Tuesday, February 17, 2004

Knitting & Banking?

It's not often that the subject of knitting comes up in the financial services industry, so when I read this Forbes' article at work today, I thought it worth noting! I've read about the excellent reputation (business and otherwise) of Golden West Financial but didn't know about the knitting angle. "Stick to Your Knitting," by Seth Lubove (free registration required).
Drop in on the Oakland, Calif. headquarters of Golden West Financial and you'll get a taste of a homespun, unassuming company under family control. Shortly into an interview at the thrift holding company, Marion Sandler, co-chief executive, pulls out a knitting needle and ball of yarn and picks up where she left off on a sweater for hubby, Herbert, the other co-chief executive. Marion, 73, admits to frequently knitting during meetings--"except when I'm running it," she helpfully notes. Herb, 72, jumps up, opens his closet and proudly shows off another cable-knit sweater Marion made for him. [...]

It's what they don't do that makes this company a standout among financial institutions. Golden West gathers deposits and lends the money out as mortgages on modestly priced, single-family homes. No junk bonds, no loans for shopping centers, golf courses or million-dollar mansions. The Sandlers installed ATMs only in the 1990s, and they still aren't sure the expense is worth it. They give away free toasters for new accounts.

"We're boring," Herb says, proudly. But not on Wall Street, where Golden West's numbers have drawn some attention. The Sandlers have produced compound annual earnings-per-share growth of 20% over the last 35 years, a record that appears to be unmatched by any other financial firm, with the possible exception of Warren Buffett's Berkshire Hathaway. [...]

After talking with the Sandlers, though, you come away with the impression that, for all their financial accomplishments, they're more interested in using the business as a means to the higher end of political and philanthropic pursuits. Die-hard liberal Democrats, the Sandlers support various do-gooder causes and activist outfits, as well as medical research.

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