Latest / Earn Your Leisure / John W. Rogers Jr. Went From Getting Stocks As A Childhood Gift To Starting First Black Mutual Fund

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John W. Rogers Jr. Went From Getting Stocks As A Childhood Gift To Starting First Black Mutual Fund · Earn Your Leisure

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  Speaker 3: I want to get the backstory right, and I know
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  Speaker 3: this started with you receiving shares of stocks when you
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  Speaker 3: are believing in moved to Princeton I did.
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  Speaker 4: So.
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  Speaker 3: Can you tell a story about about your family's history
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  Speaker 3: and how Ariol got started and how you you know,
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  Speaker 3: became in the chairdach right now?
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  Speaker 5: Well, thank you, I've got sort of you know, I've
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  Speaker 5: been very, very fortunate I have. I had two extraordinary
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  Speaker 5: parents and they all came from sort of entrepreneurial backgrounds.
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  Speaker 5: My dad's father was a barber in Knoxville, Tennessee. My
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  Speaker 5: dad was an original Tuskee gairman and flew over one
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  Speaker 5: hundred missions in World War Two. He decided that when
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  Speaker 5: I was age twelve, that he was going to expose
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  Speaker 5: me to the stock market. He went to law school
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  Speaker 5: on the GI Bill and had a small law practice.
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  Speaker 5: He never got it very large, but he was out there,
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  Speaker 5: you know, fighting hard to grow clients and build his business.
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  Speaker 5: And I watched that. But at the same time, he
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  Speaker 5: wanted me exposed to the stock market. And every Christmas
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  Speaker 5: and every Birthday after I was twelve, I got stock
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  Speaker 5: certificates instead of toys. At first, that wasn't a lot
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  Speaker 5: of fun, but you know, it was a great idea.
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  Speaker 5: And then he introduced me to his stockbroker, the first
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  Speaker 5: African American stockbroker on salth Street here in Chicago, man
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  Speaker 5: named Stacy Adams.
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  Speaker 4: And Stacey became my mentor and my role model.
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  Speaker 5: On my mom's side, you know, my mom was the
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  Speaker 5: first African American woman to graduate from the University of
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  Speaker 5: Chicago law School in nineteen forty six, and she said
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  Speaker 5: she was inspired to become a lawyer because she watched
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  Speaker 5: her father use his legal skills to stop my great
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  Speaker 5: grandfather from being extra guided back to Tulsa after the
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  Speaker 5: Race massacre.
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  Speaker 4: My great grandfather J. B.
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  Speaker 5: Strafford on the largest black owned hotel of the country
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  Speaker 5: at the time.
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  Speaker 2: That's a great that's a great grandfather.
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  Speaker 3: Yes, yes, So when we went to Tula, we went
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  Speaker 3: to Tulsa and they gave us a tour of Black
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  Speaker 3: Wall Street and they actually told us about about your grandfather.
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  Speaker 4: Well, yeah, I was just you know, I was tall.
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  Speaker 5: I was in Tulsa several times now recently and there
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  Speaker 5: during the centennial year, and he was someone who was
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  Speaker 5: out fighting for economic justice for our community, fighting the
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  Speaker 5: Jim Crow.
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  Speaker 4: Rules and laws, and you know, he was.
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  Speaker 5: A stand up pioneer, very successful and he you know,
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  Speaker 5: he his his son C. F. Stradford, started the first
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  Speaker 5: Black bar Associations UH in the country, helped helped to
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  Speaker 5: help fight the restrictive covenants here in Chicago, and helped
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  Speaker 5: Orb Differson with the case at the Supreme Court Hansbury versus.
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  Speaker 4: Lee.
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  Speaker 5: So, long story short, I was just lucky to have
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  Speaker 5: these pioneering parents and families that cared about building black wealth.
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  Speaker 5: That was really key.
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  Speaker 4: And so I've inherited and inherited that mission, So.
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  Speaker 1: Your giving stocks as a gift. At what point do
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  Speaker 1: you start to figure out which equities.
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  Speaker 2: Do you want to invest in? Because I know Burriel
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  Speaker 2: starts at.
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  Speaker 1: Twenty at the age of twenty four, Correct me if
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  Speaker 1: I'm wrong. What did you start developing your own investment
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  Speaker 1: strategy around that time or at.
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  Speaker 2: What point are you are you figuring this out?
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  Speaker 5: It was kind of a journey, you know, when I
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  Speaker 5: was eighteen and my father turned the portfolio over to me,
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  Speaker 5: and you know, I had a broker right across the
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  Speaker 5: street from campus, and I would sit and talk with
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  Speaker 5: him about the markets, and he showed me where to
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  Speaker 5: go to Firestone Library to read the newsletters and learn
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  Speaker 5: about the markets in a different way.
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  Speaker 4: And then I was fortunate in corporate finance at Princeton.
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  Speaker 5: We had to read a book called A Random Walk
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  Speaker 5: Down Wall Street Burton Alcohol.
