John Rutledge

Biography

Dr. Rutledge is the Founding Managing Director and Chairman of Rutledge Capital. He has served as a special advisor to Kelso & Company, a private investment firm, and serves on the boards of directors of the Lazard Fund, the AmerindoTechnology Fund, and a number of portfolio companies. He was on the economics faculty at Tulane University and Claremont McKenna College. He founded Claremont Economics Institute prior to Rutledge Capital. He worked with the US Treasury Department under William E. Simon and was one of the principal architects of President Reagan's economic plan in 1981. Hewrites a regular column for Forbes magazine,and has published several books. John is a frequent speaker and lectures on topics in economics, finance and capital management.

Titles

Thermoeconomics
The principal of arbitrage lies at the heart of economic analysis. Arbitrage, in turn, stands on the strong shoulders of thermodynamics, the most robust area in all of physics. Thermodynamics says simply that temperature differentials cannot persist over time between objects in physical communication. The end result is thermal equilibrium--the state in which there is no further tendency for temperature to change.

Almost all activity in life reflects the physical manifestations of thermodynamic processes. It is why the chemical reactions occur in our cells, sunlight leads to photosynthesis, and why volcanoes erupt.. And it is why weather systems form. Weather systems are the best and simplest metaphor for economic change. We all know what happens when high and low pressure systems try to occupy the same space--thunder, lightning, tornadoes, and hurricanes.

The Impact of Telecom Deregulation on Growth and Employment
The US Telecom industry stands ready to commit $90 billion in capital to deploy high speed communications systems for small businesses and the home. But invasive FCC regulations, forced access rules, and price controls, have frozen capital spending plans like a fly in amber. Dr. Rutledge explains the impact of deregulation on investment, growth, and jobs, and discusses the outlook for deregulation and growth.

Technology Drives the Economy
Technology has become the weapon of choice in the battle for global competitiveness and the U.S. is losing the battle. Using his Asset Market Shift framework, Dr. Rutledge discusses the impact of technology on the economy and the necessary changes for the U.S. to be a leader again. The US used to be the world in technology. The US also led the world in productivity growth. This is not a coincidence. Dr. Rutledge discusses the factors behind the technology boom of the past 20 years and its effects on employment, inflation, interest rates, and asset prices. He highlights the role the Fed and regulators played in the tech boom and the bust of the last three years and discusses new developments in the telecom, technology, and media sectors.

Weather map investing
Weather systems are the best and simplest metaphor for economic change. We all know what happens when high and low pressure systems try to occupy the same space--thunder, lightning, tornadoes, and hurricanes.

Dr. Rutledge thinks of global investing as an exercise in meteorology, identifying the thermodynamic events--usually changes in tax rates, government spending, regulatory policies, or monetary policy--that lead to localized temperature or pressure differentials which set up the arbitrage situations we use to make money. The weather map metaphor reminds the investor of two important facts. First, extraordinary investments, like weather systems, are transitory phenomena. Second, investing, like meteorology and thermodynamics, is not an exact science, but it can help you to identify the storm systems that are going to make things happen.

The way to make money investing is to identify a storm system that is powerful enough and likely to be long-lasting enough to serve as an energy source for revaluing a portfolio. Then you move capital into position to take advantage of the implied prices changes.

The Reagan Legacy
In a town where no one does what they say they are going to do, Ronald Reagan shocked people by telling them just what he was going to do, and then doing it. Dr. Rutledge had the honor of helping the Reagan transition team put together their economic plan. When Ronald Reagan was elected in November, 1980 the American people were deeply discouraged. Inflation was 15%, the top federal income tax rate was 70%, the top tax rate on investment income was 91%, interest rates were 21%, the Dow was below 1000, the Soviet Union was a menace, the Berlin Wall divided families, and the Khomeini government in Iran was holding Americans hostage in Tehran. Today, inflation is below 2%, the top income tax rate has been cut in half, interest rates are below 2%, the stock market is above 10,400, the Berlin Wall has been torn down and our children learn about the Soviet Union in history class. The hostages were released on the very day Reagan was sworn in as President. These changes are the legacy of the Reagan Presidency. They did not happen by accident. Dr. Rutledge explains the economics behind Reagan's plan and discusses why Reagan's presidency made such profound changes to America and the world.

