A couple of weeks ago, due to Archegos default, several global financial institutions got a lot of loss. As I was working for a bank around Lehman brothers’ clash in 2008, I am interested in Archegos case: whether we could find the similar background and mechanism as we saw for Lehman in the past. What surprised me a lot was the founder’s religious background. Bill Hwang, the founder, the top management, and the owner of Archegos has been a devout Christian. Media said that Archegos means the God’s servant in Greek, and he founded a philosophic organization devoted to the education of Korean youth. At his office, he had been arranged workshops for the bible study.
As Kazuo Inamori, the founder and honorary chairman of Kyocera group, stresses that top management should have religious mindset so that he can maintain ethical behaviors. However, even though Bill had remained very humble and devout Christian, he made such a huge mistake, and the fund asset has come to almost nil.
I think the followings are drivers of Bill’s success as an investor.
１ Maintained sublime objective of his business
２ Remained religious
3 Understood what is satisfactory
４ Committed himself to the responsibility
Let’s start with Bill’s virtuous side.
１ Maintained sublime objective of his business
Presumably, Bill’s wish over his Archegos management term had been “serving as God’s servant”. Otherwise, that probably had been “Realizing the world filled with God’s bless”. This itself looks a good and encouraging objective as a human being.
２ Remained religious
His daily activities from organizing internal workshops to arranging seminars for Korean youth look deeply religious and Christianity looked a part of Bill’s life.
3 Understood what is satisfactory
People described his residence in the suburban of New York costs 3 mil USD, this is considered as not so extravagant, given his wealth. Bill looked enjoying simple and minimum life. Thus, he had been a person who knows what is satisfactory.
４ Committed himself to the responsibility
After his academic career, as a hedge fund manager, Bill worked very hard and made tremendous efforts to deliver quite high returns to the investor of his funds.
On the other hand, the root causes of Bill’s failure are as follows.
１Lack of professionalism
２No harmony,-no peace, no temperance-
３No real partner
４No mentor
５Misunderstanding of God’ wish
More details of root causes will be explained in the next blog.
Further queries or doubts, please email to ytomizuka@abrilsjp.com
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