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  Speaker 4: It's one of the classics and one of the greatest
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  Speaker 4: books of all time.
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  Speaker 5: And he was the head of the economics department at Princeton,
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  Speaker 5: and I went to see Professor Malcolm during that time
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  Speaker 5: and we stayed in touch, you know, over the last
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  Speaker 5: forty five years or so. And I learned then about
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  Speaker 5: the idea that crowds can get out of control and
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  Speaker 5: group think can take over and everyone chases what's worked yesterday.
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  Speaker 5: He talks a lot about the great bubbles that have
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  Speaker 5: occurred within the world's history and get how people can
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  Speaker 5: lose their minds and different types of the market. You
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  Speaker 5: be overly excited about the markets are overly fearful, And
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  Speaker 5: so it started me thinking about being a value oriented
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  Speaker 5: contrarian investor. And again that book had a profound impact,
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  Speaker 5: and of course I started to read other books on
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  Speaker 5: the market, started to read about value investors like Warren Buffett,
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  Speaker 5: and they helped me develop that investment strategy that I
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  Speaker 5: had during the sort of two years between college and
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  Speaker 5: starting starting.
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  Speaker 2: Aerial as a contrarian investor.
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  Speaker 3: What do you think of the global macro picture right
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  Speaker 3: now and what opportunities do you see that most people
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  Speaker 3: are not talking about.
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  Speaker 4: Well, you know, one of the key things.
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  Speaker 5: You know, we are very much believers of being long
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  Speaker 5: term investors. Our tortoises, you know, the tortoise is our
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  Speaker 5: logo to remind people that old Aesop's fable slow and
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  Speaker 5: steady wins the race.
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  Speaker 4: We want to buy companies we can own for the
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  Speaker 4: long run.
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  Speaker 5: And try not to get too tied up in the
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  Speaker 5: local you know, the macro things. What's going to happen
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  Speaker 5: with interest rates next week, what's going on with unemployment
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  Speaker 5: and inflation. You know, we're aware of it, but we
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  Speaker 5: often believe that the markets are going to go higher
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  Speaker 5: and over time. And you know, Warren Buffett always reminds
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  Speaker 5: us the last century, the Dow Jones started at sixty
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  Speaker 5: six and ended it over eleven thousand. In that last century,
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  Speaker 5: we had two World wars, great depression, and many recessions,
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  Speaker 5: a pandemic. Our capitalist democracy somehow finds a way to
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  Speaker 5: march forward, and so we try to be long term.
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  Speaker 5: You know, I know, one of the things that it's
• 7:38
  Speaker 5: fun to talk about. You talk about a little bit
• 7:40
  Speaker 5: about basketball, but you know, our favorite stock right now
• 7:43
  Speaker 5: is Madison Square Garden Entertainment. It owns the Garden, and
• 7:48
  Speaker 5: you know, the Garden is rocking these days with Jalen
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  Speaker 5: Brookson and the Nick's doing so extraordinarily well. And so
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  Speaker 5: we owned the two publicly traded companies that are affiliated
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  Speaker 5: with the Knicks, the MSGE Masiscre Garden Entertainment owns the Garden,
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  Speaker 5: and then Madisonquare Garden Sports owns the Knicks and the Rangers,
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  Speaker 5: the teams themselves.
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  Speaker 3: So yes, the Knicks, Well, finally go to New York,
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  Speaker 3: Go New York.
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  Speaker 2: We have something good.
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  Speaker 5: Yeah, they're They're fun to watch, they compete, they play
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  Speaker 5: so hard.
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  Speaker 3: So I want to ask for a audience, can you
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  Speaker 3: just explain what a contrarian investor is? Because I think
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  Speaker 3: I don't want to kind of skip over that. I
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  Speaker 3: know that you are one, but how would you describe
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  Speaker 3: a contrarian investor?
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  Speaker 5: The contrarian investor is someone who's an independent thinker who
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  Speaker 5: doesn't follow the crowd and tries to figure out when
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  Speaker 5: the crowd has it wrong. You know that one of
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  Speaker 5: there's a great investor named John Templeton who always talked
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  Speaker 5: about the fact you want to buy a stock when
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  Speaker 5: there's maximum pessimism, and that makes you a contrarian.
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  Speaker 4: So contrarian is someone who just doesn't follow the crowds.
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  Speaker 5: The examples would be, you know, you guys are all
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  Speaker 5: too young to remember, but when the stock market crashed
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  Speaker 5: twenty two percent in nineteen eighty seven, Yeah, the Ariel
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  Speaker 5: was four years old. We were calling all our clients.
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  Speaker 5: They send us more money. Our favorite stocks are on sale,
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  Speaker 5: Marcus down twenty two percent. We want to invest now.
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  Speaker 5: During the financial crisis in two thousand and eight and
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  Speaker 5: two thousand and nine, we were contrarians.
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  Speaker 4: Everyone was so fearful.
