Value Investing

Glenn Greenberg 1992 Barron’s Interview: Portfolio for All Seasons

Glenn Greenberg and John Shapiro are two of the most astute stock pickers to be found this side of Graham and Dodd. They run Chieftain Capital Management, which has some $400 million in assets belonging to affluent individuals, and their trademark is meticulous and cerebral analysis. They beat the market handsomely last year and are doing so again in 1992, even though a paucity of likely-­?looking prospects has left them with an unwonted amount of cash. But they still are high on a number of stocks, and to find out which ones, and why they like them, read on.


BARRON’S: Why don’t we start with your performance?

Shapiro: In 1989 we were up 41%. In 1990 we were down 12%. In 1991 we were up 48%.

Q: And so far this year?

Shapiro: Up about 5%.

Q: Basically you guys are still doing the same kind of thing for the same kind of people.

Shapiro: Yes, we are managing more money now. It has grown to a bit over $400 million.

Q: What did you start with?

Shapiro: Probably just under $50 million, back in 1984.

Q: All of  the increase is appreciation?

Shapiro: Most of it is appreciation. Although we had people that started with us who have given us more money over time. And we have taken on some additional clients. But we have never marketed. We have never tried to raise money. If fact we have turned down most overtures. Including from managers.

Q: You mean other money managers?

Shapiro: Maybe we are taking it the wrong way. But people have come to us as individuals who are on Wall Street and are professionals we admire and have offered us money to manage. We take that as flattering.

Q: It is flattering.

Shapiro: We will also turn down almost every approach, including those from fund-of-fund administrators who would like us to take on money for third parties we don’t know.

Q: Why turn it down?

Shapiro: We prefer organic growth. We don’t want to have anybody else dictate what we do.

Q: So you guys are green investors organic growth.

Shapiro: That is an old European term.

Glenn Greenberg: One of the biggest problems that companies get into sometimes and we’re after all really professional students of companies is because of overly rapid growth. That certainly has been the history in the investment business as well. We feel our skills can grow at a certain rate. But beyond that rate it would be very disruptive.

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