The Plague of Stupidity on Wall Street -- Part 1


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Whatever happened to Hambrecht & Quist, Alex Brown, Montgomery Securities, and Robertson Stephens & Company?
 
These were the “Four Horsemen”, as RS&Co. founder Sandy Robertson proudly referred to them in our meeting with him last week.  The Scions of the Emerging Growth Economy of the 1980’s and 90’s.
 
Prior to each of those firms being acquired by large commercial banks in the late-nineties, these boutique investment banks were critical to the early success of many of today’s most successful companies:  Affymetrix, Gilead, Genzyme, Amgen, Microsoft, Intel, Cisco, Pixar, Apple, just to name a few.
 
What made these firms successful is an important story, because it reinforces many of the fundamental tenants of entrepreneurship that are common to all great companies:  Courage, Common Purpose, and Culture. 
 
The success of the Four Horsemen, together with the Companies that they spawned, is well documented.  What is less known is how badly Wall Street screwed these places up once they were acquired.  Even more so, it is never discussed that the current state of the financial services sector and – because this sector is so vital – the state of the U.S. Economy itself, owes many of its current problems to the Plague of Stupidity which pervaded Wall Street as early as 1999 as the world fell in love with the Emerging Growth model…  Then fell out of love...  Then perpetuated acrimonious divorce…  Then jumped into the arms of MAMA MORTGAGE on the rebound…  and now seeks salvation at the Fed window as the competitive advantage of the U.S. economy gets flushed while the taxpayer gets the enema.
 
…  to be continued