Heard at Davos - Boring is good
Hello from the World Economic Forum meetings at Davos. I’ll be posting some of the interesting things I’ve heard this week.
From Victor Blank, the Chairman of Lloyds of London on the current financial crisis:
“Some years ago we had a near-death experience. We found the solution is being boring. Boring is good. People say what’s happened to you in the current crisis? We say we’re fine. We became very boring. We have our capital intact.”
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- Posted: Wednesday, January 28, 2009
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Rita, hope you’re enjoying Davos.
The problem is, boring is fashionable now, so it’s easy for companies to jump on the “boring” bandwagon. You have to be a real iconoclast to have appreciated being boring 3-4 years ago, especially without a “near-death experience” as Lloyd’s had.
Groupthink is very powerful, and just about everyone in the fnancial industry (heck, even an entire country—Iceland) drank the high-leverage, subprime, CDS, real-estate-based Kool-Aid. (And why not? It bought Greenwich mansions, private islands, & $1.2 million office renovations.)
That Lloyd’s seems to stand in a lonely place among large financial firms is testament to the difficullty of thinking clearly & being disciplined when everyone else is going nuts.
Regards, john
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