Late last year The Telegraph did a great piece on value investing legend Philip Carret, who Warren Buffett described as one of his hero’s.
After founding his Pioneer Fund in 1928, one year before the great depression, Carret successfully steered his fund consistently upwards through the Great Depression and the Second World War and his career ultimately encompassed a total of 31 bull markets, 30 bear markets and 20 recessions.
Carret was one of the first to write about “value investing” in a series of Barron’s articles in 1927. He developed this concept in his 1930 book The Art of Speculation, where his “12 commandments for speculators” first appeared.
Chris Hohn the founder and manager of TCI Fund Management was the star speaker at this year's London Value Investor Conference, which took place on May 19th. The investor has earned himself a reputation for being one of the world's most successful hedge fund managers over the past few decades. TCI, which stands for The Read More
This is a must read article for all serious value investors that includes Carret’s twelve investing commandments and five of his most famous quotes.
Here's an excerpt from that article:
Inspired by this, in 1928 Carret put his own ideas into action and founded the Pioneer Fund. This spawned Pioneer Investments, now a giant global fund management firm.
Carret’s connections with the Buffetts
Carret first encountered the Buffett family in the Forties when he would visit Warren’s father, Howard Buffett, who ran a small brokerage firm in Omaha, to swap investment ideas.
Later, Warren Buffett’s company, Berkshire Hathaway, became Carret’s most successful investment. He bought shares in the Sixties for less than $400 a time because he was impressed with Buffett’s management. The shares now trade for more than $220,000 each.
Carret was personally invited to Berkshire Hathaway’s annual meetings; nicknamed “Woodstock for capitalists”: these events nowadays attract a vast attendance.
At the 1996 meeting, Buffett said of Carret’s investment style: “The main thing is to find a wonderful business, like Phil Carret always did. He’s one of my heroes, and that’s an approach he’s used.”
One of Mr Buffett’s most famous quotes is “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years”, and it has echoes in Carret’s own approach, outlined in The Art of Speculation: “I have a very simple strategy, I buy good companies at attractive prices. Then I sit on them.”
Both choices chime with Carret’s answer to a question he was once asked in a television interview: “What is the single most important thing that you have learned about investing over the past three quarters of a century?” His reply: “Patience.”
You can read the original article at The Telegraph here.
This article was originally posted by Johnny Hopkins at The Acquirer's Multiple.