Tomorrow I will post an analysis of two contrasting, yet attractive businesses, Lone Star Steakhouse (STAR) and Outback Steakhouse (OSI). Originally, I was going to emphasize Lone Star, but when I looked at its biggest and most well-known direct competitor, I realized that the contrast tells a great story about the Quality/Price tradeoff. So...I need a little more time.
Tonight I want to show you all who my investing "role models" are. I have drawn a lot of my principles from them (see my first post for specifics), and you could do a lot worse than to give each of them a piece of your money a forget about it for 20 years.
Lets get the obvious ones out of the way first: Buffett, Munger, Graham, Dodd, Lynch.
Mutual Fund Managers: Most manage "value" funds, but each manager operates in different ways. Surprisingly, there is very little overlap between their portfolios.
Clipper Fund (James Gipson) - Buys good businesses at less than 70% of intrinsic value.
Third Avenue Funds (Marty Whitman) - Very non-traditional manager that everybody can learn a lot from. Looks for hidden assets and tax-deferred capital growth. Writes very dense, hard to read but insightful letters.
Legg Mason Value Trust (Bill Miller) - Almost as idiosyncratic as Whitman. Owned Dell in the 1990's, owns Amazon today. Beat S&P every year for over a decade.
Tweedy, Browne - Founder was Warren Buffett's broker. Very good at finding international values. Very open with their philosophy. Excellent website with a number of great papers (Hint: read them all!)
Aegis Value Fund (Scott Barbee) - Deep, deep small-cap value. Traditional Ben Graham. Only buys for less than tangible book or less than 7x earnings. Tremendous record. Read the seven page "investing philsophy" section. You will learn a lot.
Dodge & Cox - Good at stocks and bonds. Both their stock and their balanced fund beat the S&P over the last 10 years.
Weitz Funds - Wally Weitz is my hero - we both have tons of plaid shirts! Warren Buffett sits in the first row of his shareholder meetings.
Sequoia Fund (Bill Ruane) - When Warren Buffett closed up shop in 1972 (he couldn't find anything to buy) he turned over his investors to Bill, who put them in the Sequoia Fund. He didn't disappoint them! Extremely concentrated portfolio of fantastic companies.
Hedge Funds/Advisors: High net-worth only, but have transparent philosophies and excellent records.
Whitney Tilson - Also writes a regular column for the Motley Fool. His website has all of his old articles, plus some links to hard to find documents. Great guy - lots of integrity.
Claire Barnes - Runs Apollo Investment Management, an offshore fund that invests in Asia. She operates out of Malaysia. Pure Benjamin Graham. Her track record is astounding, and she writes good letters.
Kahn Brothers - Founder took Ben Graham's Security Analysis class and did quite well for himself. His family continues to run the firm in the same way.
Philip Fisher - Author of Common Stocks and Uncommon Profits. His son Ken runs his advisory firm, but with a different style.
Ed Seykota - Not a value investor! He trades commodities. His website is a very useful place to sort out psychological issues. Greatest track record I have ever heard - 65% compounded return for 15 years! Featured in a great book called Market Wizards.
Van Tharp - Another holdover from my dark days of commodity trading! Psychologist who coaches traders. Biggest key insight - The "Holy Grail" trading/investing system is the one that fits you.
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