The inventor of a popular Reagan-era economic principle is now a mutual fund manager at Huntington Bank.
Arthur Laffer, 63, the creator of the economic theory that argues cutting taxes creates economic prosperity and tax revenues, became friends with Huntington CIO Randy Bateman during the late 1980s and now manages the companys newest fund, the Columbus Dispatch reports.
Laffer told the newspaper he counts Bateman as a "terrific friend" whom he can "trust." Apparently, the feeling is mutual, because Laffer does not use basic principles when selecting stocks for his Huntington Macro 100 fund. He does not look at income, or cash flow or balance sheets, but rather the broader indicators. When the fund opened May 3, it had $1 million in assets. Less than a month later, it has $8 million.
That Laffer who has advised both Reagan and former British Prime Minister Margaret Thatcher is working with Bateman is hardly a surprise. Their friendship aside, Bateman has counted on Laffers advice for years.
Laffer says he still believes in his theory, "supply-side economics," and added that his fund strategy is based on a theory he developed in 1978. Although Morningstar does not rate funds until they reach their third birthday, it appears for now that Laffers different thinking and background is an asset to Huntingtons (and investors) bottom line.
His most bold theory is that a companys location is the key to whether it will be successful. Ohio, for instance, has a bad tax structure.
"The fund is not really based on whether a company is good or bad. It's based on where it's located and whether that is good or bad," he said.