Capital Group was founded by Jonathan Bell in Los Angeles, California in 1931. In the beginning, it was a small company which gradually transformed into an international investment management organization. The current Chairman, Chief Executive Officer, and Portfolio Manager of the Capital Group is Tim Armour.
Capital Research and Management Company is a part of Capital Group, and Tim Armour is also its Chairman and Principal Executive Officer. He is also the Chairman of Capital Group’s management committee. He worked at Capital Group throughout his career which spans over a period of thirty years. He acquired a bachelor’s degree in economics from Middlebury College. He joined Capital Group as a participant of The Associates Program in 1983. Later, he was promoted to an equity investment analyst covering global communications and American services companies.
Tim Armour became the Chairman of Capital Group on July 28, 2015. He and other members of the top management are responsible for implementing & setting business strategies, communication, and operations. Jim Rothenberg was the former Chairman of Capital Group. After his demise, Tim Armour was considered as the most suitable candidate. Armour is well-known for making correct investment decisions. Sixteen years ago, he had to choose either Netflix or Blockbuster. Netflix was developing at that time while Blockbuster Inc. was at its peak. Surprisingly, Armour’s choice was Netflix, and today the company’s worth is forty-five billion dollars while Blockbuster went bankrupt.
According to Tim Armour, making the right decision does not require extraordinary vision. At that time, video renting stores were considered a dying business; therefore, investors assumed that Netflix would not be successful. The appropriate way to analyze the success of a company in future is to study its index fund. Netflix’s index fund was telling that it will be a huge success. Long-term active managers should not go after the market average for a longer duration but should see the value of places for their investors. According to him, managers need to understand America’s recent economic recovery.
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The majority of the companies do not have huge profit margins, and they can’t increase revenues; only some companies can do it. He presented the example of increasing interest rates and unstable oil prices. According to him, it will impact many companies and industries because of many opportunities and risks for investors. To find prospects, managers need to apply in-depth analysis after thorough research.
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