All It Takes is One Good Idea

The invention of the money market fund. The Wall Street Journal recounts how Bruce R. Bent and and his partner Henry B.R. Brown brought it off:

Around 1970, a market disparity attracted their attention. Bank savings deposits were capped at 4.5% interest, while the yield on three-month Treasury bills was about 8%. But Treasury had a $10,000 minimum investment. Messrs. Brown and Bent's solution: Put investments smaller than that together to buy Treasurys, making their high yields available to people with less than $10,000 to invest.

One day, "I was at my desk, looked up at my partner and said, 'Why not a mutual fund?"

--Wall Street Journal December 8, 2008, "A Money-Fund Manager's Fateful Shift"

That's the way Bent has told it; apparently people close to Brown say he deserves shared credit, but Brown is dead. Bent, for his part, is in investors' crosshairs as the man who "broke the buck"--failed to pay 100 cents on the dollar. Seems like he forgot his own one good idea.

Footnote: I like the way the WSJ spells "Treasurys," but my spellchecker does not.