Does Experience Matter in Investing — and Politics?

On the day following President Trump’s victory, Obama friend John Rogers found himself contemplating the meaning of experience — and celebrating 30 years at the helm of his Ariel Fund.


The day was meant to be a celebration. John Rogers Jr., CEO of Ariel Investments and lead portfolio manager of the $2 billion Ariel Fund since 1986, and Ariel president Mellody Hobson had invited to Chicago the handful of other stock pickers who had also been in their seats for 30 years. Rogers and his guests, including GAMCO’s Mario Gabelli, planned to discuss the benefits of working with a money manager with experience, who has lived through and learned lessons from the cataclysms of the past three decades, from the historic market drop in 1987 to the days when the stock exchanges were closed after September 11, 2001, to the 2008–’09 financial crisis.

But it was November 9, the day after Americans elected Donald Trump — a man who had never held elected office — as president. Emotions were raw all over the city. Everybody wanted to talk about how Trump had managed to win: Uber drivers and airport workers as well as many of the financial executives who were at Ariel’s offices to listen to Rogers and the others speak, in a now-ironic twist, about why time in the trenches matters.

Rogers was particularly saddened. He has been friends with the Obamas for decades and was intimately involved with the administration. Rogers met Craig Robinson, Michelle Obama’s brother, when Robinson was a younger basketball teammate at Princeton: “We always joked that Barack was just Craig Robinson’s little sister’s boyfriend.”

Even as another cataclysm seemed to be hitting the markets — Dow Jones futures had been down as much as 700 points the night before — Rogers wanted to talk about the real-life implications of Trump’s win during a prepanel interview. Sitting in the Mid-America Club’s library in the Aon Center (the third-tallest building in Chicago — the Trump International Hotel & Tower around the corner being second), Rogers described his heartbreak over the election. “The president and Michelle and those kids are so dignified and thoughtful. Such great role models,” said Rogers, who speaks so softly he can be hard to hear, even across a small table. “But in talking to people at the firm, we’ve been asking how do you tell your child not to bully someone now? They can say, ‘Well, the president does it, so I can do it!’”

Rogers tried his hand at equanimity about Trump. He acknowledged that perhaps some voters had been angered by government overreach. Though emphasizing it was a silly example, he pointed to then-mayor Michael Bloomberg’s initiative in New York to regulate the size of soft drinks. The previous night Rogers had mentioned to Arne Duncan, Obama’s secretary of education until 2015 and Rogers’s childhood friend, that parents just want to get their kids to school safely: “Most people aren’t that concerned about the size of their soda pop.” Regulations like that can add up and be too much for many people, Rogers reasoned.

When asked about his next steps, Rogers mused about the Clinton gala on election night, which he noted was “not much of a party.” But there he had told his daughter Victoria that “we were so lucky to get involved. This was an experience that was unimaginable.” The Obamas and their circle are part of Rogers’s world. He grew up in Hyde Park, a diverse community centered around the University of Chicago, where the Robinsons’ home is a block away from the one that Rogers grew up in. He has known Duncan since he was ten, as well as Obama senior adviser Valerie Jarrett, whose father was an original investor in Ariel. But, Rogers reflected, “I’m not trying to jump on the next train and duplicate the kind of feeling we had being part of this magical team.”

It was time for Rogers to end our interview; in the next few hours, he would be answering questions from reporters and clients attending the event. A flurry of initial queries centered on what a Trump presidency would mean for the markets, the regulatory environment, and investors. Despite his personal connections to Obama and the Democratic party, experience seemed to give Rogers the ability to put aside his emotions. When asked what had gone through his mind as markets plunged the night before, Rogers responded that he and his deputies had long been prepared for a significant downturn if Trump were elected. “Our thinking was that we would be coming in today having a chance to buy bargains, and to buy wonderful companies that would be on sale because of the temporary downturn in the marketplace. We were ready to go.”