Rex Sinquefield

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Rex Sinquefield
Born
Rex Andrew Sinquefield

September 7, 1944 (1944-09-07) (age 75)
Alma materSaint Louis University
University of Chicago
OccupationPresident of Show-Me Institute
Political partyRepublican

Rex Andrew Sinquefield[1] (/ˈsɪŋkfld/; born September 7, 1944)[2] is an American businessman, investor, and philanthropist who has been called an "index-fund pioneer".[3] He is active in Missouri politics, his two main interests being rolling back the income tax[4] and increasing public funding for charter schools.[3]

Early life and education[edit]

He had 18 cleft palate operations before age five.[5] His father died when he was five years old. Because of the family's poverty, Sinquefield and his brother were placed in a local Catholic orphanage,[3] the Saint Vincent Home for Children in St. Louis, Missouri.[6] The school was run by strict German nuns who made the children sleep in big dormitories, wash the dishes, clean the rooms, and scrub the floors with steel wool. Sinquefield told the BBC that the school's regimentation taught him self-discipline.[7] When they were teenagers, Sinquefield and his brother returned home to live with their mother, who resented the city's 1% wage tax.[8]

He graduated from Bishop DuBourg High School in 1962.[9] He studied to be a priest at the Diocesan Seminary at Cardinal Glennon College in St. Louis. At the time, he owned $200 worth of one stock.[10] During the Vietnam War, he served as a “high-end gopher” in the finance corps at Fort Riley, as he put it. Working with top-secret records, he found it “easy, boring, safe and a terrible waste of manpower.”[5]

He then studied economics at Saint Louis University, but later said it was "all a waste, Keynesian crap".[6] After receiving a business degree from Saint Louis University, he went to the University of Chicago, where he studied under future Nobel Prize winner Merton Miller, who described the efficiency of the world's stock and bond markets, and Eugene Fama, who coined the term “efficient markets".[5] He received an MBA from Chicago.[6]

Career[edit]

Sinquefield then went to work at the American National Bank of Chicago where he put his professors' ideas into practice, developing, in 1973, the first S&P 500 passively managed index fund.[5][11] Seven years later, the fund managed $12 billion.[3]

In May 1974, in the depths of the worst bear market since the 1930s, Sinquefield and Roger Ibbotson made a brash prediction: The Dow Jones Industrial Average, floundering in the 800s at the time, would hit 9,218 in 1998 and 10,000 by November 1999.[3]

Dimensional Fund Advisors[edit]

In 1981, Sinquefield and another University of Chicago teaching assistant, David Booth, co-founded Dimensional Fund Advisors, the first passive fund focused on small (microcap) companies customarily ignored in large institutional portfolios. As of June 30, 2018, it managed more than $582 billion in assets.[12][5]

Dimensional Fund Advisors' investment strategy has been said to create an optimal portfolio consisting of various funds that emulate different style and size attributes of various securities markets worldwide, so that one fund might behave like the S&P 500, another might correlate with just the value stocks in the S&P 500, while a third might emulate the performance of all small-cap stocks. Sinquefield is a proponent of passive investment, meaning that he believes you simply cannot beat the market.

Passive investing, Sinquefield has said, generally refers to the idea that you are going to get market rates of return from whatever category you're investing in. If you are invested in stocks, you will do no better or worse than the market over time. If you limit yourself to, say, small-cap stocks, then your return, over time, will be no better or worse than the returns on the aggregate of small stocks. We believe that you're not going to be able to do much better than that because the market doesn't misvalue securities. The prices are right. If you believe in active management, you're saying that there are people who can make valuation judgments that are superior to the market.[10]

In 2005, he retired from DFA because he was “bored” and returned to St. Louis, where he became involved in politics and philanthropy.[3]

Politics[edit]

Show-Me Institute[edit]

On his return to St. Louis, Sinquefield co-founded the Show-Me Institute with R. Crosby Kemper III, a Kansas City banker. Based in Clayton, Show-Me is a think tank that commissions studies on public-policy issues.[5] It has been labeled libertarian,[13][14][15] conservative,[16][17] and free-market.[18] He is president of the institute, whose motto is “Advancing liberty with responsibility by promoting market solutions for Missouri public policy.”[3]

Show-Me has successfully lobbied for a cable franchise reform bill and HB 818, which made Missouri the first state to let employers contribute pretax dollars to employees' health-savings accounts. Show-Me has also opposed governments' use of eminent domain.[5]

Campaign contributions[edit]

Sinquefield became a major financial contributor to political campaigns of both political parties in Missouri politics after the Missouri legislature ended campaign finance limits in 2009.[19] According to a 2015 Governing Magazine article, "big majorities" in both houses of the Missouri legislature have received campaign contributions from Sinquefield.[20] He has particularly focused on altering public education, tax reform, and accountability in government.[21]

