Charles M.C. Lee is a man of many interests. A highly regarded academic who specializes in forensic accounting and behavioral finance, probably less well-known are his certificate in biblical studies from the Ontario Theological Seminary and his passion for trout fishing.
Now, Mr. Lee is bringing his talents to Barclays Global Investors, San Francisco, where he was just named managing director and director of accounting research, a new position. He has left behind his chaired professorship at Cornell University, Ithaca, N.Y., and his role as director of the Parker Center for Investment Research at Cornell's Johnson School of Management. He remains co-chair of the accounting department at Peking University's Guanghua School of Management, recruiting American academics for the Chinese school, Mr. Lee said.
Mr. Lee, who won the Graham and Dodd Award in 1999, will bring his accounting and finance acumen to bear on BGI's stock-picking process. For example, he plans to study indicators of quality of earnings, and to develop a more systematic approach of identifying early warning signals for misleading corporate accounting.
"On the downside, we want to avoid torpedoes" — companies, such as Enron Corp., whose blowups devastate performance, he said. In fact, one of Mr. Lee's students at Cornell identified problems at Enron a year and a half before the company's stock price imploded.
"On the upside, we want to find companies that are doing so well that they want to stuff their profits" into the future, he said.
What may prove toughest for the new Bay Area resident is where to practice his fly-fishing: he now faces a three-hour drive to popular fishing spots. A practiced student in the art of tying his own flies, Mr. Lee said one has to study what attracts trout in any locale.
"You can go to the same spot, you can fish there for years and not know what really works," he said.
However, Mr. Lee declined to reveal any of his secrets. "It's much easier to give stock tips than to divulge the magic of fly-fishing. I'd much rather give stock tips," he laughed.
