Geoff and I chatted about some investors. He asked me what is the first word that comes to my mind when I hear the name of an investor. Although I know little about most investors, here are my answers.
#1 Warren Buffett: Focus
This is the word Warren Buffett uses to describe himself when asked about the key to his success. He focused moe on making money than most people. A lot more than Ben Graham or Charlie Munger. Focus is also a good word to describe Buffett's investment style. He only makes big investments on big ideas. And at some times he concentrated his investment on an industry like media & advertising in the 70s or consumer products in the 80s.
#2 Charlie Munger: Smart
I thought he’s the smartest person I knew after reading Poor Charlie’s Almanack. I like his ideas about a multi-disciplinary approach. And I like the way he waits and bets big when opportunities appear. I agree with him that diversification is to protect against ignorance. People may think he’s arrogant. I think he has earned the right to be arrogant.
#3 Ben Graham: Lazy
Actually Ben Graham did a lot of things. He wrote a Broadway play. He read French novels. He recited Spanish poets. Investing was just one of his interests. By lazy, I mean he didn’t focus on investing as much as Warren Buffett. He wanted to find a safe system for investing. But that doesn’t mean he’s not good. He’s great. He knows where to apply his system.
#4 Phil Fisher: Conviction
For all his life, Phil Fisher followed what he believed. He wanted to find companies with the capabilities to constantly find new products/services for growth. And when he believed he found the right company, he never sold.
#5 Tom Russo: Long-Term
I like his investment style. He learned to buy and hold the stocks that he understood best after listening to Warren Buffett’s talk to his Stanford business school class in 1980. He mainly focuses on food and beverage companies. And he holds for very long time. He bought one of his favorites, Nestle, in 1987. And he still owns it today.
#6 David Einhorn: Noisy
I think he’s smart. He has made great returns without following a clear investment style. But I think he spends too much time doing interviews and giving speeches at conferences. If I were his client, I would like him to spend more time on his job. Having a high profile is not good for investors. And sometimes inconsistency-avoidance tendency might keep him from correcting some positions that he previously talked about.
#7 Seth Klarman: Mysterious
In contrast to David Einhorn, Seth Klarman keeps a very low profile. I saw some stocks he bought but they are just a very small part of his portfolio. So, I have no clue about the secret of his great returns. I think I would have to see the bonds he owns. So, mysterious is the first word that comes to mind when I think about Seth Klarman.
#8 Jim Chanos – Cautious
In The Smartest Guy in The Room, it was mentioned that when Jim Chanos was at college, he only bought blue chip companies. He later became a short seller. I think he usually shorts and waits for companies to go bankrupt. I think he’s a cautious person.
#9 Peter Lynch – Simple
Peter Lynch likes simple businesses. The way he explains his ideas is so simple. He usually does two minutes drills. I like him.
#10 Joel Greenblatt – Tricky
Tricky is what I felt about him when I read You Can Be a Stock Market Genius. I was so excited when reading his approach to special situations that I believed I could make 50% returns a year. Now I don’t.
#11 Michael Burry – Self-Study
Michael Burry is my hero. Not because of his courage to think independently but because of his similarity to me. He studied at medical school but then switched to investing. Before becoming a money manager, he even applied to law school. I studied physics, then computer programming, and then math before coming to value investing. When he was under pressure from investors because of his short position, he learned everything about guitar. Similarly, my personal interest is tennis and I read about physics of tennis, customize my racket, learn the tactics, and watch old matches to analyze. In-depth self-study is something I have in common with Michael Burry. So I think Michael Burry is a much better version of me.
#12 Bill Ackman – Activist
I think he’s great. He has high conviction and keeps a concentrated portfolio. But I don’t know much about him. The first word that came to my mind was “activist.”
#13 Walter Schloss – Independent
As everybody knows, he worked with his son in a small office. He never talked to financial analysts. Warren Buffett said no one could influence him. He had a really good, really long-term record.
#14 Marty Whitman – Dislike
I don’t mean I hate him. It’s just that I read his book The Aggressive Conservative Investor. I don’t like his ideas. So I didn’t learn more about his investment style. He thinks about margin of safety in terms of private owner value. I think about margin of safety in terms of reliable future earning power.
#15 Bruce Berkowitz – Financial
I like an investor with the courage to go against the crowd like Bruce Berkowitz. I don’t know anything about financial services companies. I don’t think I will ever invest in that area. If I want to invest in financial services, I’ll just buy Fairholme instead.
#16 Whitney Tilson – Handsome
He is part of T2 partners with Glenn Tongue. Tilson does a lot of interviews. I think he’s a good marketer. I’m not sure which of the two “Ts” makes most of the decisions.
#17 Glenn Greenberg – Qualitative
He wants to buy a good business. Sometimes he compromises on price to get a good business. I don’t know much more about him. But Geoff says that if I did know more, Glenn Greenberg would be my favorite investor.