Learning from Mistakes: Alan Quasha Explains the Trend

Our society is baffled by the two-fold question: How can the financial community, made up of clever, astute individuals have led us to our present economic crisis? And second; what important lessons can we learn from this current financial situation?

Alan Quasha believes one of the most important lessons we can learn is that mistakes are inevitable, and the most important thing is to learn from them and move on with our new-found knowledge. In order to properly take advantage of the education our mistakes have to offer, we must show integrity and have a desire to grow. To learn from mistakes it is necessary to admit them early. To avoid large mistakes it must be acknowledged at the outset that mistakes are a real possibility. This is why we are seeing a trend today for firm managers to become more and more expert risk managers. And the investment firms with the best risk management controls stand apart and are more successful.

Alan Quasha Discusses the Art of Mistakes

In an article by Alan Quasha, CEO of Quadrant Management, in Forbes.com, he explains the importance of making mistakes. When smart and talented people refuse to admit that a mistake either has or even can happen, that’s when mistakes become a problem. A humble, insightful person recognizes that one must plan for and measure accurately downside risk and consider all information at hand, not just the information that agrees with your initial assessment of a situation.

We have learned from the past that those that succeed are not the ones that always do the ‘safe’ thing; those that expect mistakes to happen but refuse to be afraid are ultimately successful. These people are able to learn from their mistakes, and forge ahead, undaunted, knowing there is another mistake right around the corner, ready to meet the challenge and ultimately succeed.

Unfortunately our society does not foster this attitude, and children are taught from a young age to avoid at all costs making mistakes. We react with anger and fear to our mistakes. This causes unhealthy, unproductive reactions to mistakes such as denying them, covering them up, or avoiding risks so as to prevent mistakes.

Alan Quasha: Mistakes are Good if You Learn From Them

. The first that comes to mind is, of course, how did so many intelligent, supposedly well-informed financial experts become active partners in the crisis? The second is, and more importantly, “Is there something we can learn from this mess?”

Alan Quasha believes mistakes are part of life, and the wise person is the one that learns from his mistakes. And even if it is counter intuitive, mistakes are a good thing. The inspiring baseball coach of UCLA, John Wooden, used to say, “The team that makes the most mistakes wins.”

Alan Quasha: US is over-leveraged

Alan Quasha, CEO of Quadrant Asset Management, says that the United States is grossly over leveraged. The US has around $54 trillion of debt – this is over 3.5 times the size of our entire economy. Before  2008, Americans’ net worth was calculated at about $56 trillion, but this has dropped by $20 trillion in the half-year opening 2009. This is the largest decrease in wealth over the shortest time that the markets have ever witnessed.

In order to exit this crisis and be able to try and regain our losses we will need to make some drastic changes, says Quasha.

Quasha Calls for Less Spending–More Investing

In an article that appeared in “The Daily Beast”, Alan Quasha, CEO of Quadrant Management, rhetorically asked whether we can “stimulate the economy short and long term in a way that ends the financial meltdown but does not mortgage the future of our children and grandchildren?”

His answer is an unequivocal “yes”, but it can only be accomplished through more investment and a reduction in consumption. This approach suggests that investments will stimulate job creation, but consumption will “sap our already depleted wealth.”

Since Quasha believes that a “new plan needs a new vocablulary”, Alan Quasha would like to refrain from referring to a “bailout” of banks, but rather a “reengineering” of America.

He would like to see an end to propping up values and the bad habit of “throwing good money after bad businesses.” Quasha believes we should begin to think outside “the Beltway box.”

Alan Quasha On Saving Our Economy

Discussing the current financial crisis, Alan Quasha, in an article which appeared in “The Daily Beast” offers several concrete suggestions for an economic recovery which will not “mortgage our grandchildren’s future.”
Opening his article with a quote from Winston Churchill, “Americans can be trusted to do the right thing, but only after they had exhausted all the other alternatives”, Quasha continues with a description of the seriousness of our deepening recession.
“America is frighteningly overleveraged, saddled with $54 trillion of debt, or 360 percent of our $15 trillion economy. Americans’ pre-2008 $56 trillion of net worth has dropped $20 trillion in the last six months alone—the greatest loss of wealth in the shortest time in history.”
Quasha also suggests that recent actions taken by the new U.S. administration seem to be heading down the wrong course, as suggested by the financial markets.

Eric Beder of Carret Advising on YouTube Video

Eric Beder, co-chairman with Alan Quasha of Brean Murray, Carret & Co, was interviewed on the April 27th edition of Closing Bell with Howard Davidowitz. Maria Bartiromo is seeking advice for her viewers about how investors can make sound investment decisions during turbulent economic times.  Lack of consumer confidence is seen as a temporary but significant concern.

Listen to the video below:

Alan Quasha’s Early Days at Harvard and Beyond

When Alan Quasha, now CEO of Quadrant Management, was a student at Harvard, he played on both the tennis and squash teams. Mr. Quasha was on three national championship teams while at Harvard, so the level of competition was quite high, and most likely helped to keep  him fit for years to come.

Alan went to Harvard Law and Business School simultaneously through a special joint program. When he graduated he started practicing law. Despite the fact that Mr. Quasha enjoyed working at his law firm, due to a proactive personality he decided to start his own firm.

At the age of 29, 30 years ago, Alan Quasha actually did one of the very first leveraged buyouts.

“I figured out a way to take a company private with essentially no capital. Then came the hard part: After the deal we had to make the company work. It was a very interesting experience, and I learned that there are a whole lot of things you can do to change even traditional businesses to make them more efficient and competitive, against incredible adversity, and turn them into leading companies.”

Restructuring Alan Quasha Style

In a discussion of how Alan Quasha of Quadrant Management has had such consistent success in the restructuring business for many years, Mr. Quasha described his technique.

Explaining that Quadrant Management are principals, as opposed to being merely consultants or advisors, Mr. Quasha  points out that,

“We restructure companies with ownership in mind because the process often requires making fundamental changes to the business model and laying out a strategy for where the business can go.”

When Quadrant began restructuring companies over 30 years ago there was little incentive to doing it as an agent, since there was no money restructuring a company that way. It pretty much had to be done by the management company as a principal, and that is how they still do it today.

Restructuring is more common during times of economic adversity, so Quadrant Management has been quite active in recent months.  One of the leading entertainment distribution companies, Genius Products, is, according to Alan Quasha’s terminology,  “a leader in ‘non-Blockbuster’ titles”, meaning that it deals with most entertainment mediums. Since Genius is already strong in the movie and DVD business, Quadrant is helping to involve them more in the music and game business.

Genco Interactive Releasing Amazing Hip-Hop Video Game

Genco Interactive, a subsidiary of Genco Media, will be releasing “Scratch:The Ultimate DJ”, in partnership with Genius Products, LLC. This state-of-the-art video game, developed by 7 Studios, combines amazing free-form DJ tricks with fabulous rhythm game-play. Featuring music from the superstars of the Hip-Hop world, “Scratch” is set in unique urban locales and is played like other popular rhythm games. Alan Quasha, President of Quadrant Management as well as the Chariman of Genco Media explains that “Genco is focused on providing content creators the means to fund the development of a range of entertainment related products, including video games. Scratch presents a great opportunity to work with some of the most talented people in the Hip Hop music industry and bring an exciting new game to market.”