Marko Kolanovic has had a 19-year career at JPMorgan predicting movements in global markets, and during that career he’s got many things right. More recently, though, he’s got quite a few things wrong. Kolanovic’s apparently involuntary exit today from his job as chief global market strategist, and his replacement by his junior, is a sharp reminder that if MDs don’t jump the hoops, they will be out.
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Bloomberg reported today that Kolanovic is leaving JPMorgan and will be “exploring other opportunities,” which is a well-worn euphemism for “not retiring and doesn’t have a job lined up.” While he does that, his old job is going to Dubravko Lakos-Bujas instead.
Lakos-Bujas has also been at JPMorgan for a long time. During most of his 13 years with the bank, he’s worked under Kolanovic. Kolanovic promoted Lakos-Bujas to head of U.S. equity and quantitative strategy in 2014, when Kolanovic was global head of macro derivative and systematic strategies. Kolanovic also seems to have had a hand in promoting Lakos-Bujas to global head of macro equity strategy in October 2021.
Now, Lakos-Bujas will be going it alone while his former boss is “exploring.” He might want to learn from Kolanovic’s rise and fall. Nine years ago, Kolanovic was feted for his Gandalfian ability to move markets after correctly calling a September crash in equities. He did it again in 2020, when he said stocks would rise during the pandemic, and they duly did.
In the past two years, though, Kolanovic’s magic stopped working. The FT notes that he called a rise when there was a fall, and he called a fall when there was a rise. Nonetheless, it looks a bit like he’s now being punished for being a rare bear in a sea of optimists.
Lakos-Bujas is a pessimist, like his old boss. Three months ago, he was warning that a flash crash could occur at any time in the equities markets. All it would take, said Lakos-Bujas is for one big fund to start delevering, for a second fund to hear about it, and for a third to be “caught off guard, and the next thing you know, we start having a bigger and bigger momentum unwind.”
Having seen his mentor’s fate, he might want to pipe down a bit. – Or to hope that the crash happens before his honeymoon period in his new job ends.
Kolanovic, meanwhile, can bide his time. History is littered with veterans who predicted crashes, were fired before they happened, and then vindicated as they basked in the embers of their careers. Just ask Tony Dye, London’s famous “Dr Doom”, who was compelled to step down from his job as the chief investment officer of Phillips & Drew Funds Management for being too pessimistic in 2000 – weeks before his pessimism was manifested.
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