First rule is, “FIVE” is too many. Always break any problem into THREE. Once they are resolved, identify the next three.
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Gary Griffiths, Co-Founder & Managing Partner of Wisdom LLP, Silicon Valley.
Gary is a serial entrepreneur, founder and angel investor. As a 35-year veteran of the high-tech industry, he has led some of the web’s most innovative companies. Prior to co- founding Wisdom LLP, Gary was CEO of iPass (NASDAQ: IPAS), a leader in global Wi-Fi technology and services, which was acquired by Pareteum, Inc (NASDAQ: TEUM) in February 2019. He was also president of products and operations at WebEx, (acquired for 3 billion dollars by Cisco), Co-founder and CEO of Everdream Corporation, a SaaS company (acquired by Dell in 2007), and Co-Founder/CEO at HEAT.net (acquired by Sega in 1999). He has served on the board of directors for a number of private and public companies, including Silicon Graphics International, (NASDAQ: SGI), and Janrain, a customer identity management SaaS company. He is currently an advisor to two private equity funds (Parthenon Capital and Day View Capital).
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Um, to make money? Seriously, I guess I don’t consider myself in the “finance” industry, though technically I guess that is what I am. But really, I still think our myself as doing what I’ve done my whole career: building companies in high tech. And while today the balance has shifted from more “hands-on” to “more investment,” I’m still building companies.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
In one of my startups, our fiercest and much better funded competitor announced a new name and brand. Thinking that they may not have gotten around to trademarking their new name yet, we applied for it — and were awarded the name! What did I learn? That we could get away with a lot of guerilla warfare in business. So at the next Comdex, we contacted the vendor providing the urinal screens in the men’s rooms and paid to have our competitors brand printed on the screens.
Are you working on any exciting new projects now? How do you think that will help people?
- We’re working on over twenty projects we consider important across a broad range of industries and technologies. To highlight a few:
- Canvas GFX — promising to become the equivalent of .pdf for products (and all things visual)
- OrigenAI — making oil reservoir modeling and simulation faster, less expensive, and more accurate
- Summit Nanotech — a new clean process for mining Lithium, a strategic element in the clean energy economy
- Phoenix Molecular Design — breaking new ground at the molecular level to defeat Triple Negative Breast Cancer, which is currently a death sentence
- Evercloak — who has inverted a thin film membrane than reduces carbon emission from air conditioners by half
- Digbi Health — a therapy for beating obesity customized for the individual by their micro biome
- Infinstor — new means of data analysis and “time-slicing” to make Machine Learning and AI more effective and efficient
- CipherSkin — the ultimate “wearable computer;” a sensor-infused fabric for use in physical therapy, fitness, and defense.
- Listo! — providing financial services to low-income, minority families
- Noteworth — providing a comprehensive software package to help hospitals manage their patient life cycle
- And about a dozen more.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There are several, from the US Navy to IBM to Silicon Valley. Perhaps Jack Kuehler, former president and vice chairman of IBM was the most remarkable. He, like many of the IBM senior execs at that time (80s) were without exception gentlemen — rare and often forgotten today. They were men and women of honor and integrity, who understood the big picture — and that the big picture was not always short term corporate profits. In the early 80s, the US semiconductor was struggling and, like virtually all technologies ahead of it (consumer electronics, cameras, etc.), were being lost to Japan. Jack Kuehler believed that having a strong core technology industry, particularly semiconductors, was strategically important to the nation. Kuehler convinced the IBM board of directors to buy 30% of Intel, which needed financing and was under severe pressure from Asian competitors. This was not done for financial gain; in fact this investment was made without fanfare and, once it was clear that Intel’s security was intact, the position was just as quietly liquidated. It was this kind of selflessness and awareness of “bigger” issues that stayed with me.
Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?