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  Speaker 5: The market kept going down every day in late you know,
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  Speaker 5: and during that horrible, horrible recession it didn't end till
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  Speaker 5: til March of two thousand and nine. But we kept
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  Speaker 5: buying our favorite stocks and he got cheaper. And then
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  Speaker 5: when the economy recovered, we did really well. And then
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  Speaker 5: finally the great example of this is during the pandemic,
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  Speaker 5: we were buying stocks like bail resorts that were completely
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  Speaker 5: shut down. We were buying Royal Caribbean when the ships
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  Speaker 5: were being docked and no one could get on a
• 9:54
  Speaker 5: cruise ship. No one wanted to go on a cruise
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  Speaker 5: ship during the during the pandemic. But the stock is
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  Speaker 5: done extraordinary with the well coming out of the pandemic.
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  Speaker 5: As people recovered. Now people want to be back on ship,
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  Speaker 5: they want to go skiing again, and those stocks have
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  Speaker 5: done extremely well. That's a real life example of contrarianism,
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  Speaker 5: you know, buying those types of leisure companies when you're
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  Speaker 5: in the midst of a horrific, horrific pandemic.
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  Speaker 2: Yeah, I mean nineteen eighty three you start this business.
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  Speaker 1: So I want to go back to this time because
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  Speaker 1: I mean it's very rare that we get to have
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  Speaker 1: a conversation with somebody who's.
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  Speaker 2: Actually created a fund.
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  Speaker 1: What was that process like, because you've seen a few
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  Speaker 1: revolutions here, right, you've eighty three.
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  Speaker 2: I was born. You weren't even born yet, I was.
• 10:34
  Speaker 2: We were both born.
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  Speaker 1: Obviously, we go into the technology period of the late
• 10:38
  Speaker 1: nineties with the dot com boom.
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  Speaker 2: Now we're in this AI revolution.
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  Speaker 1: Talk about what that was like and what you've seen
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  Speaker 1: over your time as of an investor.
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  Speaker 5: Well, when I started in nineteen eighty three, as you
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  Speaker 5: guys referenced there, we were the first African American money
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  Speaker 5: management company and mutual fund company in the country's history.
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  Speaker 5: And I have to say I was inspired here in
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  Speaker 5: Chica because we had these legendary giants that were so active.
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  Speaker 4: They were on top of their game at that time.
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  Speaker 5: John Johnson had built Ebony and Jet magazine, you know,
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  Speaker 5: just an extraordinary leader. I was fortunate I'd gone to
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  Speaker 5: high school with his daughter, in grade school with his son,
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  Speaker 5: and you know, he was someone who was always kind
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  Speaker 5: about giving me advice and console his concerns about being
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  Speaker 5: an entrepreneur. But he was again a role model, someone
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  Speaker 5: was very very helpful. The other giant at the time
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  Speaker 5: was George Johnson. You know, no relationship to john but
• 11:33
  Speaker 5: George Johnson created you know, Afroshine and Ultraschine hair care products.
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  Speaker 5: He also started an Independence Bank, the largest black bank
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  Speaker 5: in the country. He helped start start Soul Training with
• 11:45
  Speaker 5: Don Cornelius. He was an amazing entrepreneur and he was
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  Speaker 5: also someone that I had gotten to know a little
• 11:52
  Speaker 5: bit growing up. And that was where I was very lucky,
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  Speaker 5: you know, to be able to have those kind of
• 11:56
  Speaker 5: introductions and be so inspired by these these these gentlemen
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  Speaker 5: who not only had built great businesses and employed lots
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  Speaker 5: of people, but were very engaged in the community. You know,
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  Speaker 5: George Johnson always made made a home for Reverend Jackson
• 12:10
  Speaker 5: when he moved here to Chicago to start Operation Push.
• 12:14
  Speaker 5: He was responsible for sixty tables every year at the
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  Speaker 5: Urban League dinner. I could go on and on. He
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  Speaker 5: was just something that was truly really remarkably specialist and entrepreneurs.
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  Speaker 5: So that was something that was really lucky for me
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  Speaker 5: to see that and to see that you could start
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  Speaker 5: a black owned company at an early age and still
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  Speaker 5: be successful.
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  Speaker 4: And so that was it.
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  Speaker 5: I got a friend from high school to start the.
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  Speaker 4: Company with me.
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  Speaker 5: I went to all the friends and family and raised
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  Speaker 5: about two hundred thousand dollars to start Aeriel. First client
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  Speaker 5: was Howard University. They gave us one hundred thousand dollars
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  Speaker 5: out of their endowment to manage, and.
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  Speaker 4: We slowly built the firm from there.
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  Speaker 5: We manage about fifteen billion dollars now, so we'd come
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  Speaker 5: a long way from those early days that for one
• 13:00
  Speaker 5: hundred thousand dollars client. But again the friends and family
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  Speaker 5: that were just so kind to me to give me
• 13:05
  Speaker 5: an opportunity and believe in us that the early age
• 13:07
  Speaker 5: made all the difference, and you can't thank them enough.
• 13:11
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