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From the time I was a young kid, I’ve always had an engineering mindset. I love to figure out how things work.”
Joshua Bennett is passionate about everything he does–whether it is finding overlooked small and mid cap stocks, leading the board of the private school he went to as a kid, or driving high-performance BMWs around a racetrack in his limited free time. “You can’t be half-engaged,” he said about his driving, although he could have been talking about his other pursuits. Josh, senior portfolio manager and chief operating officer at Weatherbie, a subsidiary of Alger, comes from a family of money managers and has followed in their footsteps. His grandfather was chairman of a leading Boston asset management firm, State Street Research & Management Co., and his two uncles were top executives in the industry. Josh learned some valuable lessons from them, but he forged his own path into the world of finance, giving himself plenty of room for experiences outside of the investment industry that have shaped him into the investor he is today.
You could say you have money management in your genes?
I’m not sure that’s possible, but I certainly grew up around the business. My grandfather, George Bennett, was a successful investor as well as a pioneer in the industry. Without his willingness to get into the investment business shortly after 1929, when no one wanted anything to do with investments, I’m not sure I would have pursued this career.
Can you remember when you first thought, “I want to do that?"
I remember going to a family party at my uncle’s house, where he had a bucket full of Clearly Canadian beverages. They were popular in the 1990s. I said, “These are great. What are these?” He said, “Believe it or not, I own stock in the company.” When I asked what that really meant, he said he owned a piece of the company that made the drinks. He proceeded to tell me a little more about how he had an analyst that researched the company and believed the opportunity for growth was much bigger than the market understood, and that created an opportunity to earn a return for his clients. I thought that was a very cool concept.
What did you assume you would do for a living?
From the time I was a young kid, I’ve always had an engineering mindset. I love to figure out how things work. As a kid I would take things apart and put them back together—things like radios and even the engine on my dirt bike. I loved planes, cars, and motorcycles. I thought that one day I’d design and engineer products that took performance to new levels.
In college I began to lose interest in some of my science classes. I spent two years as a physics major but as we moved into quantum physics it became too ethereal to really hold my interest. Around that time I took my first economics course and absolutely fell in love with it. My eyes were opened to brand new tools that let me understand the inner workings of a business or an economy; it was even relevant to the way I bought groceries on the weekend! Economics combined with mathematics helped me understand and dissect the world around me.
Does money management require some of the same talents as science?
I realize now that the curiosity I had as a kid is critical in this business. The best money managers ask question after question. They dig deep. They have a hunger and an inner desire to truly understand what’s going on inside a company and in the competitive landscape. You can’t be someone who is satisfied with the first answer from management. It also fed into my desire to compete and win at the highest levels, because ultimately this is a job where we are trying to beat the benchmark every day.
Is there something especially appealing about the smaller companies you study?
I love the idea of discovery, of finding companies that most people don’t know today, but are likely to hear about in two, three, or five years. That is exciting to me the way Clearly Canadian was to me as a kid. To go deep on smaller companies, you need to be ahead of the curve, to understand trends, and the capabilities and strategies of management teams before a lot of people have found out about them. Smaller companies that are less known provide opportunities in the market to think creatively about longer term prospects for a business.
Speaking of small companies, you have also had some experience with impact investing in Africa.
I’m interested in impact investing broadly and traveled to Kenya on vacation with a friend of mine to visit a leading processor of cashew nuts. They were looking to expand to other products, which would create 500 jobs, but they needed to build a new manufacturing arm. This required a loan of roughly $250,000. If they went to a bank, they would likely pay an interest rate of 25 percent to 30 percent. I volunteered with a consultant to try to find other ways for them to raise that money from investors who might care about the mission of the organization.
Was it a success?
They did raise the money. I found it personally rewarding because it fed a passion in me to empower local people to take their business to the next level. It also helped me realize that the analytical research skills I developed on the job can be used to directly impact the broader world. I loved that.
What do you do when you are not working?
One of my other passions is education. It’s a small way I can give back to the world. I love being in the classroom and teaching. I have been a guest lecturer at Dartmouth, where I got my MBA, and at Wheaton College (IL), where I studied economics as an undergraduate. I have also been a trustee for many years at Lexington Christian Academy (outside Boston) and I was recently elected chairman of the board. I attended the school, I met my wife there, and both my kids have gone there. The school’s core mission is educating students for the good of the world and not just themselves.
I gather you are still very interested in cars too?
Two or three times a year I take my car to the racetrack to attend “high performance driving events” through the BMW Car Club of America and other driving clubs. Last fall I spent a weekend at Watkins Glen in upstate New York, one of the most historic racetracks in the nation. Even though it was not a race, we drove at race speeds with qualified instructors—130 to 150 mph on the straightaways and 80 to 90 mph around the corners. At those speeds, you have no choice but to be fully engaged!
Any parallels to managing money?
Yes, I suppose there are. At the track you do significant preparation ahead of time but in reality, once you get out there, everything is likely to change. People spin out and suddenly you have to make a quick course correction. Rain may move in and temperatures change throughout the day. It is the same in my day job. You may understand your companies and the competitive landscape well, until suddenly a competitor is acquired or a company misses its earnings projection and you have to adapt. I love the idea that in both realms it’s important that you do all this planning, but when you are there in the moment you can’t ever fully prepare for every outcome.
Any other outside activities we have left out?
I enjoy reading well-researched books that bring real history to life, and I enjoy the arts and music since that’s where my wife puts a lot of her creative energy. I enjoy fitness outdoors with my kids: hiking, mountain biking, and road cycling primarily. I guess you might say I’m a bit of an “adrenaline junkie,” but I’ve also recently taken up yoga at my wife’s suggestion to try and balance that out a bit!
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Josh's Thought Leadership Content
Weatherbie Enduring Growth
Weatherbie Specialized Growth