Joel Greenblatt: Early life and education

Early life and education[edit]

Greenblatt was born in Great Neck, New York. His family was Jewish.^[2] Greenblatt is a graduate of The Wharton School at the University of Pennsylvania, receiving his B.S. in 1979 and M.B.A. in 1980.^[3]

John C. Bogle: Personal life

Personal life[edit]

Bogle and his wife Eve have six children and are grandparents. They reside in Bryn Mawr, Pennsylvania.

At age 31, Bogle suffered from his first of several heart attacks, and at age 38, he was diagnosed with the rare heart disease arrhythmogenic right ventricular dysplasia. He received a heart transplant in 1996 at age 65.^[12][13]

Bogle is a member of the board of trustees at Blair Academy. He is also an advisory board member of the Millstein Center for Corporate Governance and Performance at the Yale School of Management. Bogle received honorary doctorates from Princeton University in 2005 and Villanova University in 2011. Bogle also serves on the board of trustees of the National Constitution Center in Philadelphia, a museum dedicated to the U.S. Constitution. He had previously served as chairman of the board from 1999 through 2007. He was named chairman emeritus in January 2007, when former president George H. W. Bush was named chairman.

John C. Bogle: Investment philosophy[

Investment philosophy[edit]

Bogle's innovative idea was creating the world's first index mutual fund in 1975. Bogle's idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run—thus achieving higher returns with lower costs than the costs associated with actively managed funds.

Bogle's idea of index investing offers a clear yet prominent distinction between investment and speculations. The main difference between investment and speculation lies in the time horizon. Investment is concerned with capturing returns on the long-run with lower risk, while speculation is concerned with achieving returns over a short period of time. Bogle believes this is an important analysis to be taken into account as short-term, risky investments have been flooding the financial markets.^[10]

Bogle is known for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds. He contends that it is folly to attempt to pick actively managed mutual funds and expect their performance to beat a low-cost index fund over a long period of time, after accounting for the fees that actively managed funds charge.^[8]

Bogle argues for an approach to investing defined by simplicity and common sense. Below are his eight basic rules for investors:^[11]

1. Select low-cost funds
2. Consider carefully the added costs of advice
3. Do not overrate past fund performance
4. Use past performance to determine consistency and risk
5. Beware of stars (as in, star mutual fund managers)
6. Beware of asset size
7. Don't own too many funds
8. Buy your fund portfolio - and hold it

Seth Klarman: Publications and works

Publications and works[edit]

Klarman has written many annual letters to shareholders but has kept a limited role in writing articles, opinion editorials or books. In an interview with Charlie Rose, he discussed the popularity of his shareholder's letters and a request on behalf of HarperCollins to write and publish a book on investing.^[42] He followed up on this request by publishing his first and as of February 2017, his only book, Margin of Safety, Risk Averse Investing Strategies for the Thoughtful Investor, a reflection of value investing found in his hedge fund. In the book he outlines the various issues with retail investing, and critiques small time investors getting into the market purely using metrics such as price momentum and losing money in the long run. He issues that this is speculation and at times gambling, and should be discouraged in the market place. The book asserts that more people should become value investors or people who invest in stocks that trade below their underlying value so as to purchase them at a discount.^[43]

The book had amassed a cult following among retail investors, professional and institutional investors as well as Wall Street as a whole.^[44][40][45] Due to "only 5,000 copies [being sold],"^[42] the book has gone out of print and has become a relic in the finance community. Originally the book was priced at $25 a copy, however, due to it being out of print it has a market price of $700 for used versions with newer copies going for $2,500 to $4,000.^[43][1] University libraries report the book as "one of their most wait-listed titles as well as one most claimed as lost."^[43] He has stated that he would be interested in holding a charity event where he bids his book to Wall Street executives.^[42]

He edited the 6th edition of Benjamin Graham and David Dodd's Security Analysis in 2008.^[46][47]

Klarman's published books and substantial writings are listed below:

• Klarman, Seth. Margin of Safety, Risk Averse Investing Strategies for the Thoughtful Investor. HarperCollins.

