File:Bell telephone magazine (1922) (14756413175).jpg

Identifier: belltelephone7273mag00amerrich (find matches)
Title: Bell telephone magazine
Year: 1922 (1920s)
Authors: American Telephone and Telegraph Company American Telephone and Telegraph Company. Information Dept
Subjects: Telephone
Publisher: (New York, American Telephone and Telegraph Co., etc.)
Contributing Library: Prelinger Library
Digitizing Sponsor: Internet Archive

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were not providing their cli-ents with performance information.Maybe thats bad, even worse is thefact that if they had it—it may nothave been perfect—they werent us-ing it as an internal control deviceto try to look at whether they them-selves were competitive and, if not,why not? They werent using it tomake fundamental changes in theirown operations. Q. It would seem basic that you couldcall up and ask your money managerhow hes doing. A. If he knew. Suppose he wasntmeasuring? Q. That would seem to indicate that hewasnt running a very efficient opera-tion, wouldnt it? A. But if at that point in time most managers werent measuring, thenyou might not get too excited aboutyour own manager. Q. Wouldnt it seem basic to know onany given day what the performancelevel is? A. In 1973, yes. In the early andmiddle 60s, no. Because hardly any-one was asking. Q. It seems implausible not to ask. A. It was not a competitive marketplace. They didnt have all theseother money managers trying to get
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23 into the business. People handedthem money; said, run it; and thatwas that. Today its a different ball-game. They all realize it. Q. What happened? A. For one thing youve got the com-puter. You can measure a lot ofthings you couldnt measure then.To calculate quarterly rates of re-turn on market, to calculate divi-dend yield plus market price appre-ciation, to risk-adjust return basedon betas (which are a measure ofhow a given portfolio should per-form under various changes inbroad market indices), and all thesophisticated measurement tech-niques ... all of that has comeabout within the last several years. Q. And yet people were able to get re-ports on their stocks the same day longbefore the middle 60s. A. Yes, on a single stock, or on twoor three stocks. But suppose a trus-tee was managing a portfolio. Hedsay: Do you realize weve got 50stocks in that portfolio? You expectme to get an answer today? I canhire a few Kelly girls and we canstart calculating and I may have ananswer for

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