Many years ago I was asked by a bank for which I was employed to look into investing in the entertainment business. I had no idea how to analyze the industry but was lucky enough to have had some associates from a previous employer who had migrated into the finance side of a couple of the big movie studios. I sought them out and, fortunately for me, they confidentially but thoughtfully advised me to run the other way. The crux of their advice was that the Hollywood had learned decades before how to rig the game in their favor and no outside investor stood a chance.

Some time much later, I was offered the opportunity to invest in a very lucrative business that generated lots of cash. It looked great but my nose twitched every time I thought about pulling the trigger. The investment turned out to have been quite good for the sponsors but after they had cashed out I happened to be sitting in the background as they discussed another similar type of investment. Again it involved a lot of cash income but this time they would be passive investors. They immediately dismissed the opportunity as they wouldn’t have the “first count”. I understood then why my nose twitched and added another industry to my list of can’t wins as an outsider.

All of this is a way of taking a long road to my newest addition to that list, any financial services company that attempts to justify large employee bonuses as a necessary part of their business model. About all I needed to see was the following chart from the WSJ:

Talk all you like about smart people working very hard and taking all sorts of exceptional risks. It will fall on deaf ears here. Just one more industry that has the deck stacked in its favor.

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