As a first-year student at Harvard Business School in 1968, James Rothenberg felt very poorly prepared.
Many of his fellow students were older, with years of business or military experience under their belts; Rothenberg entered the Business School right out of Harvard College. What’s more, he had concentrated in English, and all of a sudden the years he had spent studying Shakespeare and Hemingway seemed pretty irrelevant, at least to a graduate program in business administration.
But as the year progressed, Rothenberg found that his undergraduate education had given him something that turned out to be a valuable asset in the business world, a knack for written communication.
“I found that I had a special talent that has gone with me through the last 36 and a half years,” said Rothenberg. “I can study massive amounts of material, I can find the key issues, and I can summarize them and present them in a logical, straightforward way. My conclusions may not always be right, but they are always clear, understandable, and logical.”
Today Rothenberg is a leading figure in the investment world as well as being Harvard University’s treasurer and a member of the Harvard Corporation and Board of Overseers. Since 1994, he has served as president and as a director of Capital Research and Management Co., a principal subsidiary of the Capital Group Companies Inc., and as the investment adviser to the American Funds. The American Funds group is the third-largest mutual fund family in the United States.
Rothenberg is also president and director of The Investment Company of America, chairman of The Growth Fund of America and Fundamental Investors, and a director of the Capital Group. A chartered financial analyst, he has worked within the Capital organization since 1970.
On March 6, he spoke informally with a group of undergraduates on the topic “The Humanities: A Way in the World.” The event was the first in a series for undergraduates concentrating or thinking of concentrating in the humanities.
In addition to training students in analyzing information and presenting their conclusions clearly and persuasively, studying literature is good training for making decisions with incomplete information, Rothenberg said.
“The deeper one gets into studying literature, the more one sees there’s no single right answer to a problem the way there is in mathematics or the sciences. The creativity one exercises in analyzing works of literature and drawing conclusions about them is very valuable in the investment world where one is constantly faced with the task of making investment decisions based on imperfect knowledge.”
A knowledge of literature and the humanities can also be helpful in managing people, Rothenberg said.
“Knowing how to motivate people, how to reinforce values and cultures, understanding what drives people — again, that all leads back toward the humanities.”
Rothenberg added that even today he spends more time reading works of literature and history than he does studying stock prices and economic data, but that as an investor he feels in no way at a disadvantage as a result of that choice.
Asked about the role of imagination in business, Rothenberg warmly extolled its value as a tool for peering into the future, something business managers must do on a regular basis if they hope to maintain the vitality of their firms.
“Most investors invest looking in the rearview mirror. The problem with that is you make the most money by anticipating change. I spend a great deal of my time thinking about how the world will look three or four years from now.”