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“For this financial theorist turned entrepreneur, jumping around from major Wall Street firm-to-firm for cash or atrophying behind a fancy-looking desk were not viable options.”

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Jonathan Citrin founded CitrinGroup in 2003 and serves as its Chief Executive Officer. Mr. Citrin is Chairman of CitrinGroup’s Investment Advisory Board, and is an Adjunct Faculty of Finance at Wayne State University’s School of Business Administration, where his classes include Security Analysis, Investment Policies, Corporate Finance, and International Finance.

CitrinGroup is an investment advisory firm specializing in portfolio management; their ultimate goal is simple: Manage predictability through process. CitrinGroup provides portfolio management to high-net-worth individuals, institutions, businesses, trusts and non-profits worldwide. In its role as portfolio manager, CitrinGroup also serves as a sub-advisor — investing assets for other industry firms throughout the United States.

MO: Can you expand on how you’ve managed to differentiate yourself by managing portfolios through process not product?

Jonathan: The investment industry is full of noise – investment “gurus” claiming to be omniscient, and in some cases omnipotent. This is not only untrue, but defines the fundamental problem facing the industry and portfolios today. In order to take our portfolios outside the polluted groupthink mentality of the industry, we needed to manage them with something other than prediction or product. I have always said that the financial industry has portfolio experts using one of four “P”s – prediction, person, product, or process. The first three are each a road to nowhere. Using a defined process to construct and implement portfolios is the only way to mitigate the ultimate peril – human risk. Unfortunately for market participants, not enough professionals use a definitive process, an absence that ultimately leads to poor performance.

MO: What inspired your decision to diversify the ownership of CitrinGroup?

Jonathan: Diversifying ownership has the advantage of creating longevity of the firm beyond my life. As a fiduciary for our clients, it is important that our management of their savings and fortunes exists for them in perpetuity. We feel a great deal of responsibility to each and every client – they entrust us with discretion over their investments. Our portfolio management is by process not person – allowing the very existence of our investment process to rest solely on one person’s shoulders would be improper, lack the type of rational thought we at CitrinGroup are known for, and certainly fall short of the integrity which our Director of Investment, Tim Mrock, instills in both of our portfolios each and every day.

MO: Have you had any mentors during the course of your career?

Jonathan: Having a mentor, or mentors, is extremely important. This is particularly true for entrepreneurs, as the sometimes lonely grind of starting a business mixes with many new experiences. It is so important to have one or more persons to lean on, ask for advice, and go to in times of both victory and defeat. Many have been willing to assist me with their tutelage throughout my career. In particular, I was lucky enough to find the tutelage of an amazing business coach, Ms. Jackie Trapenier. She is someone whose advice I trust implicitly, and interestingly someone from outside the investment industry. Moreover, she is not only a coach and mentor, but a good friend. Having an outlet for both ideas and issues is vital to the long-term success of anyone – particularly a leader. Isolation is a recipe for failure. My mentor has made me a better entrepreneur, investor, and person.

MO: What’s the biggest risk that you’ve ever taken and how did it turn out?

Jonathan: The biggest risk of my professional career was leaving a major Wall Street firm to start my own company. I was managing significant assets, had a very favorable situation, and could have sat in comfort behind the cherry wood desk provided me, literally until retirement. Other guys took big payouts from competitor broker-dealers. It wasn’t about money for me. I was hungry to be an entrepreneur and to start an investment firm that could transcend all the noise of the industry. For this financial theorist turned entrepreneur, jumping around from major Wall Street firm-to-firm for cash or atrophying behind a fancy-looking desk were not viable options. I intended to be a businessperson, and set-out to silence the industry while providing actual guidance to my clients.

MO: Are there any global financial trends that you think that our readers should be paying attention to or taking advantage of?

Jonathan: The current trend in emerging markets is profound. This goes beyond the traditional emerging markets such as Brazil, Russia, India, and China. It is directed at more remote economies of Vietnam, Columbia, Indonesia, Egypt, Mexico, Turkey, South Africa, and the like. There is tremendous opportunity in these regions that have youthful populations, a tremendous amount of industrialization, decent financial systems, and growth in a diverse number of sectors. With very difficult times currently existing in the more developed parts of the world, these other markets promise great upside to accompany the volatility of their circumstances. It is an interesting trend that deserves attention and could change the landscape of global business even more than expected.

MO: Why do you believe that this world would be a better place if everyone worked to be better at something, rather than bigger?

Jonathan: Unfortunately, our world has become dominated by profit seekers rather than those who stress quality over quantity. The finance industry in particular has fallen victim to such a mentality; investment professionals and companies preferring to be good at everything rather than great at one thing. This provides more opportunity for profit, but certainly less depth of knowledge. Simply, we are a Costco world – most opting for more over better. In the end, however, this is a very dangerous mentality. More products and more complexities meant less oversight in the financial industry, which not only led to the eventual Great Recession but if unchecked could produce even graver consequences in the future.

 

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