Wednesday, June 4, 2008

Randolph McDuff may be the best stock picker the world has never heard of

From Forbes:

"Discipline" and "patience" are probably the two most valuable words in value investing. It stands to reason, then, that few places would serve as better incubators for a value investor than The Pas, in Manitoba. Close to polar bear country, where Hudson Bay winds chill the air to 40 degrees below zero and the wait for spring lasts eight months, The Pas is the hometown of Randolph McDuff, a stock picker with an astounding record.

Since McDuff began running his RMG ValueCatalyst small-company fund eight years ago, he has earned a compound annual return of 36.4%. Not a single diversified stock fund in Lipper Analytical's universe of 1,555 mutual funds can match that. Ken Heebner's CGM Focus Fund comes closest at 32.2% a year over the same period. McDuff's RMG Value Oriented Growth, which buys large companies like Bayer and Fresenius Medical, comes in third at 25.5%. Warren Buffett's Berkshire Hathaway has returned a compound annual 11% over that period; the s&p 500, 1.1% (including dividends).

What's McDuff's secret? "The [securities] industry rewards analysts for boring, homogenous work and penalizes those who provide truly insightful views," he says. "I typically own companies the industry doesn't cover, covers poorly or covers with largely plagiarized reports.">>>MORE

HT: Infectious Greed who in the same post directs us to the wisdom of J.R. Simplot.
From Esquire:
What I've Learned: J.R. Simplot
Potato magnate, cattle magnate, fertilizer magnate, semiconductor magnate, billionaire; 92; Boise, Idaho

You want a potato big enough to get a long fry.

Work honestly and build, build, build. That's all I can tell you.

Luck is facts, and it's facts that make luck.

I don't give a goddamn: You get a wind blowing away from a dairy, you're going to get some smell.

Put bets down on the right people and give them responsibility.

I started Micron Technology. That was my baby. I put the first million dollars in it and owned 40 percent of it. And it's been a howling success. We cover the world now. We will build the memory for the world, period.

Get a little equity....MORE