Professor S. Joseph Wickwire, II, CFA Interview

Biography: Joe Wickwire had a 32-year career in the Investment Management Industry (retiring on 3/31/19) serving as a portfolio manager at Fidelity Investments where he managed the Fidelity Select Gold and the Fidelity Global Commodity Stock Funds. Prior to joining Fidelity in June 2007, Joe spent 20 years at Wells Capital Management (formerly Evergreen Investments) in Boston. While there, he managed a precious metals fund for Evergreen from 2004 to 2007. Prior to that, Joe served as a director and an analyst from 1999 to 2004, where he was responsible for the Canadian, Australian and New Zealand equity markets, as well as the international precious metal, base metal and paper industries. From 1997 to 1999, Joe was a senior research associate. He served in a variety of service and sales roles for Evergreen Investments from 1987 to 1997.

In 2011, 2016, and 2017-2018, Brendan Wood International named Joe one of its “TopGun US Metals and Mining Investment Minds.” He has appeared on the Bloomberg Business, CNBC and Fox Business television news channels; been quoted in Barron’s, The New York Times, Financial Times, and The Wall Street Journal; and has presented at Chicago’s Booth School of Business, Boston College’s Carroll School of Management, Cornell’s Johnson School of Management, Notre Dame’s Mendoza College of Business (London) and the Harvard Business School.

Joe received a B.A. degree in History from Boston College in 1986 and a MBA with a concentration in investment finance and international business from Bentley University in 1993. He is a CFA charterholder, member of the Boston Security Analysts Society and serves on the Bentley Hughey Center for Financial Services Advisory Board.

Beginning in January 2020, Joe has been an adjunct professor at Bentley, where he co-developed and co-teaches “Advanced Topics and Career Perspectives in Investment Management” (FI-322) with fellow Bentley alumnus and Fidelity colleague, Rich Thompson. This pioneering class focuses on understanding where the investment management industry is going, the career opportunities within and the critical skills required for success.

Joe and his wife, Cindy, live in Boston’s South End, and are the proud parents of Jacqueline and Michael. They are actively involved in several philanthropic efforts including the Catholic School Foundation (Cindy as Trustee), BC (Board of Regents) and Bentley (President’s Council and Wall Street 101).

LinkedIn: https://www.linkedin.com/in/joe-wickwire-b0341a194/

Interview Q&A:

Do you think graduating with a history degree helped you, or hurt you throughout your career?

I think it was a key component to my success in that there are a lot of overlays between history/liberal arts and the Investment Management industry. If you think about the world of

investing, there’s the opportunity at a point in time that you’re evaluating but you usually don’t get there in isolation, there’s usually some historical backdrop that got you to a potential investment opportunity. Then there’s an analysis process that you must go through assessing the probabilities of outcome scenarios to determine whether you have an attractive risk/reward proposition. There’s a before, a current opportunity, and an aftermath, and that’s very applicable to the world of studying historical events. You’re typically studying one period of time, or one isolated event, but from a context standpoint, there’s a background of how you got to that point in time, and what the ramifications were after the event of study. I believe from that process standpoint, there is an overlap of being a history major and being a long-term, oriented investor. I would also say that being a history major teaches you to be very skeptical of the inputs because everyone has an agenda. History is typically dictated from a point of view, and you need to very critical of assessing a historical event about the inputs from which you are drawing your own conclusion and forming your own opinions/perspectives. That’s also applicable to the world of investing because you must be critical of inputs (what’s news, what’s noise, etc.). Therefore, being a history major taught me the process of properly evaluating inputs. In investing, context and process are critical.

Did you strategically major in history knowing that you wanted to be an investor?

As an undergraduate, I would be classified as a “late bloomer.” I didn’t “figure it out” until the end of my days at Boston College. I went to BC when I was seventeen and relative to my classmates, I was immature regarding understanding the rigor and discipline necessary for a successful academic career. I’m very goal-oriented, but I need a goal to shoot for, and I really didn’t know what I wanted to do/study. My parents gave me a piece of advice (and exercised enormous patience) as they encouraged me to study what I was really interested in and that I’d figure it out along the way. I was always interested in history, particularly military history. It came very natural to me, which is how I chose the major and decided to minor in some business disciplines to pick up the business skills along the way. I did the best I could with figuring out what it is I wanted to do and what I didn’t want to do, which worked quite well for me. It led me to pick up one of Peter Lynch’s books one day, One Up on Wall Street, and it changed my life. He wrote about the importance of liberal arts from an investing standpoint and how it can work with business skills in a collaborative fashion to show that there are many different lenses that you can look through to help you round out your investment perspective. That has certainly been the case for me as well. Business students tend to gravitate towards “what’s THE right answer” and sometimes struggle to understand that many times the right answer is “it depends”. It just shows that we live in a world that’s multiple shades of gray, not black and white. A liberal arts background is much more comfortable in dealing with fuzziness/uncertainty than a typical business major, or someone who is mathematically inclined. It helps you develop context for the most important skill, which is decision-making. Investing is an art, not a science. As I said previously, in investing context and process are critical. In conclusion, even though I did not know it at the time, becoming a history major was a great decision for me. This was especially true when I eventually crossed paths with the gold asset class.

