NEW YORK (FORTUNE Magazine) - With talent fleeing and conflict roiling the firm, Morgan Stanley's board brought back John Mack last summer to restore calm.

So his top priority must be to resolve the long-festering culture clash -- dating from the 1997 Morgan–Dean Witter merger -- that contributed to the downfall of predecessor Phil Purcell.

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He also needs to revive several important operations, including a stagnant Discover card business, a disappointing brokerage arm, and a lagging asset-management unit.

Mack has plans to grow just about all aspects of the business: private equity, derivatives, emerging markets. A rumored deal to buy a controlling stake in $450 billion bond-fund manager BlackRock would be an important addition to Morgan's lineup, provided Mack doesn't overpay.

Morgan Stanley (Research) shares are up almost 15 percent since Mack's return. They're not likely to rise fast from here. Mack's ambitious plans will be costly, requiring major restructuring charges and spending on acquisitions.

And it could take two or more years to see results. We'd avoid the stock for now. If you believe in that old Mack magic, wait for a dip, buy, and be prepared to hold on.