Who's Graham?
Graham Duncan is the co-founder of East Rock Capital, a multi-family office investment firm that manages billions of dollars for a small number of families and their charitable foundations. East Rock was co-founded by Graham and Adam Shapiro. In 2005, Graham began working with their founding client, the Miller family, to hone their unique investment approach.
Graham's professional experience includes co-founding the independent Wall Street research firm Medley Global Advisors and working at two multi-manager hedge funds. Mr. Duncan graduated from Yale with a BA in Ethics, Politics, and Economics. He serves on the board of the Sohn Conference Foundation and is a member of the Council on Foreign Relations.
What Does Graham Do?
In his own words: "I try to find people who are better at doing a thing than I am at doing that thing."
Graham doesn't invest in companies or ideas, rather he invests in the people who do the investing in companies and ideas. He meets with thousands of investment managers every year giving him a very unique perspective on the investment landscape. At the end of the day, Graham is paid to exercise his "taste" in people.
"I think of it as having a certain taste in people. And I like taste because – and I think I had a certain taste back then. And it’s evolved, and I can articulate a little better than I could back then. But if you think of taste – I like taste over judgment because judgment implies there’s one answer."
What Separates the Great Investors from the Rest?
Graham's seat puts him in prime position to answer this question. He believes that the "great ones view investing as a game, and they know exactly what game they’re playing." This game has five levels as defined by Graham:
1. Apprentice — learning the game
2. Expert — mastering the game you were taught
3. Professional — making the game you were taught fit your own strengths and weaknesses
4. Master — changing the game you play as part of your own self-expression and operating at scale
5. Steward — becoming part of the playing field itself and mentoring the next generation
Most investors never make it to Level 5 for a wide variety of reasons, but if you can identity Experts who you think have the chance of becoming Masters, it's probably a good idea to allocate capital and/or time to them.
What Graham has identified as being the number one trait that all the great investors share is they can very crisply articulate what their driving force is and while they may stray from it occasionally (think of a car driving down the highway, that car might go off the lane a bit, but never completely off road) they never lose sight of that original driving force. This sounds obvious and easy but Graham believes that most Professionals are derailed because they lose sight of that original vision.
Talent is the Best Asset Class
"Most of money management, and perhaps even business activity generally, is just lots of principals & agents building & destroying trust with each other over & over."
