A Conversation with Warren Coleman

When did you start with Telarray? 

I came on board in 2004. I retired from the Navy on a Friday and showed up for work the next Monday. I don’t regret the quick turnaround, I was much more eager to learn than take a vacation.

How did you end up at Telarray?

Well, first of all, there were a couple of names and incarnations of the company before Telarray. We used to be called FSG, but before that I was part of a previous organization called ICT with Cliff and Andy and a few others. I got my foot in the door because I knew Rob Dingler, who invited me to come in and meet everyone. That day Cliff walked my wife Nancy and me through a combination of what today we would call the Observatory and the Investment Session, and I was hooked.

I had already started studying for the Chartered Financial Analyst (CFA) exams and knew I wanted to get involved in this business. When I saw Cliff’s Observatory presentation, it blew my mind. I had thought you had to research single stocks and do a lot of other, unnecessary stuff to set yourself up financially for the future, but I learned from Cliff that you don’t need stock picking, speculation, futures, hedge funds, private equity, or anything like that. All you have to do to be successful financially is follow a straightforward path informed by research that can get your portfolio where you need it to go.Sitting there in what is now Amy Alexander’s office was truly a moment of enlightenment for me, so I was delighted when they offered me a job at lunch down at Mortimer’s on Perkins. I had a lot to learn, but I picked it up quickly and grew with the firm. I’ll always be thankful for that opportunity and I hope I’ve paid it back with my performance and effort over the years.

What do you remember about the beginning?

First of all, it seems like yesterday. I say that, but then I consider that my children were 16, 14 and 6 at the time. Now they are about 17 years older–you do the math. When I think about it through that lens it seems like an awfully long time ago.

Between us and the accounting firm, of course, Cliff Paessler and Andy Shaul were always there. So were Amy Alexander, Brandy Wagner, Melinda Gunn, and Rob Dingler. Of our little group, I’m the first to retire. It’s been great to work with them all these years, as well as all the other people of Telarray, past and present.

We started out calculating rebalances in Excel, and now are blessed with a world-class trading and rebalancing system from Tamarac. I can’t say I miss those manual rebalance calculations; they sure were cumbersome.

How did the investment team evolve over the years?

One of my first actions was to hire Ron Butcher for the trading team. He was a great contributor to the firm for many years, and eventually went for his MBA and works in healthcare now. Next, I brought A.J. Kratz onto the team. He had been with the accounting firm and came over to work with me on the investment side after a stint with Melinda in reporting. As you know, he’s moved on to great things as an Advisor here at Telarray and is like a member of my family. Edward Hunt came on board to replace Ron and was a great addition; he was one of the smartest people I’ve ever worked with. Eventually he headed to an Ivy League MBA and now a role with Exxon Mobil. Gene Gard, Sahil Sury, and Jerome Lindsey make up the team now, and I expect they will help build on what we’ve made to take the investment process to the next level.

I learned from my time in the Navy there’s nothing more important than the team you build, and that’s probably the thing I’m most proud of at Telarray.

I just want to add that I’m a big proponent of continuing education. After becoming a CFA charterholder, I stressed the importance of learning, and Edward and A.J. both completed the program themselves while with the firm. Gene came to us as a CFA charterholder, and Sahil and Jerome are candidates in the program currently. This is big-time horsepower for a firm like ours. Our clients should feel they’re in good hands–you don’t find a team with credentials like this every day. A.J. and Gene also earned their Certified Financial Planner (CFP) marks, which, along with the CPA PFS designation, is very relevant to the work of the investment team as well as fundamental to what it means to be a good advisor.

Were there any particularly memorable days during your tenure?

I remember when Lehman Brothers failed, which was in the depths of the financial crisis of 2008-2009. We believe strongly in our investment process today, of course, but back then we believed in our long-term approach so much we thought there wasn’t much point in elaborating on it in tough times. It’s not as though we could change the market’s trajectory, right?

We realized quickly that approach wasn’t working and we could do better communicating. Clients were going bananas and desperately needed reassurance and guidance as it seemed that the financial system was falling apart. In retrospect, it was fine, but there was concern back then of real banking failure–that credit cards would stop working and money would stop coming out of ATMs. We spent days drafting messages and talking clients off the ledge. We were successful: Only five clients or so went to cash near the bottom. Staying invested was, as usual, the right choice. The model does work in time, but you have to stick with it even when the going gets tough.

What are you surprised that clients ask a lot over the years?

That’s easy: Why is this asset class underperforming and why is it in the portfolio? The asset class in question changes all the time. Bonds, small cap, value, emerging, real estate, international, and probably every other type of fund we have has been vigorously questioned at different times by different folks.
If you’re properly diversified, there’s always something you’re going to hate in your portfolio. We can show you at length why we diversify the way we do, but it’s hard to remember when recency bias starts to take hold in your mind. If you hold ten funds, for any period only one will be the best and all the others will look not as great. If you spend all your time wondering why the other nine are lagging, you won’t have time to focus on the important stuff.

Are there any thoughts you’d like to leave us with?

I think the most important thing is maintaining realistic expectations. Nobody has all the answers, nobody knows the future, and nobody can time the market. That’s why we build our portfolios like the ark, with a wide range of potential outcomes so that whatever storms life throws at us, our portfolio is well positioned. One of the simplest ways to consider the broad range of possible outcomes is a two-by-two matrix, including high/low economic growth and high/low inflation. I believe our portfolios are positioned to thrive in all four quadrants. We really believe our portfolios will get you where you need to be if you commit to the process.

Bigger picture, Telarray and all firms have to focus on good systems, good procedures, and good people. Of that triad, the most important are the good people. To make it on my team, you have to work hard, not give up, learn, grow, and commit yourself to improving each and every day you’re at Telarray. Those are the kinds of professionals we want and the kind of people we have throughout the organization. Technology and things under the hood are important, but we’re all in the people business at the end of the day, and here at Telarray we’re here to help people solve their problems.

I’m so proud of what we’ve accomplished, and I look forward to watching the firm grow for the next 17 years as a client just like you.

Unfortunately, Warren spent much of his time behind the camera as a sort of unofficial firm historian, but here are a few pictures of Warren and some others you might recognize over the years.

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