In 2014 and 2015, he donated $1 million to Republican Bev Randles' 2016 campaign for Lieutenant Governor of Missouri[22] and three quarters of a million to Kurt Schaefer, a Republican candidate for Attorney General.[23] Sinquefield has also donated to Missouri candidates Shane Schoeller, Chris Koster, and Sarah Steelman, as well as to the 2016 gubernatorial campaign of Catherine Hanaway.[3][24]

In 2014, he supported a ballot initiative to abolish teacher tenure in Missouri[3] and he is a major funder of other groups and PACs, such as Pelopidas, LLC.[25]

Tax policy activism[edit]

Many of Sinquefield's efforts in recent years have been focused on changing tax policy in Missouri. He advocates eliminating the state's income tax and replacing it with a more comprehensive sales tax.[11] Sinquefield advocates replacing Missouri's and Kansas' income tax with a state sales tax[20] on things like childcare, restaurants, and hotels.[4]

Sinquefield also gave money to the group Kansans for No Income Tax which helped governor Sam Brownback lower the state income tax in 2012.[3] Dubbed the Kansas experiment, this policy decreased state revenues by hundreds of millions of dollars[26]; caused spending on roads, bridges, and education to be slashed;[27][28] and failed to lift Kansas' below-average economic growth.[29] In 2017, the Republican-controlled Legislature of Kansas voted to roll back the cuts and overrode Brownback's veto.[30]

Sinquefield also has repeatedly backed measures to repeal the earnings taxes of St. Louis and Kansas City, Missouri.[31]

He is the primary financial supporter of the Let Voters Decide committee.[32] In 2010, the committee placed a statewide initiative on the Missouri ballot. Called Proposition A, it would prevent all Missouri communities except Kansas City and St. Louis from imposing earnings taxes. It would also allow Kansas City and St. Louis voters to vote on whether to retain their earnings taxes.[32] Missourians passed proposition A with a large margin – 68.4% YES / 31.6% NO (1,294,911 YES votes to 598,010 NO votes).[33]

On January 5, 2011, Let Voters Decide submitted nine initiative petitions to the Missouri Secretary of State calling for a repeal of the state's income tax – with a top rate of six percent. The petitions also called for a higher sales tax, capped at seven percent, that would be applied to virtually any good or service transaction involving individuals.[32] Sinquefield and Let Voters Decide President Travis Brown say that replacing the income tax with a sales tax would help create jobs, promote economic development and make state revenue collection less volatile.[34] In 2014, Missouri lowered its income tax rate.[35]

Local control of St. Louis Metropolitan Police Department[edit]

Sinquefield supported the successful effort to return local control of the St. Louis Metropolitan Police Department to the City of St. Louis.[36] Since 1861, the police department had been run by a five-person board that included four gubernatorial appointees.[37][37]

Sinquefield donated $300,000 to "A Safer Missouri", a group supporting the campaign for local control.[38] A Safer Missouri endorsed state legislation in favor of local control,[39] along with a ballot initiative filed with the Missouri Secretary of State, which will be pursued if the legislative efforts fail, according to a spokeswoman for A Safer Missouri.[40] The ballot initiative was filed and entitled Proposition A.[39]

Local control, the Proposition A ballot initiative, received broad support,[41] including St. Louis Mayor Francis Slay,[39] and the Missouri Democratic Party[42][43] On February 22, 2011, the House of Representatives passed House Bill 71, the local measure in that body, by a vote of 109–46.[43] The bill went on the Senate,Senate Bill 23, which failed. Thus the ballot initiative was filed and on November 6, 2012 Proposition A passed with 63.9% to 36.1%.[44]

Philanthropy[edit]

Sinquefield and his family donate funds to a wide variety of organizations through the Sinquefield Charitable Foundation. The foundation has donated in particular to the Today and Tomorrow Education Foundation, the Children's Education Alliance of Missouri, the Special Learning Center, the Dual Masters Scholarship Program at Saint Louis University, the Chess Club and Scholastic Center of Saint Louis, World Chess Hall of Fame, and the Mizzou New Music Initiative.[45]

In 2009, Sinquefield and his wife gave $1 million to the University of Missouri's School of Music.[46] Those funds were used to create the New Music Initiative, an effort designed to encourage young people to become composers and to support new works of music composition.[47] Sinquefield has made extensive contributions to the St. Vincent Home for Children.[48]

Saint Louis Chess Campus[edit]

In 2007, Rex Sinquefield opened the Chess Club and Scholastic Center of Saint Louis, a non-profit organization. An educational organization, its mission is to "maintain a formal program of instruction to teach the game of chess and to promote and support its educational program through community outreach and local and national partnerships to increase the awareness of the educational value of chess."[49] In August 2010, Sinquefield provided seed funding to move the World Chess Hall of Fame to St. Louis, citing the Chess Club's presence and reputation.[50] The Sinquefield Cup is named after him.

