflepuffs. Berkshire Hathaway's
I would love to believe that the vast majority of CEOs out there -- the headline-averse majority -- belong here. They toil away for the good of the company. Whether power and personal gain are the intended results or simply the by-product of a job done right, they recognize that a company consists of many parts and none should be neglected.
"You might belong in Gryffindor,
Where dwell the brave at heart,
Their daring, nerve, and chivalry
Set Gryffindors apart."
Bravery and courage are what set Gryffindors apart from the rest. Yes, Harry Potter was sorted into the Gryffindor house. On the CEO side, who are the brave leaders? They certainly aren't the ones running companies that could simply run themselves.
If there is a troubled company with a new chief willing to take some chances, that's fiscal courage. Think McDonald's
What about AMR's
So as you -- or your child -- start to dig into the passages of Harry Potter and the Order of the Phoenix, why not apply the sorting hat exercise to the CEOs of the companies in your portfolio? Where would they belong? Why? It can even lead into a worthwhile bout of soul searching to decide where you would sort yourself as an investor.
You'll be a wizard yet. Hats off to you.