In a rare interview, great value investor Thomas Russo explains why the ability to say no and the capacity to suffer are key to investment success.
Francisco Garcia Parames At The London Value Investor Conference
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When Baupost, the $30 billion Boston-based hedge fund now managed by Seth Klarman, was founded in 1982, it was launched with a core set of aims. Q4 2021 hedge fund letters, conferences and more Established by Harvard professor William Poorvu and a group of four other founding families, including Klarman, the group aimed to compound Read More
Do brands still matter? In the U.S., the great disruptor known as Amazon is wreaking havoc across a wide swath of consumer brands, products, and retailers. From books to food, to household goods to entertainment, to wine and, with its offer for upscale grocer Whole Foods, traditional bricks and mortar Amazon is making its presence known.
Now one of the world’s most valuable companies, it is hard to believe it went public just two decades ago. Amazon is the biggest online retailer in America with a lot of room to run. Its e-commerce site accounts for about 5% of U.S. retail spending, still half of Walmart’s but catching up fast, and it is capturing over half of all new spending. It is a trend leader. 17% of all retail sales are now done online – more than triple what they were a decade ago.
This week’s guest’s investment specialty is global, consumer brand name companies. He faces two headwinds right now. One is that he is an active manager at a time when investors are overwhelmingly choosing passive and the other is his focus on well established, brand name companies that are under competitive assault from Amazon and others.
We’ll be joined by noted value investor Thomas Russo, who is making a rare television appearance on WEALTHTRACK. He is the Managing Member of the investment advisory firm Gardner Russo & Gardner which he joined as a partner in 1989. He oversees more than $11 billion dollars in separately managed accounts and Semper Vic Partners, a limited partnership. That global value, long-term oriented portfolio has beaten the S&P 500 handily over the last quarter century. Semper Vic underperformed with single digit returns over the last three years however, as domestic U.S. shares gained favor over international ones. So far this year that trend has reversed with Semper Vic up nearly 17% versus the S&P’s 9.3% advance.
Thomas Russo owns a concentrated portfolio of 19 stocks, many of which he has held for years, including his largest position, Berkshire Hathaway and major stakes in Nestle and Philip Morris International.
In a wide ranging discussion we will discuss the popularity of indexing, the Amazon phenomenon, Warren Buffett and Charlie Munger’s changing views of the company, the shakeup at Nestle, and Philip Morris’s “capacity to suffer,” which looks like it is paying off with its new reduced risk product called iQOS.
If you miss the show on Public Television this week, you can watch it at your convenience on our website over the weekend. You’ll also find a web exclusive EXTRA interview with Russo about a charity he has chosen to support on behalf of his investors.
Also, if you would like to take WEALTHTRACK with you on your commute or travels, you can now find the WEALTHTRACK podcast on TuneIn, Stitcher, and SoundCloud, as well as iTunes. Find out more on the WEALTHTRACK Podcast page.
Thank you for watching. Have a great weekend and make the week ahead a profitable and a productive one.
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Russo: Secure Global Transactions
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Thomas Russo from the WEALTHTRACK Archives:
At the end of each year, Portfolio Manager Thomas Russo sends a Season’s Greetings letter to his investors describing one charity he has chosen to support on?behalf of his investors. It’s a gift that doesn’t end with the holiday season. This year’s gift was to African Parks.