Seth Klarman: Investment philosophy

Investment philosophy[edit]

Klarman is a known value investor, and has stated that he has known he was one since junior year of college at age 25. During an interview at Harvard Business School, he stated: "It turns out that value investing is something that is in your blood. There are people who just don’t have the patience and discipline to do it, and there are people who do. So it leads me to think it’s genetic."^[15]

When asked what drives his fund's overall investment strategy and how value investing fits into the hedge fund market he replied:

Firstly, Value investing is intellectually elegant. You’re basically buying bargains. It also appeals because all the studies demonstrate that it works. People who chase growth, who chase high fliers, inevitably lose because they paid a premium price. They lose to the people who have more patience and more discipline. Third, it’s easy to talk in the abstract, but in real life you see situations that are just plain mispriced, where an ignored, neglected, or abhorred company may be just as attractive as others in the same industry. In time, the discount will be corrected, and you will have the wind at your back as a holder of the stock.^[15]

Klarman has been an avid supporter of the teachings of Benjamin Graham, and during the 2008 financial crisis criticized the short-term thinking of other fund managers, he believes that the "this-time-is-different" mindset will give a false sense of security to investors and they ought to look at the bigger picture. He stresses the utility in the economy's business cycles and their predestined and perpetual self-corrective tendency.^[15] Klarman is known to sit on 30% to 50% of his funds in cash as to avoid unfavorable market conditions and only buys stocks he thinks have a suitable mispricing.^[7]

He makes unusual investments, buying unpopular assets while they are undervalued, using complex derivatives, and buying put options. During his first years running Baupost he made it a point to only invest in companies that were not widely accepted by the Wall Street community; he stressed managing risk and using the margin of safety.^[7] He is a very conservative investor, and often holds a significant amount of cash in his investment portfolios, sometimes in excess of 50% of the total.^[18]Despite his unconventional strategies, he has consistently achieved high returns.^[19] Klarman looks for companies that are traded at a discount (so he can assume shares with a margin of safety). Klarman and his fund usually go "bargain hunting," when companies are distressed or face low growth or declining years. It was reported by The Boston Globe in 2015 that when energy stocks were declining, his firm "started looking for deals."^[20] According to Institutional Investor, "[Klarman] has succeeded by deftly exploiting under-valued markets whether they are in equities, junk bonds, bankruptcies, foreign bonds or real estate."

Philip Arthur Fisher

Philip Arthur Fisher (September 8, 1907 – March 11, 2004) was an American stock investor best known as the author of Common Stocks and Uncommon Profits, a guide to investing that has remained in print ever since it was first published in 1958.

Career[edit]

Philip Fisher's career began in 1928 when he dropped out of the newly created Stanford Graduate School of Business(later he would return to be one of only three people ever to teach the investment course)^[1] to work as a securities analyst with the Anglo-London Bank in San Francisco. He switched to a stock exchange firm for a short time before starting his own money management company, Fisher & Co., founded in 1931.^[2][3] He managed the company's affairs until his retirement in 1999 at the age of 91, and is reported to have made his clients extraordinary investment gains.^[4]

Although he began some fifty years before the name Silicon Valley became known, he specialized in innovative companies driven by research and development. He practiced long-term investing, and strove to buy great companies at reasonable prices. He was a very private person, giving few interviews, and was very selective about the clients he took on. He was not well-known to the public until he published his first book in 1958.^[5] At this point Fisher's popularity rose dramatically and propelled him to his now legendary status as a pioneer in the field of growth investing.^[6] Morningstar has called him "one of the great investors of all time".^[3] In Common Stocks and Uncommon Profits, Fisher said that the best time to sell a stock was "almost never". His most famous investment was his purchase of Motorola, a company he bought in 1955 when it was a radio manufacturer, and held it until his death.^[7] Phillip is remembered for using and proliferating the "scuttlebutt" or "grape vine" tool, in which he searched fastidiously for information about a company.^[8] When you scuttlebutt, you make more informed decisions due a better basis for analysis and valuation.

In the 2018 Berkshire Hathaway annual shareholders meeting, Warren Buffett called Fisher's "Common stocks and uncommon profits" a "very very good book".^[9] He further described how using Fisher's "scuttlebutt" technique continues to be a good way to investing, which is still used by Ted and Todd at Berkshire Hathaway. John Train described Warren Buffett as 85% influenced by Benjamin Graham and 15% by Philip Fisher.^[10][11]

His son Kenneth L. Fisher also founded an investment firm.