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The Local Imperative 51
the boundaries of a state. It can also extend to a geographic region
with a shared identity, such as New England. The companies in
your immediate community—the mom- and-pops, the farmers, the
homegrown startup—are certainly at the core of what we think of
when we say local. But there are also publicly traded companies in
most regions that benefi t the local economy.
That’s the philosophy at Marks Wealth Management of
Minnetonka, Minnesota, just outside of Minneapolis—a region
rich with local companies that made good. The fi rm’s core equity
portfolio, composed of about 35 stocks, has a strong Midwestern
fl avor. Ben Marks, president and chief investment offi cer, says that
appeals to his clients. “Midwesterners think we’re a little hardier
and a little more conservative, a little more honest, more hardworking,”
he says. “It may not be true, but we like to think it’s
true. But I do think the message really resonates with our clients.”
In addition to pride of place, there’s also a sense of comfort
with the familiar. “Our clients would much prefer to own Medtronic
than some company in Japan or China that might make
a similar product,” says Marks. “You’re not going to know the management,
you’re just not going to know the corporate culture.”
Give Darwin a Chance
Some people will argue that small businesses for generations have
gotten by just fi ne on funding culled from savings, friends and family,
credit cards, and bank loans. And that, while these sources of
funding may be harder to come by today, it is just a temporary condition.
But that would overlook some fundamental changes over
the past few decades that have put small businesses at a distinct disadvantage.
We are dealing with structural issues and entrenched
bias, not a cyclical blip that will disappear with a rise in the Dow. In
fact, the Dow Jones Industrial Average was up 11 percent for 2010,
thanks to record corporate profi ts, but small fi rms were still struggling
to raise funds and unemployment barely budged.
The competitive playing fi eld, long tilted in favor of big business,
has grown even more lopsided. Large corporations and
national chains enjoy a huge competitive advantage over their
smaller rivals. They can raise capital more easily and cheaply,