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Are these the new Warren Buffetts?


Guest hellsten
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Guest hellsten

Are these the new Warren Buffetts? The story is from the October 30, 1989 issue of Fortune:

http://management.fortune.cnn.com/2012/11/21/new-warren-buffetts/

 

1. Michael Price

 

''I like cheap stocks,'' says Price. ''I'm basically a guy who looks at a company's balance sheet and asks, 'What is the company worth? Give me a number.' If the answer is, 'Substantially more than the price,' then I get interested.''

 

2. Randy Updyke

 

He combines the teachings of Benjamin Graham with those of Sigmund Freud. ''I like to buy things for a lot less than I think they are worth,'' he says. ''But to me the psychology and mood of the market are more important than anything.''

 

Is this the guy behind OID?

 

3. Glenn Greenberg & John Shapiro

 

Glenn's track record was very good until 2008:

http://gregspeicher.com/?p=1083

 

4. Seth Klarman

 

I focus on what could go wrong. Before buying, we always ask ourselves, 'What would we pay to own this company forever?

 

5. Thomas Sweeney

 

His favorite pattern? ''People always panic,'' he says. ''If you study this phenomenon over time, you see that eight times out of ten you make money by buying into a panic.''

 

Looks like he's no longer a fund manager:

http://articles.baltimoresun.com/1996-04-21/business/1996112005_1_mutual-fund-fidelity-fund-investors

 

6. Jim Chanos

 

7. Karen & Jim Cramer

 

8. Edward Lampert

 

Arbitrage helps our value investing. If we can earn 20% to 25% annualized returns in arbitrage, then for the long term we can buy only stocks that we think will earn comparable rates of return. Conversely, if deal stocks get overpriced, we will begin investing in companies with good long-term prospects at low prices.

 

9. John Constable

 

Seems to be working for Constable Partners today.

 

10. Richard Perry

 

Perry Capital founder:

http://en.wikipedia.org/wiki/Richard_C._Perry

 

-----

 

The list is further proof that the answer to headlines ending with a question mark is "no". Seth Klarman has a good track record, but he owns a hedge fund and is not building a company like BRK. Eddie Lampert might have 30 years of compounding left and could build SHLD into something similar, but I wouldn't bet on it. He's very different from Warren:

http://www.forbes.com/sites/morganbrennan/2012/03/05/billionaire-eddie-lampert-buying-record-breaking-40-million-indian-creek-home/

 

Who do you think have the potential to become the next Warren Buffett (and Charlie Munger)?

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If we're going to include people's personal spending, their investing style, and their willingnes to follow Buffett into his worst mistake (Berkshire Hathaway)... then nobody.  I think a lot of people will be great investors in the future and maybe beat WEB's record. I'd assume they have their own investment strategy, which may or may not be 'value' investing.

 

I look up to WEB, especially in terms of his character.  I doubt anyone will be able to live up to his standards.

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Guest longinvestor

Wow, so Jim Cramer is an actual, real life, honest to god investor with a strong track record. I had no idea about that really.

 

lol +1.

 

Good idea to wait for another 20-30 years to identify the next Buffett. The dried flowers and weeds will be shed by then!

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Wow, so Jim Cramer is an actual, real life, honest to god investor with a strong track record. I had no idea about that really.

 

It was his wife that was the real talent there.  He used to call her the "Trading Goddess".  But yes, before Cramer became Cramer and became a caricature of god knows what, he was a successful hedgie.

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Wow, so Jim Cramer is an actual, real life, honest to god investor with a strong track record. I had no idea about that really.

 

His wife was the reason for a majority of his track record (as detailed in his book 'Confessions of a Street Addict').

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If we're going to include people's personal spending, their investing style, and their willingnes to follow Buffett into his worst mistake (Berkshire Hathaway)... then nobody.  I think a lot of people will be great investors in the future and maybe beat WEB's record. I'd assume they have their own investment strategy, which may or may not be 'value' investing.

 

I look up to WEB, especially in terms of his character.  I doubt anyone will be able to live up to his standards.

 

MKL's culture seems to be nearly identical to BRK's.  I don't think Gayner is in the same league as Buffet investing wise, but I think the company is set up to deliver more than satisfactory results.

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I've read "Trading with the Enemy" (Nicholas Maier) by somebody who used to work with Jim Cramer (as well as Cramer's books).  Maybe the truth is that:

 

A- Yes, his wife did teach Cramer sleazy hedge fund tactics that she learned from working for Michael Steinhart.

B- The fund did well even after his wife stopped working for it.

C- He loves his wife.  In Confessions, he comes across as somebody who was smitten by her and thinks highly of her.

D- They fight in front of their employees.  (from Trading with the Enemy)

 

When Jim Cramer ran his hedge fund, he engaged in a lot of tactics that would (most of the time) generate good short-term performance.  Unlike most/all famous value investors, he did not have a string of three bad years.

- Generate a lot of commissions for brokers.

- Get them to tell you when their clients were doing dopey trading.

- Scream at brokers to make the analysts pump a stock for you as you are trying to sell it.

- Get journalists to spread good/bad news about your stock. 

- Talk to the CEO and CFOs of companies.  They may give off tells about how their company is doing (through their body language) and whether or not they are competent at their jobs.  If the CFO is clueless, you might short the stock.

- IPO spinning

- Gaming the way the investment bank analyst system works.  You buy stocks that have no/little coverage.  You hope that analysts will start covering your stock because it is in a hot field and/or the company is likely to generate investment banking business.

 

I think he had a small portion of his hedge fund portfolio in value-esque positions.  The problem with value investing is that his hedge fund clients were human beings who had trouble with short-term losses.  The other problem is that Cramer spent most of his time on short-term trading strategies and likely never had a lot of time to devote to value investing.

But he's not much of a value investor anyways because he recommends trading/flipping stocks in his books and on TV.

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The list is further proof that the answer to headlines ending with a question mark is "no". Seth Klarman has a good track record, but he owns a hedge fund and is not building a company like BRK. Eddie Lampert might have 30 years of compounding left and could build SHLD into something similar, but I wouldn't bet on it. He's very different from Warren:

http://www.forbes.com/sites/morganbrennan/2012/03/05/billionaire-eddie-lampert-buying-record-breaking-40-million-indian-creek-home/

 

Who do you think have the potential to become the next Warren Buffett (and Charlie Munger)?

 

I thought the list wasn't about building another BRK, but compounding money at high rates over time.  Klarman has been phenomenal at this and has done so with much less risk than anyone else.  I think of him as the best security analyst ever and Buffet as the best business analyst ever. 

 

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Without describing why I know this, in order to be in the article , the question was asked:Who would you give your money to if you die  and wanted your spouses's future finances to be safe yet profitable?

The top ten in terms of votes made the article, and several in the article actually voted for others in the article without knowing it. Cramer's selection was considered a surprise.

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