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TXI1126 EDITORS NOTE

November 23, 2018

The best thing about producing Texas Inc. is the opportunity to meet some of the smartest and most successful people in the state.

Today’s cover story on Gilbert Garcia was born of one of those opportunities.

It is refreshing to meet business leaders who are not so caught up in the daily grind of their work, or the constant need to talk their book or flaunt their ego, that they can no longer be real.

Garcia is real. He built a fixed-income firm that manages $12 billion, yet never missed a game as a father or youth sports coach. He inspires his associates but does not drive them so hard that they make the mistake of always putting work and ambition before family and having a life.

He’s deeply involved in the community, conversant on topics from markets to pop culture, and oozes with passion about almost everything. Yet he is also, by his own admission, a bit boring. “If we were a football team, we would be a very boring running team, with a strong defense that controls the clock and has no penalties and no turnovers,” he told Texas Inc.

The secret in the investment business - which shouldn’t be a secret - is to never lose money.

It’s usually better to go for small and steady gains, quarter-by-quarter, year-by-year, than to take big risks and lose principal. One big set back - like the kind of dips we saw in 2008 - can wipe out years of successful investing.

Garcia and I share a similar view of the economic cycle: That it’s overdue for more than a 10 percent correction. We talked about how the market was likely to plunge at any moment, and then days later it did. Of course, we also both agree it’s both dangerous and a bit idiotic to try to predict the future. No one really predicts the future. But you can spot trends.

Here are some obvious trends for those not prone to blind optimism: Interest rates will be going up for the foreseeable future. The Federal Reserve has been signaling in that for years. We’re in a trade war, geopolitical uncertainty is on the rise and the global economy is slowing - just watch the news.

For these reasons, 2019 could be a volatile year, filled with risks but also opportunities for those paying attention.

We’ll be watching it all through the lense of Texas, right here in Texas Inc. And the best part is, we’ll be meeting some great business minds along the way.

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