When life hands us lemons, we’re told to make lemonade. That’s a relatively safe deal, since lemonade is no great prize. Imagine what could happen if, instead, we cut open the lemons, removed the seeds and planted them. We might just grow a lemon orchard if we’re willing to risk losing the lemonade to gain a greater reward.
That’s exactly what Jon Lam and his partner, Stuart Sneddon, did to build Newbury Capital Management from the ashes of Tower Asset Management. Mixed metaphor notwithstanding, the rebirth took guts, determination and decisive action in the midst of chaos. Seven years later, the thriving, employee-owned company manages world-class portfolios.
The Dividends of Childhood
Lam’s first experience in the financial arena dates back to his childhood when his grandmother introduced him to the wonders of dividends. Instead of the usual toys and clothing, she gifted him a few dividend-paying stocks.
At the time, all Lam knew was, “Every three months, I received a check for $20—without doing anything [to earn it]. That’s a lot of baseball cards. My dad would let me use a little, and we would put half or three-quarters in my savings. How cool is that when you buy something and get money in the mail every three months?”
It’s not Rocket Science
Some believe the intricacies of investing might as well be rocket science. While that’s not true, both fields do require a solid foundation in math and the same set of problem-solving skills. In fact, Lam might have been a rocket scientist, since he earned an aerospace engineering degree at Boston University. By the time he realized his heart wasn’t in it, it was too late to switch his major.
The Siren Call of The Street
Influenced by his grandmother, Lam followed his passion to Wall Street fresh out of college. He says, “I started with a small brokerage, where I was a little fish in a little pond. I didn’t care for their business practices, so I moved on.”
Disillusioned with his first employer, Lam moved back to California in 1989. He joined Charles Schwab and had a successful run there for almost a decade. “It was a great experience, and I learned a ton about business while I was there. I had some great mentors and also gained some lifelong friends.”
The Tower Years—From the Worst Moments to the Best of Times
After his years at Schwab, Lam joined Tower Asset Management in Pasadena, California in 1997. In 2002, just as the markets went through the initial-public-offering collapse, one of the company’s founders left the company and took two of its top producers. Tower lost two-thirds of its clients and asset base. “I thought I would be gone, but instead, they promoted me to president,” Lam recalls.
Initially, Lam thought he had been promoted to president to unwind the company. “Instead, we were able to change the culture of the firm and grow it until it was sold in 2009,” he says. “The turnaround was really due to the great team we had and their willingness to make big changes to survive and thrive.”
In retrospect, 2002 was a dress rehearsal for Lam’s next defining moment. In 2009, Tower was sold to a Texas bank, which bought the company for its client list and promptly closed the doors. “One day you show up at work, and there’s little more than an empty building,” Lam says.
Lam was determined that would not be the final chapter, especially after gaining experience from turning around the company in 2002. Along with most of the former partners, Lam immediately hit the phones and contacted his entire client list. (In California, non compete agreements, where they exist, are unenforceable.)
After Lam and the former Tower partners contacted their clients and explained what happened, they invited the clients to come to the new company. Working night and day, they managed to bring their clients with them and build a new company from the remnants of Tower. Newbury Capital Management LLC was born with Lam assuming the CEO position and Sneddon assuming the Chief Investment Officer position.
Seven year later, with nearly the entire client list intact and new ones added, Lam and his team have grown Newbury from the lemon seed left behind by Tower.
Lessons for Success
Lam has learned much from his experiences, and he suggests the following for those just starting out and as a reminder for seasoned individuals who may have strayed from the basics:
- Change: “The only constant is change. You have to embrace change, or at least expect it, and not shy away from it. It’s going to happen. The world is constantly changing. Disruptions cause progress. Technology plays an increasing role. Learn how to make it work for you.”
- Skills and attitudes: “You can teach skill sets—someone can learn systems, but it’s hard to teach someone the right attitude.”
- Mentors and contacts: “Learn from people who are in the business, not from headlines. Headlines are printed to sell paper. The whole story is from the people you meet in the industry you want to enter.”
- Internships: Lam encourages college students to look for internships. “It’s great for both sides. The student learns in a business environment, and it’s a good way for employer to screen potential hires.”
- Entrepreneurial mindset: “Try to view the business decisions made in your company from an entrepreneurial view or the owner’s position. As long as the organization is open to an entrepreneurial spirit, don’t just point out problems; have a solution or two that you can recommend. [Say,] “Here’s a problem, here’s the solution, and here are the pros and cons. If your ideas are solid and you show good decision making skills, you’ll be viewed as a potential leader.”
- Communication skills: Finally, Lam suggests sharpening communication skills—both written and verbal. “If you can articulate an idea and get people excited, then you’ll be successful. You’ll be way ahead of the game because there is opportunity for those with great skills.” For and in-depth explanation of communicating effectively, Lam suggests reading Made to Stick by Chip and Dan Heath.
While change is inevitable, the above list demonstrates that good business skills never retreat. Lam should know. These skills have served him well, and along with his determination, they have carried him through times when others would have thrown in the towel.