Lehman no more....

CFO and COO fired today, firm goes on selling block

(I really did not think I would be writing this post....I actually had faith in Callan but I guess I was wrong)

Another iBank bit the dust....this time it was the once-mighty Lehman Brothers. But before that news broke the CFO, Erin Callan, [must-read bio of her in the WSJ] that everyone spoke so highly of got the axe first thing this morning. For the record, I was a fan of her no-frills style. But just one quarter ago she proclaimed LEH's capital structure fit for the environment and their balance sheet flush with cash. Unfortunately she was wrong on both fronts. Evidently, she hardly knew what was going on with the firm. Is that bad? Maybe but it's not really her fault.

With the advent of complex derivatives and hybrid structures on the CDO desks, not even a room full of Harvard PhDs could unpeel the potential losses that the firm had (and probably has) on it's books.

I don't blame her, I don't blame derivatives, I don't blame corruption nor do I blame overzealous investment bankers. I simply blame one simple metric: EPS (more precisely increasing the EPS on a quarter-by-quarter basis to push share prices higher). The past few years we have seen iBanks making money hand over fist and everyone wanted a piece of the action. Both CEOs and shareholders, alike, wanted equity growth through higher revenues and stronger EPS figures. Everything was about increasing the firm's bottom line. Increase prop trading, a deal here, another deal there and then BAM - money for everyone. The trading desk was the "big bet" for higher revenue and EPS growth. In man cases, a complete disregard for VAR. Well they got what they wanted, however, at the cost of unintended consequences.

Back in the Saddle!

Its been sometime since I have last posted. But thats because I have been hard at work growing AG Capital. I have big dreams for my firm and know that I can't do it by myself and need more in the way of manpower and technological advancements to hit my personal goals. With that said, let's go over some of the changes:

(1) Employees - I have added a portfolio manager and a trading assistant.

Our newest portfolio manager is Jim Schneider. I have known Jim for almost 13 years. We go all the way back to the United States Air Force Academy as classmates in Cadet Squadron 9. After graduating from the Academy, he was a C-130 pilot and is now an MBA Candidate at SMU's Cox School of Business concentrating in Finance. Jim will be involved in both client acquisition and trading.

In addition to our newest portfolio manager we have also added a trading assistant, Carlos Rocha. Carlos is tasked with day-to-day trade reconciliation and maintaining our performance reporting system.

I am very pleased to have expanded the ranks within our firm and believe both of them are high-quality team players that will work to make our firm better.

(2) Technology - I have fallen for the MAC!

I never thought I would have taken such a liking into the Apple iMAC but I sure did. Therefore, with the addition of the new employees, I have purchased two more computer and three more monitors. In total, our tech setting now has a total of 8 monitors, 4 computers and 2 printers.

I'm a big believer, in the use of the "dual monitor" setup. Everyone in the office has use of the two monitor trade desk as I am convinced it definitely increases efficiency.

(3) Office Space - We doubled our office space.

Rather than give everyone private offices I went the way of the trading desk "bullpen." I am a big believer in putting everyone in one big room which does at least two things: (a) increases team communication and (b) forces each other to work harder and not seclude ourselves behind closed doors.

In case you are wondering, our address remains exactly the same. There are no changes.

(4) Statement Reporting System - We signed a deal with Advent.

Advent is a "World Class Leader in Portfolio Management Software." Within the past week we deployed the software and initiated the migrating our client accounts into the new platform. Our clients will not only continue to receive the usual client statements from our custodian but will also receive a portfolio statement from our firm that will provide far better performance results.

We are excited about this addition and will be sending out client communications shortly to provide more details. It is our expectation that it will take us about 5-7 weeks to complete the migration in total.

Again, I am very excited about the direction of my firm. In about six more days I will be reaching the 2nd year anniversary of my firm's inception. I will always grateful to our clients for having provided the capital for success. You can bet that I will continue to work at a feverish pace to provide you exceptional service and performance plus find ways to make your experience first-class.