Karen Firestone was a mutual fund manager at Fidelity Investments for 22 years, and one of the early women overseeing funds at the Boston-based financial giant. In 2005, she cofounded her own firm, Aureus Asset Management, which manages $1.4 billion for wealthy families. Firestone recently published a book on risk-taking, called “Even the Odds.”
1. Firestone’s first job out of Harvard Business School in 1983 was as an assistant fund manager to Peter Lynch, the famous Fidelity manager who ran the flagship Magellan Fund. She got the job even though she was pregnant with twins.
“It was an incredible experience,’’ Firestone said. “It was what made the people of my generation at Fidelity much better than we probably would’ve ever been. If you have a market genius talking to you every single day, some of it starts to rub off — or you’re not listening.”
2. After the Magellan stint, Firestone joined the ranks of her peers, working on industry sector funds from biotech to health care in a highly competitive environment. She got to run her first diversified stock fund in 1997, and by 2000, at what turned out to be the peak of the Internet bubble, she was appointed to succeed George Vanderheiden on the firm’s large Destiny I fund.
“The work we did at Fidelity, I thought, was deep and was thought-provoking, and it was, to me, fascinating to learn about companies and become an expert at them. That was the idea. You didn’t show up in somebody’s office to tell them about buying a stock unless you could answer all the questions that were going to come back at you. Because you didn’t want to look dumb. You didn’t want to be dumb ever, and particularly you didn’t want to be the dumb girl.”
3. Her new book analyzes risk-taking, from investing and corporate decision-making to running before daylight. She got her first big lesson on the market’s ugly downside in 2000, which, she said, felt even worse to her than when stocks plunged in the financial crisis of 2008.
“2000 and 2001 were really gut-wrenching. In a personal sense, I felt worse in 2000, because there were so many signs of a bubble. My predecessor on Destiny Fund, George Vanderheiden, was so right that this tech bubble was going to burst. He had gotten out of those stocks in 1998,’’ Firestone said. When she took over, it was tough to stay out of tech stocks, at the risk of falling behind the competition in a go-go market. But the downdraft was painful. “I really felt as if I should have known better in 2000.”
4. Firestone, a youthful 60 who runs with her dogs or spins most mornings, oversaw more than $12 billion at Fidelity. In 2005, she left to start her own firm, Aureus, with David Scudder. Their core equity investment strategy focuses on about 36 stocks at a time. It has returned an average 8.4 percent annually (after fees) since the firm’s launch, beating the benchmark Standard & Poor’s 500 index, which has returned 7.3 percent over that period.
“We try as hard every single day as we did the day before. We don’t coast. Because you can’t,’’ Firestone said. “We’re measured constantly.”
5. Firestone says she has a tendency to encourage her four kids and others in her life to look at choices through the lens of risk and reward. Her son Mike might have lifted a page from her book when, after working on Senator Elizabeth Warren’s campaign, he became Maura Healey’s campaign manager in her successful 2014 run for attorney general. He recently was named Healey’s chief of staff.
“It was a good risk to take, and they made it happen,’’ Karen Firestone said of her son’s work on Healey’s campaign.Beth Healy can be reached at email@example.com. Follow her on Twitter @HealyBeth.