Success leaves clues. Finance Strategists sat down with Max Osbon, founder of Osbon Capital Management. He shared his thoughts on the past, present, and future of the company, as well as the insight he gained from running the business. Q: Who are you and what’s your background? My background in investment management comes from my lifelong interest in mathematics. I chose to pursue a degree in math because I enjoy the creativity involved in solving formulas and creating frameworks that mimic real-life experiences. Recently I’ve discovered complex systems theory which has been particularly useful in describing what is happening to financial markets in 2020. As the world accelerates around us, complex systems theory gives us a useful toolkit to figure out where to focus and how to create scenarios, particularly when it comes to resilience, adaptability, and optionality. Q: Who has been your biggest influence, and why did they have such a significant effect on you? There’s no question: my father John Osbon has had the biggest influence on my investment career. We’ve worked together for seven years now and it’s been a great partnership. He had an amazing twenty-year career with Morgan Stanley before we teamed up. He has degrees from the University of Chicago and Columbia where he was exposed to both factors investing theories (Fama French) and classic value investing theories. I followed along in those frameworks until I developed my own approach which focuses on technology and innovation while looking into resilience and embedded optionality. He’s a serious reader so I’m usually trying to keep up with his reading list. I’ve found that reading as many different investment approaches as possible is very important. There’s no shortage of opinions in the investing world. Eventually, you tie together what is working and what is not. The world changes, and there’s no silver bullet or perfect strategy. Q: Knowing what you know now, what would you have told yourself when you were in your twenties? I would have told myself to spend more time on microeconomics instead of macroeconomics. Schools tend to push macroeconomics. Macro is helpful in setting up the backdrop for investments. Macro tells you that you don’t want to fight the fed, or population trends, hot sectors, or major persistent flows of capital. Micro, on the other hand… you can do very well with a microeconomics education because it helps you understand where growth and economic opportunity originate. Micro shows you profitability, operating margins, revenue sources, customer acquisition, etc. Investment classes today should start out with real microeconomics examples. Apple sells its iPhones at a 30% margin. Camping World finances their inventory and rates are really cheap. These types of real-world details are crucial to understanding investing. Identifying a quality business is easier than trying to understand how currencies, geo-politics, metals, and commodities interact. Look at the performance of famous macro-investors. It’s all over the map and difficult to follow. Look at the performance of any business owner or investors in businesses, they understand exactly where the customers come from and where the dollars flow. Q: What is Osbon Capital Management? We are a multi-family investment office based in Boston. We manage private family money on a fiduciary and discretionary basis, meaning we are free to invest where we feel it makes the most sense for each client. Investors choose to partner with us because we can provide highly customized solutions with nuanced wealth management applications. Clients like that our team spans multiple generations and that gives us a diversity of perspectives. We’re optimists by nature. You have to have a certain amount of faith in the capabilities of today’s leaders and entrepreneurs in order to participate in their growth trajectory. There are limits to that optimism, of course. I would define those limits as healthy skepticism. Ultimately, we are here to generate investment returns for our clients while managing the many forms of financial and investment risks that can arise when you least expect them. Q: What makes your company different from its competitors? Osbon Capital Management is 100% privately owned and operated. We are able to develop our own investment strategies. We would have to follow an internal CIO or firm philosophy if we had an owner. Too many firms end up with portfolios A, B, and C which are designed more for firm efficiency and less for the end client’s benefit. Custom wealth management strategy is the only way to go. Q: What led you to start Osbon Capital Management? We firmly believe that private investment firms with personal relationships are the best vehicles to manage and grow family wealth. Q: What has the experience of building the business taught you? Adaptability, curiosity, patience, and discipline are crucial for success. Q: Where do you see things headed for you in the next 5 years? The investment world is full of dogmas, religions, overconfident opinions, fears, scary headlines, warnings, etc. Over time I’ve found the best way to cut through that noise is to find specific people to follow. The industry is currently stuck in a loop debating “active” vs “passive.” That debate will eventually fade as both sides will realize that they are both correct. There are no real passive investments, but there are rules-based investments. I’m most excited about investing for growth and optionality. There is no shortage of amazing and innovative companies that are leading the way forward. Investors who have patience and can stand some volatility will be able to take advantage of incredible compounding opportunities if they adopt an optionality mindset. About Osbon Capital Management Osbon Capital Management brings organization and confidence to family wealth management through deep experience and a nuanced approach. They emphasize long-term investing, acting, and planning. Through globally diversified portfolios, paired with a deep understanding of a family’s future liabilities, Osbon Capital is able to bring its clients closer to achieving their investment goals. Learn more at https://osboncapital.com/.
Introduction
Who is Max Osbon?
Business
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
