Small Business Success Q&A #19: Martinelli Discenza Investment Counsel

One of the things I value about the western Massachusetts business community is the extraordinary range of people one meets. Gary Martinelli is a prime example of this. He established Martinelli Discenza Investment Counsel in 2000 to provide portfolio management and investment advice to individuals interested in an active, value-oriented approach. His experience as an attorney in the areas of corporate and real estate transactions as well as securities law combined with his involvement in young companies as part of an angel investor group give him unusually broad perspective as an investment adviser and an observer of business in general.  So, it should be no surprise that when my colleague Jeanne Yocum asked me if I knew anyone who might have something to say about sustaining small business success, I thought of Gary. Here is his small business success story.

Name: Gary Martinelli

Company name: Martinelli Discenza Investment Counsel, Inc.

Location (town/state): Longmeadow, MA

Year founded: 2000

No. of employees: 4

Website: www.martinellidiscenza.com

Business description: We design and manage securities portfolios for individuals and families and their retirement accounts, trusts and closely-held business entities.

What have been the keys to your business success: We began our careers as lawyers where loyalty and commitment to clients are a given.  Investment management involves a “fiduciary relationship” with clients (again, loyalty and commitment).  Since we already had many relationships of trust with clients, albeit in a different context, we had a running start in our investment management business.

Best business advice you’ve ever been given: When I was still in school, my father suggested that I get a summer job in a grocery store to develop “price consciousness.”  I didn’t do it, but later, in the investment business, I came to appreciate that buying securities at a favorable or bargain price (a function of “price consciousness”) was the most important requirement for investment success.

Worst business advice you’ve ever been given: Buy Internet stocks in 1999 at price/earnings ratios of 40:1 or more.  I didn’t do that either.

What was the toughest thing you’ve ever had to do as a business owner: Discharging for job ineffectiveness an employee who was a friend and neighbor.

What advice would you give to someone just starting a business: Develop a plan for generating recurring revenue.  Unless the profit on a one-time sale is huge, one’s time is best spent on generating sales of services or products that result in regular repeat income.

Favorite all-time business book: Get Smarter: Life and Business Lessons by Seymour Schulich.  The author is a Canadian self-made billionaire who was an investment counselor, mining executive and oil investor and is now a philanthropist.  The book was intended to impart life and business lessons to today’s youth and contains invaluable advice for ambitious people of every age.  I gave copies to my four grown children and often give copies to clients and friends.

Favorite business book read in the past year: Asymmetric Returns – The Future of Active Asset Management by Alexander M. Ineichen.  The thrust of this sophisticated study of investment approaches is that if positive compounding of investment returns is one’s objective (it usually is), interim losses need to be minimized and that the route to curtailing and controlling losses is through “active” (as distinct from “passive”) investment management.  It is a great primer on hedge fund strategies.

Favorite online source(s) for business information/advice: I’m in the investment business and find great investment thinking and advice in the web-posted annual and quarterly reports of several mutual fund management companies including Grantham Mayo & Van Otterloo, Southeastern Asset Management, and Third Avenue Funds.

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