Memo to Mack

The prodigal son returns! After getting tossed from Morgan Stanley and First Boston one lesson should be clear this go around: you need to invest lots of time in cultivating good relations with your board members. But you have more immediate concerns:

• You need to bring back the rainmakers such as Vikram Pandit and Joe Perella without losing co-President Zoe Cruz – accomplishing this will take all your diplomatic skills;
  
• Once you stabilize the organization, you need to turn your attention to firing up the troops – giving them what they need to go out and win in the marketplace;
  
• Only then can you turn to the issue of long-term strategy. Based on their performance and prospects I think now would be a good time to dump the Discover Card – look at today’s Bank of America deal with MBNA. Eventually Morgan Stanley should lose its brokerage business but prices today are in the bargain basement – wait till they rise; and
  
• Ultimately you can add lots of value by investing the proceeds in expanding the traditional Morgan Stanley franchise – serving corporations and the executives they make wealthy.

Congratulations on your return. Morgan Stanley shareholders will be the beneficiaries!