But crediting only the bull market ignores several choices Paine Webber made in the early 1990s that mostly defied conventional wisdom, yet turned out to be right-at least so far. 2 in any of its major businesses, and it blundered through the 1980s as it repeatedly tried and failed to turn itself into an investment bank. To many Wall Streeters, the firm's survival represents the dumb luck of the bull market and the triumph of mediocrity. Over the past five years the stock of stodgy Paine Webber has not only kept pace with Merrill's but also trounced both the S&P 500 and the shares of glamorous J.P. Revenues, earnings, commissions, and assets under management grew at higher rates than Merrill Lynch's. The company's first-quarter earnings beat Wall Street estimates by almost 40%.
Right now it's Paine Webber that's looking good. "Its reason for existence was to make others look good," says Bob Upton, senior director at Fitch IBCA. Many on Wall Street think that Marron, a serious art collector, is more interested in his Lichtensteins and Jasper Johnses than in financial planning or online trading-and that Paine Webber long ago lost its way. Its CEO, 64-year-old Donald Marron, has ruled since 1980-when the Dow was below 1000 and calculators were considered high tech. This is a firm whose lifeblood is the commissions it earns for trading stocks and bonds on behalf of individual investors. If so, the company atop the endangered-species list is Paine Webber, the nation's fourth-largest brokerage.
It's obvious: Traditional brokers are middlemen on the verge of extinction. "You can add that to the long list of things he was wrong about." "We're betting on ourselves," says a confident woman in another ad. "My broker said, 'You're gonna hate online trading,'" says one man in an ad for e-brokers. (FORTUNE Magazine) – To watch the television ads for online brokerages like E*Trade and Ameritrade, you would think human brokers were overpriced, arrogant, and dumb.
0 kommentar(er)
