Life Is A Present

Recently the Chinese Business Weekly introduced the story of Laurence Fink, the chairman and chief executive officer of BlackRock, the hugest asset management company with total asset values over 12 billion dollars. Mr. Fink was once famous in Wall Street for his introducing of CMO (Collateralized Mortgage Obligations), a type of mortgage backed security, and was called “Mr. Bond” at that time. Few years later, he disappeared. In the midst of the subprime crisis and the global financial crisis, he regained the spotlight because of his expert at risk management. Now, Mr. Fink is the most powerful person with huge influence in Wall Street and the White House.

Different from most people of legends in Wall Street whose lives are always in bull markets, Mr. Fink has experienced the bear bottom in the life for a long time. It was the year of 1986 when Mr. Fink was the top debt trader in the First National Bank of Boston; he lost 100 million dollars in one quarter due to the fail trade against the downward trend of interest rate. He tuned to be nobody just overnight.

Where you fall down, where you stand up again. Mr. Fink learned lessons from the failure. He began to study risk and think highly of risk management; he would rather give up huge return for limited risk exposure. While most financial institutions, such as Leman Brothers and JP Morgan, still regard risk management departments as just compliance units to regulation, the BlackRock led by Mr. Fink has established an independently operating risk management system and carries out the most completed and professional risk management analysis in the world. While those financial institutions hire few people for the risk management work, the BlackRock maintains its proportion of 20% employees for daily trade controlling, data mining and asset risk analysis.

The pinch could be a key to turn life better. In the wake of subprime crisis, all state government faced challenges of dealing with toxic mortgages. Therefore, Mr. Fink was the best candidate to play the role of wiping out subprime fire. Later on, JP Morgan approached to Mr. Fink as well for pricing the value of Bear Stearns. Few days later, the Fed rang to Mr. Fink!

Mr. Fink has rewritten his life. Wall Street is just experiencing the process of being rewritten.

According to the report on Chinese Business Weekly, Mr. Fink recently moved back to the office where he failed. I think he wants to remind himself of the difficulty and failure in past. Most important thing, he chooses to face the real of his past, not just to enjoy the glory of fame he earns now.

※ For detail story, please refer to No. 1175, the Chinese Business Weekly ※