Speaker unverified: evaluation

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…ture capital companies. We're not as good as they are yet. We're going to get there because we're organized slightly differently.And we knew First Republic. We were watching it. I called Janet Yellen. I said, "That company's in trouble." And one or two others, if you want, we'll take a look. We could probably buy it and eliminate the problem. They waited a little bit too long. A melting ice cube.But you can imagine, the day we bought it, you never heard about it again. We hedged all their exposures in a couple of days. And we merged everything, we wrote everything down.But we did get some good stuff. We actually got some good people. The normal thing in an acquisition is, "They're terrible, get rid of them" or "They failed." But we also looked at what they did, how they dealt with clients. Let me be clear here. They did a great job with high-net-worth clients. Single point of contact, concierge services.So now if you go down Madison Avenue, you see things called JPMorgan Financial... "Center." That's your first JPMorgan branded consumer effort, right? Yes, because it's based on that. When you walk in there, we know your small business, we know your mortgage, we know your consumer banking. We can get you travel, we can do a whole bunch of different stuff.So very high-level services. I think we have 20 of them now, but I love it. And if it works, in 20 years we'll have 300. And so these things are opportunities, and I hope it works. You don't always know they're going to work for a fact, but so far, so good. All right, so we're effectively caught up to today. And if we're trying to... Now we've got the whole story, we've got a lot of context. Obviously, it didn't go into every detail. But if we're now trying to answer civilizer. Yes. If we're now trying to answer the question: how did you separate from the pack? Why did you become a completely different animal than your whole competitive set? What are the things in your mind that led to this success? What we do is the same thing that a community bank does — other than investment banking, global investment banking.Okay. So if you walk into a small community bank, they know your business account, they know your consumer account. They usually have a trust company; they used to call it trust. They manage your private affairs, they set up a trust for you, and they do stuff like that. And their CRM is up here. They don't need a Salesforce CRM because they know everyone in town.And they didn't do big-time global investment banking. But the strategy: those businesses fit together, they feed each other, and so does investment banking. A lot of our middle market clients use investment banking products. A lot of our consumer clients use some FX. So all of our businesses feed each other. There's nothing extraneous. We got rid of everything that didn't fit a strategy.And then you start building client businesses and client services: fortress balance sheet, fortress accounting, all those various things. And I've always talked about... So it's holding a portfolio of things that actually feed each other, that actually fit. services: fortress balance sheet, fortress accounting, all those various things. And I've always talked about... So it's holding a portfolio of things that actually feed each other, that actually fit. Whereas Citi had consumer finance that didn't fit, life insurance that didn't fit, and property that didn't fit. They eventually got rid of them all. Sandy just wanted to do more of them. He bought American General, which did truck leasing, for God's sake.And once you get involved in these things, it's hard for people to understand the risk in each one of these businesses. But all of ours fit. I don't like hobbies, I don't like things.And we've made plenty of mistakes because you have to try and test things, and then you're always investing for the future. That investment is always people, branches, and technology.And that's true whether it's investment banking people or consumer bank people, or opening consumer branches, or, I think Doug Pennos here and Troy Rohrbach who runs the global investment bank... But they've opened commercial banking branches all over Europe. And I think you're telling me — I mean, it's going great — and it's feeding all other parts of the company.So just sticking to your knitting, constantly investing, not overreacting to the market. Markets are like accordions. And then sometimes it's a... If you're strong when others aren't, you have a chance to buy things you want to buy.And then always look at the world from the point of view of the consumer. What do you want? How do you want it? How do you want to get it? Can we provide it to you in a way that makes sense for us, too? Not going for the last dollar and nothing like that, and building teams of people.Our people are curious and smart. They have heart, they have soul. They give a damn about the guards in the company and the receptionists. It's not just about the big-time bankers and people pounding their chest. We don't try to... try not to put up with that. And we have big-time bankers; they are exceptional. But the company serves the clients. And I think the clients know that. When you really dig in to start analyzing JPMorgan's financials, you see this one thing that jumps right out at you, which is the efficiency ratio. For every dollar that you make compared to your competitors, you get to keep $0.15 more of that dollar as profit. It's not hard to see how that compounds and how that allows reinvestment. And why is your efficiency ratio so much better than competitors? It is literally continuously investing and gaining business at the margin, and not stop-starting. And the thing about margins, too, is that we have that margin while investing a lot.It's much easier to have that margin, and 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.So we look right through the cycle, and we look at the actual economics that we do, not the accounting of what we do.And we've built it over time. down; your long-term margins will probably get worse.So we look right through the cycle, and we look at the actual economics that we do, not the accounting of what we do.And we've built it over time. We have great people and great products, and there's some secret sauce I'm not going to tell you about. We do Investor Day, and we tell everyone everything.And I'm sitting there watching my... I never do presentations. I'm watching them do the presentations. I'm saying, "Oh God, we're just giving away too many secrets here!" But, so there are secrets as to... Why... I saw Howard Schultz here before, and I'm not supposed to say that. Probably it's okay, but...…

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