Monday, March 23, 2009

Friedman Billings Ramsey and Tom Peters

Friedman Billings Ramsey was hot back in 2005 - boutique investment bank, middle market, a cool FBR acronym. I guess all glory is fleeting these days. Now they're called Arlington Asset Investment, I guess to hide the fact that FBR lost a lot people a lot of money.

There is a larger lesson here. Let me explain.

One week before seeing FBR's stock price, I ran across a long story from Tom Peters of In Search of Excellence fame. If you haven't heard of Tom Peters: He was a partner at McKinsey who wrote the most influential business book of the 1980s. It wasn't until 2001 that he admitted that he made up most of the data in the book.

"Fortune called Tom Peters the "Ur-guru" of management, and compares him to Ralph Waldo Emerson, Henry David Thoreau, Walt Whitman, and H.L. Mencken."

Anyways, back in 2005, Tom Peters loved FBR.

I guess they weren't so different after all.
The longer I am in business, the more allergic I am becoming to business gurus and journals (Tom Peters, Gary Hamel, HBR, McK Quarterly, etc). My reasoning is quite simple; if this stuff that everybody reads actually works, then we'd be a world full of awesome organizations. Instead nearly everyone I know (my company included) says that their firms are seriously dysfunctional in some way.

Source: The "PSF" is Everything!,


Chris said...

AAI is the old FBR REIT. The investment bank still operates as FBR Capital Markets.

Still, Tom Peters' enthusiasm is interesting. He attributes FBR's previous success to a unique methodology. It is probably better explained by decent execution of a decent strategy during a REALLY GREAT time to be in finance.

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Monday, March 23, 2009