From one piece The Jamie Dimon Interview: How JP Morgan Became an $800 Billion Bank 19 beliefs, in the piece's order there
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Their words
If you have a a sport team with a bunch of real jerks on it, are they going to be a great team? Almost never.
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Their words
we can cut billions of dollars of marketing out tomorrow. We can stop opening branches and save a billion dollars next year. We could do a lot of things. Your margins will go up. Your growth will go down. Your long-term margins will probably get worse.
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Their words
A lot of our middle market clients use investment banking products. A lot of our consumer clients use some effects. So, all of our businesses feed each other. There's no extraneous. We got rid of everything that didn't fit a strategy.
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Their words
And the interest rate exposure was hidden by accounting. It was called held to maturity, where you don't have to mark even treasuries to market.
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Their words
But they they both had something something unique that we didn't know at the time. I'm going to call them concentrated deposits. Not uninsured cuz people are misstating that, concentrated.
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Their words
And then the other thing and the biggest risk to me is cyber. I mean, I I think this cyber stuff is, you know, we we're very good at it.
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Their words
if we if if today PEs were 15 as opposed to 23, I say that's a lot less risk. A lot less to fall and you have some upside. I would say at 23, there's not a lot of upside and there's a long way to fall.
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korrents.com
In financial services it is very often the new products that blow up, because they have not yet been through a cycle.Their words
So, if you look at the financial services, very often it's the new products that blow up. It takes a while. They haven't been through a cycle.
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Their words
So, you while we kind of saved the system a lot, we bailed a lot of people out, they made us pay 5 billion dollars on the more the bad mortgages that Bear Stearns had done. And that's what made me make the statement I wouldn't do it again.
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Their words
1929, and man, history does rhyme. Too much leverage, too much risk. Everyone thinks it's going to be great. No one thinks it's going to go down a lot.
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Their words
So you if you look at the leverage in some of these securitization books and mortgage books if you have 30 times leverage and you're getting 20% of the profits you'll go to 40 times leverage. It's just going to it's literally will add you know 25% to your bonus.
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korrents.com
Nobody should be paid on a particular deal, because a person paid on a particular thing will do the wrong thing.Their words
There are no winks there are no nods there are no side deals there's almost no one paid on a particular thing because if you're paid on a particular thing you can do the wrong thing and meanwhile not helping the company you know manage its risk or something like that.
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Their words
You know, in the banking business, the character the clients you have will reflect in your bank. So, the first thing is who you're doing business with, how you're doing business
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korrents.com
Bad loans are bad revenue that will eventually kill you, even though for a while they look like profit.Their words
And then, revenues, you know, if I make bad loans, they are bad revenues. They will kill you, but for a while, they look pretty good.
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Their words
the fortress balance sheet is that you run a company serving clients well, you have good margins, good liquidity, good capital. I'm as conservative in accounting as you can find. I don't up-front profits when I can spread them over time.
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Their words
if you look at the history of banks from up until 2007, a lot of banks were earning 30% equity. Most of them went bankrupt. We never did that much. Okay, but in '08 and '09, we were fine, and they weren't.
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korrents.com
In financial services what kills you is leverage and aggressive accounting, not bad luck.Their words
And and the thing about financial services, leverage kills you. Aggressive accounting can kill you, which a lot of companies do do.
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korrents.com
A bank should be managed against the fat tails it can imagine, not against the stress test its regulator hands it.Their words
And so, I always look what I call the fat tails and manage that we can handle all the all the fat tails. And not the stress test the Fed gives us, but all the fat tails.
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Their words
I've always been very risk-conscious. And risk-conscious does not mean getting rid of risk. It means properly pricing it and understanding the potential outcomes.