Multiple Ways to Win

Charley Ellis is one of the most highly regarded experts in the investment business. After spending nearly a decade as an equity research analyst in the 1960s, Charley founded financial services consulting firm Greenwich Associates in 1972 to help institutions understand what their clients think of them. Over 50 years, Charley has worked hand in hand with nearly every major financial institution in the world.

Charley received his undergraduate degree at Yale, an MBA at Harvard, a PhD in Financial Economics at NYU, and his CFA charter, has taught at both Yale and Harvard’s business schools, and has served in a board capacity at each of his alma maters - Philips Exeter Academy, Yale University, the Visiting Committee at HBS, an overseer at the Stern School of Business at NYU, and even as Chairman of the CFA Institute. He also has served numerous other non-profits and institutions.

Charley is a prolific writer, having published 16 books on investing. His seminal treatise came in 1975, when he penned a FAJ article entitled “The Loser’s Game.” The piece may have been the first proclamation that active managers as a whole will struggle to beat the market, and it came the year before Jack Bogle launched the first index fund. Charley turned the article into a book – “Winning the Loser’s Game”, whose 7th edition came out earlier this year. A quarter century later after the first edition, Charley served as a Director at Vanguard for eight years.

Charley is not just another preacher for index fund investing. He extols the virtues of indexing after having looked both broadly and deeply under the covers of some of the most successful active managers in the world.

Our conversation begins with a glimpse at what equity research and the structure of the markets looked like in the 1960s and the monumentally different way research is conducted and markets function today. Charley describes elegantly why indexing is a winner’s game for many, and then walks through very special and rare qualities of three of the most successful active managers over the last few decades, Vanguard, Capital Group, and Yale University.

Charley is a brilliant communicator and masterful storyteller. I hope you enjoy the show as much as I enjoyed the conversation.