PHONE: 414-223-1099 TOLL-FREE: 1-800-236-1096
SEND US A QUESTION OR COMMENT FOR OUR NEXT SHOW

For What It’s Worth: Skin in the Game

For What It's Worth MAIN

By Joel Dresang

When someone has skin in the game, it means they have a stake in an outcome and thus, are more invested.

Kyle Tetting has talked about research showing that mutual funds tend to have better results if their portfolio managers personally are invested in the funds. What’s more incentivizing than having a share in the results? By allying their interests with investors in their funds, the managers would be motivated to minimize risk and optimize reward.

Credit for coining the term commonly goes to the Oracle of Omaha, Warren Buffett. But as wise and quotable as the billionaire is, the internet can easily overattribute him. As Yogi Berra is said to have said, “I never said most of the things I said.”

For What It’s Worth is an occasional look at the meanings and origins of words and expressions investors may encounter.

The late wordsmith and New York Times columnist William Safire confronted Buffett about the origins of “skin in the game.” Safire wrote in 2006 that a Buffett spokesman “denied unequivocally that his boss was the coiner …and refuses all responsibility for the viral spread of skin in the game.”

In fact, Safire found the expression in an article in the Oakland Tribune in 1912—18 years before Buffett was born. And long before that, “skin” was one of the numerous slang synonyms for money. British criminals referred to wallets and purses as skins, insinuating their leather composition. In the early 19th century, to skin meant to fleece, to separate someone from their money.

One’s skin is intimate, sensitive, precious.

When Job survives his biblical trials by the skin of his teeth, it is the narrowest margin imaginable. When Antonio pledges a pound of flesh in Shakespeare’s “The Merchant of Venice,” he puts his very life at stake.

And, when thick-skinned investors prefer mutual funds in which managers have no skin in the game, well, that may be ill-advised, but it’s no skin off my nose.

Joel Dresang is vice president-communications at Landaas & Company.

(initially posted April 30, 2019)

Send us a question for our next podcast.
Not a Landaas & Company client yet? Click here to learn more.
More information and insight from Money Talk
Money Talk Videos
Follow us on Twitter.
Landaas newsletter subscribers return to the newsletter via e-mail.


Text Size:  A  A  reset

No client or potential client should assume that any information presented or made available on or through this website should be construed as personalized financial planning or investment advice. Personalized financial planning and investment advice can be rendered only after engagement of the firm for services, execution of the required documentation, and receipt of required disclosures.
Landaas & Company performs investment advisory services only in those states where it is licensed, or excluded or exempted from state investment advisor licensing requirements. All responses to inquiries made by prospective customers to this internet site will not be made absent compliance with state investment advisor and investment advisor rep licensing requirements, or applicable exemptions or exclusions from licensing.
Please contact the firm for more information.
MEMBER FINRA MEMBER SIPC MSRB REGISTRANT

Powered By: mindspike design
ADDRESS: 411 E. WISCONSIN AVENUE, 20TH FLOOR MILWAUKEE, WI 53202
© 2019 Landaas & Company