I’ve always loved good crises. Seriously. Every disruption of the status quo leads to new opportunities, as long as you don’t panic and look for them. For example, 2008 was a financial crisis, causing “the herd” to sell — in mass. The opportunity then was to buy when everyone else was selling. In the current pandemic, the long term change in behavior — lockdowns and isolation, has resulted in a 5–10 year acceleration in the acceptance of technology. That is, technologies that have been around for a while, like videoconferencing, suddenly have become a part of everyday life. And it will never go back — not out of fear of a pandemic, but because it is just better. As far as advice to those feeling anxious, it is simple: people typically stress over issues of which they have no control. Serenity lies in determining what you can control, and what you cannot, and then focusing only on the former while ignoring the latter.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing 500 dollars every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
Over the long term, disciplined investing in the S&P Index has been a winning strategy. The trick is not trying to time the market, especially getting caught up in panic selling. And many did panic sell in March, when the S&P plummeted with the double whammy of Covid-19 and the collapse of the oil market. In fact, this was a strong buying signal; within a month the market had removed and those with the guts to buy in late March realized as much as a 50% return within a couple of months. That said, simply holding despite the terrifying drop in the indexes in March would have been a viable strategy.
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
For people with high risk tolerance, a long time horizon, and disposable income, I believe venture capital in high tech is an excellent investment now. For others, public equity markets still offer the best refuge — which is why the stock market remains relatively high compared to the economy.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
I’m a fan of traditional energy: oil and gas. We may not like it, but we need it. We still have an abundance of oil and natural gas, and despite the hype surrounding solar or wind energy, the energy-density is far inferior to fossil fuels, and not practical due to the reliability (in the absence of adequate storage solutions). Unless public perceptions of nuclear power change, O&G is the only practical short-term solution, and therefore a viable investment (not to mention that major O&G corporations have portfolios rich in renewable energy as well).
Are there alternative investments that you think more people should look more deeply at?
Not sure what qualifies as alternate, but I’m fond of the materials and the processes that support them that will fuel the growth of alternate energy consumption; for example, metals like copper, cobalt, nickel, lithium etc.
If a person in their thirties and forties came to you today and said that they have 10,000 dollars that they want to put away today for a long term investment what would you advise them to do with it?
I would give the same advice as I did in my response to the S&P 500 question. Cooler heads prevail in the midst of a crisis, so looking for opportunities where others see catastrophe is always a good bet. It is also good to diversify.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- First rule is, “FIVE” is too many. Always break any problem into THREE. Once they are resolved, identify the next three.
- “Buy when there’s blood in the Streets.” The story is the same every crisis — buy when the herd is selling. I wrote a blog of this title on March 23rd; got lots of feedback summarized as “I agree with you, but not yet.” In other words, they didn’t get it. The upshot of this is not to follow the herd — or you become the herd. And the herd isn’t generally successful.
- Same point as above: separate, in all situations, those issues you can control vs those you can’t — and act aggressively on those you control.
- Diversify: there is always something going up — even if it is on the short side. That is, hedging is smart; small bits of insurance (Puts and shorts) will subtract from profits in a bull market, but can mitigate massive losses in a market crash.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Given enough time, the conventional wisdom is always wrong. The earth isn’t flat, not is it the center of the universe. Newtonian physics were “laws” until proven wrong by quantum mechanics. Eugenics. Blood-letting. Lobotomy.
And now we know bell bottom jeans weren’t really that cool. As humans, we’re arrogant, but we really know nothing. So we make stuff up — money, countries, religion etc to make us feel like we’re part of something bigger. We really know very little about how the human brain works, yet that doesn’t stop us from trying to build computers to emulate humans, and showmen like Elon Musk to frighten people into believing robots will soon rule us. The point is to always challenge the status quo, always ask “why?”
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
I would love to see a resurgence of nuclear power. It truly is our best source of virtually infinite, clean and affordable power.In the 50s — this is fact — the concern that since nuclear power was essentially free, unlimited power would lead to global prosperity, followed by a population explosion that would end humanity. Yet while European nations like France were almost entirely dependent upon clean, safe nuclear energy, the politics of wind and solar managed to turn public sentiment against one of mankind’s greatest achievements. To those who fear nuclear power isn’t safe, the Navy has safety and successfully deployed nuclear reactors for over 60 years in the most hostile and mobile environments: submarines.