Can you talk about how you ended up in your role at Evergreen and how you moved up within the company?

Evergreen (then Keystone Investments) offered me an opportunity to enter the industry in an entry level role in the service area. It really was the only spot available for me in the industry, given my rather modest academic record of achievement at BC. All companies fundamentally make (manufacture) a product or service, they then sell the product/service, and they ultimately service the product/service. By getting in the industry via the service role, I was in, and had the opportunity to contribute, learn and prove myself. I had to work my way towards the manufacturing side of

things which was the investment management side. I started off working in the service side of the industry, then got promoted to the Sales and Marketing side, and ultimately landed in the Investment side because of this (and my Bentley MBA). The investment side (analyst and portfolio manager/Peter Lynch) really appealed to my analytical and competitive nature. As a kid in elementary school, I used to carry around a baseball almanac of statistics and was always analyzing sports from a quantitative perspective. This ultimately mapped well to investments. That’s what I focused on but I had to ultimately prove that I had what it took. In a great moment of initiative, I got the bios of everyone in the Evergreen investment department and saw that the common denominator for most of them was a MBA. Therefore, in 1989, I started pursuing a part-time MBA at Bentley. I focused on Investment Finance and International Business. Continuing my work at Keystone, the Service side was adjacent to the Sales and Marketing side which I then made a pivot to. I did that for about five years and did very well. I had the top territory in the company while getting my MBA at night. By the time I was ready to graduate from Bentley, I had well established myself as a value-add component of the Sales and Marketing team and soon had tried to get in front of every Analyst and Portfolio Manager to be a part of the Investment team. To my advantage, the company, now renamed Evergreen, was very supportive of my desire to move within the company because I was adding value. At the time, it wasn’t obvious to the Investment division that they should bring me on board, and I was becoming exhausted in my efforts to pivot again, until one day when I ran into the new head of International Equities. I went to several of his presentations, sat in the front row, and asked a ton of questions which allowed him to get to know who I was. We instantly clicked, and he understood my expertise in knowing the distribution/sales side of our business could be helpful getting him more assets under management (AUM). It was a true enabling win/win where I got a chance to show what my Bentley MBA could do for the firm as an International Equity Research Assistant, and he got more access to assets for the team to manage. That is how I wound up in my role and the Investment division over ten years. It was a very non-traditional path. There are not many people in the industry who have worked in the service, sales and the investment sides of the business. I am, and it really helped my career, especially when I got to Fidelity.

What drew you to commodities and eventually running a gold fund?

While I was earning my MBA, I took an International Finance course with Professor Jahangir Sultan. In one class, we were talking about the role of gold and the global financial system. As you may know, the United States is the largest owner of gold. It’s 75% of U.S. foreign exchange reserves, and a key reason why the US dollar is the world’s reserve currency, which is everything to the world of International Finance. This is where being a history major helped significantly because there is no currency that has more history than gold. Gold has been a currency and commodity for over four thousand years. In class, this is where the lightbulb went on when understanding that you don’t need gold unless you question the agenda of central banks and policy makers. You own gold as a financial asset insurance policy, so if you believe that the actions of central banks and foreign policy makers on a worldwide basis are not protecting your global purchasing power, that’s where the gold asset class shines within a risk tolerant and diversified portfolio. That is also how gold is described in a portfolio and if you look at the historic performance of gold, that’s exactly what happened. For example, in the 1970s when hyperinflation was a big problem, gold was an outperformer while the S&P 500 was down over that period. Another example is if you look at the Lost Decade, starting with the DOT.com Bubble and extending through the Financial Crisis (2000-2009), there was a deflationary backdrop because of globalization, enormous amount of money printing globally and the S&P 500 was down almost every year while gold asset class went up significantly. This study of gold fascinated me and was it was very fortuitous that the gold asset class and I would formally

meet-up when I made my move into the International Equity Team at Evergreen. Luck is when opportunity meets preparation. Or in Harry Potter-ese, “the wand picks the wizard”.