In 2016, BBC News reported that Sinquefield, who likes chess “so much he's put tens of millions of dollars into the game,” turned St. Louis into a chess capital because he believes that chess can transform children and their academic lives.[7]

Other activities[edit]

Board memberships[edit]

Sinquefield is a director of St. Vincent Home for Children in St. Louis, and a life trustee of DePaul University. He serves on the boards of Saint Louis University, the St. Louis Symphony, the St. Louis Art Museum, the Missouri Botanical Garden,[51] the Contemporary Art Museum St. Louis[52], and the Chess Club and Scholastic Center of Saint Louis.[53] He advises the Archdiocese of San Diego on finance.[5]

Book[edit]

With Yale School of Management professor Roger G. Ibbotson, he co-wrote the 1989 book Stocks, Bonds, Bills and Inflation, a study of stock market returns.[54]

Personal life[edit]

He and his wife, Jeanne, met at the Judo Club at the University of Chicago. They have three children and worked together at DFA, where Jeanne ran the trading department.[5]

Since their return to St. Louis, Sinquefield and his wife have divided their time between a 1,000-acre farm and a mansion in the Central West End. St. Louis Magazine said he showed people around the orphanage now called St. Vincent's Home for Children.[5]

He is a devout Roman Catholic.[5]

References[edit]

