Mark Grant: A grim financial guru finds fame in Fort Lauderdale
The financial crisis pushing Europe to the brink could put the United States into recession, again. Mark Grant saw it coming before most did. He’s having some fun with that.
06/24/2012 5:00 AM
06/29/2012 5:49 PM
For a man confident of a coming economic catastrophe, Mark J. Grant certainly seems to be enjoying himself.
Smoking a morning cigar poolside at his waterfront Fort Lauderdale home, a top executive at a Wall Street bond operation recalls how he predicted the Greek debt crisis two years ago. That foresight is getting noticed. The Wall Street Journal this year called him “The Wizard” in a column devoted to his forecasts, borrowing a nickname Grant uses for himself in the investment newsletters he sends to clients. A wizard also graces the burgee of the 83-foot yacht docked behind his home. Name: Wishes Granted.
“Besides making money, which is good, I’m also having a wonderful time,’’ said Grant, 61. “That’s as good as it gets in this life.”
Life has certainly been good to Grant, who has owned five yachts named “Wishes Granted.” But now he’s enjoying a new windfall: fame. Thanks to an early hunch that Europe might swamp the U.S. recovery, Grant is quickly becoming perhaps the most prominent financial commentator in South Florida.
“Soon, everybody could know Mr. Grant,’’ New York Times columnist Andrew Ross Sorkin wrote last week, dubbing Grant the “Dr. Doom” of the Greek crisis.
Grant’s ultra-bearish instincts came out Friday amid Wall Street euphoria over news that European leaders were readying a new bailout for beleagured banks in Italy and Spain. Grant wasn’t buying it, and urged his clients not to buy into it. “I advise against investing on hopes, prayers and grand schemes that have too often gone astray in Europe,’’ he wrote in an email note 21 minutes after the markets began surging Friday morning. “I think the rally fades as people look past the headlines.”
The coming weeks will show whether Grant’s latest bet against a brighter day will prove correct. He still sees his early predictions of a Greece meltdown largely coming true, the first step in what he sees as a much broader crisis. With Spain following Greece into insolvency and Italy on the brink, Grant predicts a broad European banking meltdown. That will push the United States into a recession as early as this fall. With the downturn, Grant also sees South Florida’s real estate rebound ending and prices dropping again.
“I thought it was going to get bad, and it got bad,’’ Grant said in an interview. “It’s a big mess.”
Grant was on a yacht in the Bahamas when the Lehman Brothers investment bank collapsed in 2008, sparking a financial crisis that put the United States at risk of a depression. Grant turned the yacht around and raced back to Fort Lauderdale.
To prevent a national bank run, Washington began buying preferred stock in insolvent financial institutions. Grant saw an opportunity in the rescue: buy the banks’ own debt, since bondholders would be paid back ahead of stock holders in the event of a bankruptcy.
“Many of you are staring at the table and haven’t yet noticed the present that is sitting there,” he wrote in a Nov. 12, 2008 note to clients. “Smell the roses, wake up to the glorious dawning of a new day...’’
The downturn was apparently good for Grant. In 2009, Grant paid $3.2 million for his 6,000-square-foot house, including a three-car garage that now houses a Bentley, Ferrari and a Rolls Royce. In 2009, he also bought his latest Wishes Granted. In 2010, he set sail for a three-month working vacation aboard the yacht, joined by his private captain, chef and stewardess.
“What I do for a living is serious,” he said in an interview, “but you also get a sense of enjoying life.” As he wrote in his 2011 book, Out of the Box and onto Wall Street: “I’ve learned that a solid work ethic is mandatory for success, but a solid play ethic is also a necessary part of winning.”
To his role of grim guru, Grant brings a particularly sunny persona. For his regular CNBC appearances, Grant usually finds himself the only male on the panel without a tie. His postings on investment message boards feature a profile picture of a man in a fake white beard and a sorcerer’s cap. Grand Marnier makes occasional cameos in the investment newsletter the lifelong bachelor sends out daily to clients and journalists, as he recounts various cruises and sojourns.
“I don’t think I’ve met anybody who enjoys what he does half as much,’’ Randall Forsyth, editor-in-chief of barrons.com, wrote in an e-mail about Grant.
Grant keeps an office off Las Olas Boulevard. but he often works out of his house. He typically rises at 3:30 a.m. to check the overnight news from overseas. Grant keeps six pairs of glasses on the antique French desk in his home office, where he sits inches away from a jumbo monitor with four screens blinking a matrix of currency spreads, financial headlines, bond rates and other market arcana.
He grew up in Kansas City, Missouri, the son of an advertising-executive father and a mother who worked in public relations but was also active in local politics and charities. His career began on the trading floor of a local bank, but he soon was working for some of the top investment banks on Wall Street.
He moved to South Florida about 20 years ago after taking his powerboat down the Mississippi River for an extended cruise in the Gulf and East Coast. He’s now the director of structured finance and the syndicate department for Southwest Securities, a Texas-based securities brokerage and investment bank with about $24 billion in assets under management.
Both Southwest positions put him in charge of selling corporate debt to large investors in complex arrangements, but he does not manage investments for clients. As a broker, Grant makes most of his money off commissions from clients buying or selling stocks and bonds. He spends most of his day on the phone advising those clients: insurance companies, money-management firms, pension funds and other large, institutional investors.
Those clients also get his daily economic commentaries — analysis of the day’s financial landscape, with Grant as the courtly narrator. At times, his two Aussie rescue dogs, Princess and Mr. Trooper, wander into the narrative as “The Sages.” He’ll quote Aristotle, Marx and Tolkien. In 2010, he cast Europe’s debt woes as a dysfunctional family dinner, with “Cousin Tony” who is about “to lose his Greek diner... and wants to eat for free.”
The ongoing economic crisis may be Grant’s moment. He said his television appearances began during the downturn, and they have been increasing with Wall Street’s European worries. He describes his main value to clients as warning them of pitfalls rather than spotting can’t-lose investments. He often refers to “Grant’s 13 Rules of Investing.” The first ten are “Preserve Capital” — that is, don’t lose money.
“People speculate far too heavily,” he said. “I’ve learned from 38 years on Wall Street, if you can stay away from the sinkhole, you’re ahead of the game.’’
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