When was promoted to Analyst, I was following Canada, Australia, and New Zealand, nobody cared about it other than my department because of the DOT.com Bubble was driving the US market to new highs. One of the key things about Canada and Australia is that they have a disproportionate amount of their economies and markets in commodities, including gold. After the burst of the Dot.com Bubble, the super cycle in commodities took off and the only person at Evergreen looking at commodities and gold was me. I didn’t pick gold, gold picked me. Everything was imploding and I was the guy with the asset class that was going up.

Was your move to Fidelity a large risk? What made you want to jump into this role?

In February of 2004, the PM that was running the Precious Metals Fund at Evergreen unexpectedly decided to retire and the only other person who could take up that role was me. It was circumstance and fate. It was luck, it was opportunity meeting preparation. It was an unexpected and scary field promotion. The fund had been one of the best performing gold funds in the world, and now I was running it, with little advanced notice. While initially feeling extremely overwhelmed, I outperformed in very volatile up and down markets for three years, and it caught Fidelity’s attention. In April of 2007, Fidelity called, and their pitch was this, “How would you like to play for the Yankees?”. Let’s just say, it did not take very long for me to realize this was an opportunity of a lifetime. Growing up at BC, in Boston and at Bentley in the shadow of Fidelity and Peter Lynch, I realized this was an opportunity that was only coming once. It was the least risky thing I have ever done in my career. I had twenty-one interviews over six weeks in which case I quickly discovered that I wasn’t interviewing there, they were recruiting me which was a nice dynamic. Fidelity had it all, resources, talent and a rich history and culture of investment success for its clients. They were all about the fit, which is something that everyone should keep in mind. When you’re interviewing anywhere along your career, you need to be a proactive interviewer. It needs to be a win-win. You need to test for culture, resources, and whether it’s a place where you can grow professionally. If you’re going to work hard, you need to understand there is no separation between the personal and the professional. The culture, the resources, and the opportunity was too grand to pass up. My twelve years at Fidelity proved to be the most fulfilling and greatest highlight of my investment career. In my retirement video, Peter Lynch, Will Danoff and other colleagues said some wonderful words about working with me that were the best “bonuses” I could have ever earned. The four best decisions of my life were BC, Bentley, marrying my wife, and Fidelity (chronological order, my wife is #1best).

How did both the Fidelity Select Gold Fund and the Global Commodity Stock Fund challenge you? How did your process play a role in your success at Fidelity?

Philosophy and Process is at the cornerstone of everything investors do. When shifting from the Evergreen fund to the Fidelity fund, I was moving into managing a fund that was three times what I was used to ($700 million to $2.1 billion) but also influencing another $800 billion of Fidelity AUM. At Evergreen, my investment opportunity set was to have something that is highly liquid (physical gold) which allowed me to tweak beta up and down as I see fit against the backdrop of gold equities. That was allowing me to get relative bottoms, or relative tops correct in the asset class to dial up or dial down the beta in my portfolio under certain circumstances. That was a big part of my competitive advantage. The Fidelity Select Gold Fund did not have that ability. In a rare moment with negotiating with Fidelity, I told them that having the gold bullion price exposure was a critical component to my process. They understood and enabled the Fund to have that ability. The dynamic at Fidelity was I was running a larger fund with a relatively similar tool kit, but the liquidity space was tight. When you’re running three times the amount of money, you need to be very nimble with how you’re thinking about getting in and out of markets without disrupting price. My job was to figure out how do I get the exposure that I want without disrupting the price. Not only was I responsible for running a successful fund, but I was also responsible for guiding the firm across the gold asset class. That was a huge degree of difficulty that I had to get on top of sooner rather than later and luckily with the resources made available to me and being surrounded by some of the world’s best investors, I was able to do so. My job was to make sure that my shareholders and the rest of the firm’s shareholders were appropriately exposed to the asset class across market cycles. It was a lot more dynamic doing this at Fidelity (~$800b+ AUM) than at Evergreen (~$10b+ AUM). Fidelity was happy with how I managed Select Gold and created a one-stop shopping fund for broader commodity asset class exposure for me to manage called the Global Commodity Stock Fund. It consisted of energy, metal & mining, steel, paper, and agriculture all over the world. Running both funds was like driving two different cars at the same time. There was never a dull moment and enjoyed collaborating with the other analysts and PMs across the firm, around the world. It was amazing journey.

