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Lou Simpson passes at age 85

rogermunibond

By rogermunibond
in Berkshire Hathaway

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oscarazocar Contributor

oscarazocar

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For anyone looking for good stuff on Simpson, there is a chapter on him in The Warren Buffett CEO by Robert Miles, which came out in 2003.  I read this book a long time ago but recall it being quite good with chapters on many of the important managers of the 1980's/1990's: Nicely, Jain, Simpson, etc.

 

https://www.amazon.com/Warren-Buffett-CEO-Berkshire-Hathaway/dp/0471430455

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VersaillesinNY Apprentice

VersaillesinNY

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RIP Mr Lou Simpson.

 

Some insight on Lou Simpson and how he works

From Concentrated Investing: Strategies of the World's Greatest Concentrated Value Investors:

 

Buffett has described Simpson as having “the rare combination of temperamental and intellectual characteristics that produce outstanding long-term investment performance.” In particular, Buffett admired Simpson’s ability to invest in stocks with below-average risk, and yet generate returns that were the best in the insurance industry, a hallmark of Buffett’s. Simpson’s investing for GEICO often paralleled Buffett’s efforts at Berkshire. And students of Buffett’s style will recognize his influence in Simpson’s process: seek undervalued businesses with proven track records, strong management, a high likelihood of continued steady growth, pricing power, financial strength, and a history of rewarding shareholders. “He has this great ability to understand what’s going to be a good business,” said Glenn Greenberg, a longtime friend who is now managing partner at Brave Warrior Capital Management. (Simpson considers Glenn an excellent investor and they have ended up owning the same stocks numerous times over the past 30 years.) “And it’s concentrated because there aren’t that many really good businesses.” 

Simpson has an unassuming manner and puts people at ease. He has a wide circle of acquaintances, which assists in gaining insights into companies and industries he is researching. He is also a master of understatement, so much so that in conversation the import of his observations aren’t understood until long after the discussion is over. Like the man, Simpson’s office is unassuming. It is situated in a low-key, nondescript office building in Naples, Florida, an 8- to 10-minute drive from his home. A passerby would have no clue about the business being transacted in it. It is also unusually quiet. He says that he has always tried to block out as much noise as possible. There are no interruptions; no ringing phones, no Bloomberg in the office—Simpson keeps it in the entranceway, separate from the office, so that he has to stand up from his desk to look something up if he needs it. “If I have the Bloomberg on, I find I am looking at what the market is doing,” he said. “I really like to be the one who is parsing the information, rather than having a lot of irrelevant information thrown at me.” His desk, like the rest of his office, kitchen, and meeting rooms, is clutter free. 

His work life is similarly low key. He is disciplined about exercising before work, and arrives at his office long before market hours. Simpson reads everything he can find about companies that have caught his eye. He doesn’t search for investments in analyst reports, or by speaking to sell-side researchers.

 

 

lou-simpson-1987-profile.pdf

A Maestro of Investments in the Style of Buffett - The New York Times.pdf

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Xerxes Grand Master

Xerxes

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22 hours ago, CorpRaider said:

Pretty good chapter on him in Concentrated Investing by Tobias Carlisle, et. al. (having read virtually nothing substantive about him prior to this book).

Would you recommend that book ?

Looks a bit pricy. I like the topic, but not if it is a re-hash of Buffett buying American Express or Coke etc.

 

 

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CorpRaider Mentor

CorpRaider

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I think I read it in like 2017 so I'm hazy, but I probably wouldn't pay up for it, especially if you've read much about Glenn Greenberg and Lou Simpson (I think Greenberg and Simpson were the two chapters where I had not previously encountered much of the info, there's an interesting Ed Thorp/Claude Shannon Kelly Formula discussion but the Thorp. stuff has been well covered in other sources now; including his auto-bio). 

 

I do remember getting new stuff from the Simpson and Greenberg chapters (and there was a chapter on this Norwegian offshore drilling billionaire guy, Siem that was interesting, but IDK how useful it was).  I think there are 2 chapters on Buffett and Munger which will be a rehash to most on here.  If memory serves there's a Keynes chapter (his investing career was covered in more detail in a couple of dedicated books).  There was one on Buffett's friend who ran the Grinnell college fund...I think. 

 

If you like Toby's books, I do think he once said it was his low key favorite.  I enjoyed it, but I would probably wait for a kindle sale or something.  If you haven't read the Thorp and Keynes books, and are interested in like a survey, it may be more attractive.

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