The Smart...Please stand up.

The wonderful stock market that can make a hero today and can also crush that hero in a matter of few days. I've been following the market for awhile now. To be exact for 22 years. I enjoyed studies the history and all the stories that it leaves behind. For the future generations, if you ever want to read about a true soap opera, then follow the market and its history. But this time I am reading about a irony and I'm compel to have my opinion about what has happened thus far.

Over the years, I've seen companies that entered into the market with their IPOs and those that fall out of the listings that we all entrust. Riches were made, egos build on top of egos, emotions run on high octane, famous books are written about the successes, the formulation of the 'secret sauce' to make it big spread like wildfire, and the new generations copycat themselves to be like one of the superstars they read about.

Yet, have anyone every wonder the people behind such things. They are the leaders and they the people who tries to impress the leaders. These days we are seeing the large, what once thought of as the most prestigious and safe companies go belly up. These are companies that suppose to be the 'solid' ones. The ones that brings other companies to market. The one that hires the graduates from the elite schools, the one that rejected so many by putting some many gates to allow only the so call the "best". They are the one that were smart enough to know. You see them everyday. They announce their greatness and everyone follow the smell that they leave behind. They glow over cocktail on how much they add value to their company, they believe that somehow they can never be wrong and they proclaim their 'eliteness'. And why wouldn't they be, they came from the elite schools?

Don't get me wrong, I don't doubt that people that came from the elite schools are smart. But I wonder in what way are they smart. Maybe we've lost what is smart. Maybe smart is not definitive, but instead relative? I've seen impressive grades with technical skills, and I've seen eloquent speakers and I've seen those with abundance of academic regurgitation. But beyond that, what is it that makes that person add value to the company or the company around him? Maybe they need to be right. But beyond that, maybe they need to have ethics and the responsibility for the company that they are at. I see business being broken by abandoning the basic. That basic is that an entity is there to bring value to its customers and in return that customer will exchange for that value. I believe that there are flaws in many of what we refer to as sound technical instrument. Imagine just the model we created to help us forecast and plan. These are the models build by elite graduates using the black Scholes model or solver to help us be that much smarter. But are we really that much smarter? Or have you just gotten smarter at making other people look more stupid?

I've been to my share of large and small companies. I've been fortunate enough to be around very smart people and those who were very successful in their own ways (money, life, family, spiritual). The sad thing is that I think we've lost it. I mean I think we went astray to the basic and we find that the complex is somehow better. To prevent myself from going to further detail in that thought, I will stick with just the topic of finance and the people who we entrust to handle that money.

If you look back, there are a lot of shocking news of sudden collapse of companies for the past 11 years. Companies come and go, but these couple of years a company can be reporting good earnings for quarters, gave outrageous bonus and then the following quarter later announce that they are filing for bankruptcy. Yet if you notice, through those years, there are a growing pool of MBA professionals than ever before. But what is it that make them professional?

Looking back, a lot of the long surviving companies today started out with those people without the impressive credentials. But as times goes on, they started to add the elites in their staff following that common belief that you always surround yourself with smart people. But what many people forget is that beyond what is on paper, you got to follow your gut whether that person would be good to the company. Then you judge their work ethics and beyond that you monitor the person's integrity. You see, when you take smart + ego + greed then it = entitlement, then - ethics and moral then it = failure to the company the company that you surround you. Being smart is the beginning, but unfortunately it is not the end.

Now when you look at it, for all the major surprises to the failure of these great companies. The less elite banks such as Wells Fargo Bank has a larger capital share than Citi bank and let's not talk about Merrill or Lehman. Did anyone ever wonder the people that are in Wells Fargo now are probably the people that once were rejected by these elite companies? So it left me to wonder, what is smart and what are we using it for? The greatest danger is not by those who don't know, but by those who knows but don't apply it right.