In terms of giving back, why did you decide to come back to Bentley to teach?

At BC, one of the core themes of the university is “Men and Women for Others” and I think it permeates the mindset of BC students. It’s the belief in making the world a better place in as many ways as you can, and it is foundational to me as well. Seeing what others have done philanthropically, such as the Johnson and Lynch Families, was impactful to me and it has become a core component of my life. Rich Thompson and I believe that our Bentley educations have done so much for each of our careers, which far exceeded our wildest expectations. Consistent with this has been our desire to give back to Bentley in as many ways as possible. Our respective retirements in 2019 provided an enabling window for teaching at Bentley. When Professor Kartik Ramin pitched the idea of creating a new class that would teach the practical side of the investment management industry from our career perspectives, Rich and I jumped at the opportunity and worked with Professor Raman to create what has become FI 322 “Advanced Topics and Career Perspectives in Investment Management”. Our goal is to teach Bentley students where this large and Boston-centric industry is going (and why), what are the career opportunities there, and what are the critical skills required for success. We started with twelve students in January 2020 and now routinely max out at ~thirty-seven the first day of registration.

We hope to flatten students’ learning curves, hone skills and give them exposure to industry leaders that they can’t get anywhere else. Our class aims to put the finishing touches on their world class skills so that they are prepared when they enter any industry upon graduation. Bentley has had a historic competitive advantage of bringing a practitioners, academics and students together in the classroom for a holistic, real world learning experience. We are trying to really put that into practice for our students by engaging with our students on what we learned during our journeys and most importantly where the puck is going and why from an industry standpoint. Our focus is on the importance of philosophy and process, understanding the “why”, and how to think probabilistically from a decision-making standpoint and will benefit our students whether they go into the industry or not. We derive enormous satisfaction from the impactful engagement we have with our students which often extends beyond the semester. We tell the students every semester they can benefit from our collective sixty years in the industry beyond the semester if they desire to do so. I have established on LinkedIN, the FI322 Alumni Network that former students can join after their semester, to continue the conversations and sharing and to also broaden their shared FI322 networking opportunities. Currently there are ~175 former students in the network dating from Spring 2020 to the current. Seeing our students thrive is our compensation and our thank you to Bentley.

What is a piece of advice you would give a student entering the Investment Management industry?

As far as starting out in the industry, understand where the industry is going and why, and where your company fits within that backdrop. Then with your job, really live the mantra of contribute and learn. Ask yourself how you can help your company win and how you can I learn as much as possible. I always tried to get my hands on organization charts. They typically explain the flow of every company. From an investor standpoint. Lastly, your career is a journey, it is not how you start that matters, but how you finish. Embrace career optionality, putting yourself in positions where many good things can happen and be ready to pivot when “luck” (opportunity meets preparation) comes your way.

From an investor standpoint, I think it’s important to be a well-rounded investor and to make sure you understand the difference between being an investor and being a speculator. To be an investor, you need to have an investment thesis that has a positively skewed risk/reward profile. Your investment duration should be as long as possible (certainly longer than a year), immune from randomness and be guided by a philosophy and process statement. Most importantly, understand that every day is a learning opportunity. There is no substitute for experience. Learn from your mistakes and no one is right 100% of the time. Be a student of the markets. This will allow you to form the fundamental, quantitative and technical skills that others may not know and are a necessity in the industry. Just being a stock picker is a rather narrow way to go about the industry. The industry has pivoted toward CFA being equal or greater MBA or MSF. Holistically, you can be much more successful overtime if you broaden out your skillset to ensure that opportunity can present itself to you in multiple different ways. It is also part of the fun in learning. The great thing about the careers that Rich and I had is that we had the capacity to be a little better tomorrow than you were today. It is a constant opportunity so that you are never bored. Always tweak your process so that you can always challenge yourself to make yourself a little better. You need to be passionate and fired up about what you do. I don’t know a single “successful” person who doesn’t love what they do. I don’t care what you do, I just want you to be passionate, work hard, work smart, be intellectually honest, surround yourself with people who make you better, and great things can happen.

My last words of encouragement are to be positive, believe in yourself, invest in yourself and advocate for yourself. It is your journey, so you need to craft your own personal philosophy and process statement that defines what success means to you, not anyone else. Consider it a working document that can act as a north star for you on your journey.

With the right attitude, Bentley students can go out there and compete with anyone in the world. My Bentley student endorsement is, “world class skills, without a world class attitude”. Go add-value!