  1. ^ Rex Andrew Sinquefield Executive Profile & Biography Bloomberg
  2. ^ "Rex Sinquefield". Retrieved December 30, 2015.
  3. ^ a b c d e f g h i j Riley, Naomi Schaefer (October 26, 2012). "The Weekend Interview with Rex Sinquefield: Meet One of the Super-PAC Men". WSJ. Retrieved December 30, 2015.
  4. ^ a b "Show Me the Money: Meet the Multimillionaire Squeezing Missouri's Schools". PR Watch. Retrieved December 30, 2015.
  5. ^ a b c d e f g h i j k Cooperman, Jeannette (June 23, 2009). "The Return of the King". www.stlmag.com. Retrieved March 14, 2019.
  6. ^ a b c Rex Sinquefield biography. Retrieved October 29, 2013.
  7. ^ a b Edmonds, David (May 12, 2016). "Creating the world's new chess capital". Retrieved March 14, 2019.
  8. ^ "Rex Sinquefield: The Tyrannosaurus Rex of State Politics". www.governing.com. Retrieved September 6, 2019.
  9. ^ DB Alumni. Archived August 7, 2012, at the Wayback Machine Retrieved October 29, 2013.
  10. ^ a b "An Interview with Rex Sinquefield". www.ifa.com. Retrieved March 14, 2019.
  11. ^ a b Rex Sinquefield's Crusade Against Income Taxes. Business Week. March 12, 2012.
  12. ^ Dimensional Fund Advisors. Retrieved September 19, 2018.
  13. ^ "Arch City Chronicle". Archive.archcitychronicle.com. June 9, 2008. Archived from the original on July 7, 2011. Retrieved September 28, 2010.
  14. ^ "The Volokh Conspiracy – Eminent Domain in Missouri". Volokh.com. Retrieved September 28, 2010.
  15. ^ Finkel, Tom (July 17, 2008). "Rex Sinquefield's Chess Mecca in the CWE – St. Louis News – Daily RFT". Blogs.riverfronttimes.com. Archived from the original on July 27, 2011. Retrieved September 28, 2010.
  16. ^ Slate Links to Show-Me Institute Study, Show-Me Daily, 2008-11-14, accessed 2009-3-25
  17. ^ ""Mississippi Calls for Refore", GavelGrab, 2008-8-11, accessed 2009-3-25". Archived from the original on August 1, 2009. Retrieved March 25, 2009.
  18. ^ https://archive.is/20081012051710/http://www.stltoday.com/blogzone/political-fix/political-fix/2008/04/tax-break-for-aircraft-firm-flies-through-house/. Archived from the original on October 12, 2008. Retrieved September 7, 2016. Missing or empty |title= (help)
  19. ^ Power Players: Missouri's 17 largest political donors from 2008 to 2013. Retrieved October 29, 2013
  20. ^ a b Greenblatt, Alan (June 2015). "Rex Sinquefield: The Tyrannosaurus Rex of State Politics". Governing Magazine. Retrieved June 21, 2015.
  21. ^ "King Rex". POLITICO Magazine. Retrieved December 30, 2015.
  22. ^ Lee Enterprises. "Missouri's big money man gives $1 million to 2016 lieutenant governor candidate". stltoday.com. Retrieved December 30, 2015.
  23. ^ "Schaefer Has Sinquefield's Back...and Money". Archived from the original on January 4, 2016. Retrieved December 30, 2015.
  24. ^ http://www.kansascity.com/news/local/news-columns-blogs/the-buzz/article83649927.html
  25. ^ A Reporters' Guide to Rex Sinquefield and the Show-Me Institute
  26. ^ Casselman, Ben; Koerth-Baker, Maggie; Barry-Jester, Anna Maria; Cheng, Michelle (June 9, 2017). "The Kansas Experiment Is Bad News For Trump's Tax Cuts". FiveThirtyEight. FiveThirtyEight. Retrieved October 4, 2017.
  27. ^ "Kansas Legislature approves budget deal, after lawmakers deliver blistering critiques of state finances," Archived October 4, 2017, at the Wayback Machine May 2, 2016, Topeka Capital-Journal
  28. ^ "Kansas Republicans Sour on Their Tax-Cut Experiment" February 24, 2017, The Atlantic
  29. ^ Gleckman, Howard (June 7, 2017). "The Great Kansas Tax Cut Experiment Crashes And Burns". Forbes. Retrieved November 20, 2018.
  30. ^ Berman, Russell (June 7, 2017). "The Death of Kansas's Conservative Experiment". The Atlantic. Retrieved June 7, 2017.
  31. ^ "Yael T. Abouhalkah: Earnings tax opponents have lots of money — but little else". kansascity. Retrieved April 10, 2016.
  32. ^ a b c Sinquefield, allies to seek ballot proposal ending Missouri's income tax. Archived November 1, 2013, at the Wayback Machine January 6, 2011.
  33. ^ "Missouri Secretary of State". Retrieved December 30, 2015.
  34. ^ "Group seeks to swap state income tax for sales tax"
  35. ^ https://www.forbes.com/sites/travisbrown/2014/05/09/missouri-legislature-overrides-veto-joins-midwest-tax-cut-movement/#27c91ce33329
  36. ^ Lee Enterprises. "House committee passes local control measure; Sinquefield backs it". stltoday.com. Retrieved December 30, 2015.
  37. ^ a b "seMissourian.com: Opinion Column: Why you should care about who controls the St. Louis Police Department (02/14/11)". seMissourian.com. Retrieved December 30, 2015.
  38. ^ "Politics & Government - Springfield News-Leader - news-leader.com". Springfield News-Leader. Retrieved December 30, 2015.
  39. ^ a b c "Missouri Proposition A 2012 - The Local Control Initiative". Retrieved December 30, 2015.
  40. ^ "Sinquefield's latest cause: Local control for St. Louis Police" Archived July 18, 2011, at the Wayback Machine
  41. ^ "Broad Support - A Safer Missouri - Missouri Proposition A 2012 - The Local Control Initiative". Retrieved December 30, 2015.
  42. ^ "Missouri Democrats Call for Local Control of STLPD". Retrieved December 30, 2015.
  43. ^ a b "House committee passes local control measure; Sinquefield backs it" Archived July 13, 2011, at the Wayback Machine
  44. ^ http://enr.sos.mo.gov/ENR/Views/TabularData.aspx?TabView=StateRaces^Federal%20/%20Statewide%20Races^011656688155[dead link]
  45. ^ Rex Sinquefield Philanthropy. Retrieved October 29, 2013.
  46. ^ $1 Million Gift Supports New Music at MU. March 9, 2009.
  47. ^ School of Music. "Mizzou New Music Initiative - School of Music - College of Arts and Science - University of Missouri". Retrieved December 30, 2015.
  48. ^ http://www.governing.com/topics/politics/gov-rex-sinquefield-missouri.html
  49. ^ Our Beginnings. Archived April 17, 2013, at the Wayback Machine Retrieved October 29, 2013.
  50. ^ About the Hall of Fame. Retrieved October 29, 2013.
  51. ^ Rex Sinquefield Biography. Archived March 8, 2014, at the Wayback Machine Retrieved October 29, 2013.
  52. ^ CAM Board of Directors. Retrieved October 29, 2013
  53. ^ Our Board. Archived February 19, 2012, at the Wayback Machine Retrieved October 29, 2013.
  54. ^ Stocks, Bonds, Bills and Inflation: Historical Returns (Stocks, Bonds, Bills & Inflation Yearbook) (9781556231407): Roger G. Ibbotson, Rex Sinquefield: Books. September 9, 2009. ISBN 978-1556231407.

External links[edit]

  • An interview with Rex Sinquefield explaining the investment philosophy he pioneered.
  • An article on Sinquefield's receipt of the 1999 Distinguished Entrepreneurial Alumni award from the University of Chicago graduate school of business.
  • Fortune article on Sinquefield's investment predictions.
  • Article on Sinquefield's political activities in Missouri.
  • [1] Saint Louis Chess Club and Scholastic Center