Legg Mason exec says Vicksburg economy strong

Published 12:00 am Friday, August 8, 2003

[8/8/03]The second-in-command at one of the world’s most consistently successful investment firms gave a positive assessment of Vicksburg’s economic forecast on his visit here Thursday.

James W. Brinkley is an executive vice president of Legg Mason & Company Inc. and the president and chief operating officer of its private-client group, Legg Mason Wood Walker Inc.

“I think the outlook for Vicksburg today is better than it was 30 or 40 years ago,” Brinkley said in an interview at the company’s Belmont Street office.

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“I think education has improved here. You’ve got some entertainment factors that are here today that didn’t exist before. It’s a good place to raise your family. And these types of communities attract and keep people who are interested in a better quality of life.”

Legg Mason, headquartered in Baltimore, has 136 brokerage offices in 27 states, Canada, the United Kingdom, Spain and Singapore. Concentrated mainly in the Middle Atlantic states, the majority of the offices are east of the Mississippi River.

It has outperformed most of its competitors through the recent downturn in the stock market, posting increased earnings in 2001, with an upward trend since 1999 broken only by a 2.2 percent decrease during the year that ended March 31, 2002.

Asked how the firm seemed to have avoided the pitfalls that reduced larger competitors’ earnings during 2001 and 2002, Brinkley pointed to its buying of more bonds about four years ago.

“As a firm, we’ve been extremely balanced,” he said, adding that, of the firm’s $217 billion in assets under management, about 70 percent is in bonds and 30 percent is in stocks.

“We’ve had an unusually strong fixed-income market over the last three years,” he said. “We built up about four years ago, and fortunately we were built up in advance of (the downturn in the stock market) to take advantage of it.”

Legg Mason began operating under that name in 1970, when Raymond A. “Chip” Mason’s firm, Mason and Company, merged with Legg and Company, founded in Baltimore in 1899. Eight years earlier, in 1962, Mason had begun his business in Newport News, Va. Also that year, Brinkley joined the company as its second employee.

The company emphasizes its focus on long-term investing. Among its clients here are individuals, civic organizations and institutions, Brinkley said. As a firm, the money Legg Mason manages is about 70 percent institutional and 30 percent individual, he added.

“As a result of what we do, we think we can help improve the qualities of people’s lives for generations to come,” Brinkley said. “As stewards of people’s wealth, we can help them build and protect their wealth, and many of them will share that wealth with their community and give back to the community. So we’re able to help the entire community by doing a better job for our clients.”

Since Legg Mason went public 20 years ago, its shares have risen more than 2.5 times the market average, outpacing those of nearly every other financial-services firm, Fortune magazine reported in February. Ranked by worldwide assets under management as of Dec. 31, 2002, it is the 28th largest money manager in the United States, up from 30th the previous year and 53rd five years earlier.

“I would tell them to remember that mood and emotions create opportunities, and make sure they buy the opportunity and not the mood and emotions,” Brinkley said when asked what advice he would offer Vicksburg investors.

“Make sure that they are looking longterm because, in America, economic optimism is economic realism.”