Economic and Financial Outlook
The key to predicting the direction of the economy, interest rates, and stock prices is understanding the impact of policy on asset prices. Dr. Rutledge shows you how to become your own economic forecaster by understanding the massive restructuring of the US economy in the 1980s and 1990s, the tech boom and bust, and the impact of terrorism, the Iraq War, global deflation, and the dividend tax cut on growth, inflation, interest rates, stock prices, and the dollar. The Heat-Seeking Investor
Dr. Rutledge focuses on how the investment markets work and what people should do to build wealth in today's erratic markets based on the simple, timeless principles of thermodynamics. Dr. Rutledge describes the factors that determine a company's intrinsic value and tells the audience how to be successful value investors. Some of the topics he covers are: the 19-year Bull Market of falling interest rates and rising stock prices; the role of regulation and the Fed in the dotcom boom and bust; the impact of 9/11; governance scandals; the Iraq War; and global deflation. Dr. Rutledge explains the importance of controlling Intrinsic Risk rather than volatility. He will outline which sectors, industries, and companies remain undervalued and why, and the role of real estate, private equity, and hedge funds in allocating assets.

Building, Managing, and Owning a Private Company
Dr. Rutledge knows what it feels like to own and run a business. Over the past 20 years, as the founder of two private equity funds, he has been owner, investor, chairman, CEO, or board member of more than three dozen companies. This experience served as the crucible of his Forbes Business Strategy column for more than a decade. The result is a set of principles to help the owner or manager of a private company build, manage, own, and harvest value for their families. Dr. Rutledge shares these principles and his personal experiences to help business owners and managers think through where to take their companies in today's economy.

Strategies to Protect and Grow Shareholder Value
For more than a decade, Dr. Rutledge wrote his Business Strategy column in Forbes to teach managers how to preserve and grow the value of their businesses using lessons he learned while advising hundreds of public and private companies over thirty years. Topics include creating and managing brand equity, pricing for growth, managing foreign operations, controlling cash flow, incentive compensation, stock options, working with lenders, raising capital, how to conduct a value audit, governance, the role of the CEO, and how to be a good director. Dividend Tax Cut
The dividend tax cut is the biggest event to hit US asset markets since the Reagan Plan. We can expect still further cuts over the next five years. As a White House advisor on the impact of the dividend tax cut on the economy and stock market, Dr. Rutledge helps an audience understand how tax cuts will impact their businesses and investments. The tax cuts will pressure companies to pay out cash, increase dividends, and pay down debt, pushing stock prices up by 20-30% and creating $2-3 trillion in net worth by forcing a gap between after-tax returns on stocks and real assets. Dr. Rutledge addresses the budget deficit and sunset issues. He also explains which sectors, industries, and companies offer the greatest gains and the impact of the tax cuts on bonds, real estate, and alternative investments.

Rebuilding Iraq As an advisor to the White House task force on rebuilding Iraq as well as a longtime advisor to a number of institutions in the Gulf, Dr. Rutledge knows the US can't afford to get this one wrong. Dr. Rutledge shares his inside view of the scope of the work underway in Iraq, including: property rights; currency and banking systems; security markets; real estate; and oil. Dr. Rutledge discusses what we can do to make the plan more likely to succeed and the impact of the new Iraq on OPEC, oil markets, and the security of the region.

Global Perspectives on Business and Investing
Dr. Rutledge draws on the lessons and observations of 15 million miles of travel over 30 years to help the audience understand doing business and making investments in a global economy. He discusses economic growth, inflation/deflation, interest rates, stock prices and currencies around the world, and managing foreign operations. He includes the role of emerging markets in global investing and the appropriate asset allocation for a global investor.

Timeless Principles of Leadership
In thirty years of advising business and investors around the world, Dr. Rutledge has seen true leaders succeed while others fail. Dr. Rutledge uses the lessons he has learned from these experiences to help people take control of their businesses, their investments and their lives.

Failing Your Way to Success
Failing is a necessary part of success. It's failing small first, and winning big later, that makes a real winner. In this lecture, Dr. Rutledge draws on his own experience, from short-order cook, to truck driver, to advisor/investor, illustrated with recent advances in cognitive science, to help people understand why taking risks is necessary for growth, and how to teach young people which risks are worth taking.