The Next Buffett
June 24, 2008 5:04 amThe May 2008 issue of MoneySense magazine contained an article entitled “The Next Buffetts”. The article posed the question, “who is the next great Buffett-like investor”? The article then went on to list four potential candidates. On the face of it, a list of four seems like it must be too small a pool of candidates. That is not surprising — this is
MoneySense magazine and is not exactly known for it’s in depth articles. (That is not an insult; they do their job very well, IMO.)
The four candidates were: Prem Watsa, Tim McElvaine, Dr. Michael Burry, and Ian Cumming. Prem Watsa seemed like a good choice but Tim McElvaine seemed like a stretch to me. Another name that could be on that list that popped into my head was Tom Stanley.
Tom Stanley, 53, is the founder and Portfolio Manager of Resolute Funds.
He started the Resolute Growth Fund in 1993 and, in 2006, when he found regulations were making it difficult to run his fund, he closed it and created a private mutual fund, Resolute Performance Fund, in order to avoid disclosure regulations.
Best Call
Resolute Growth Fund produced annual average returns of 29.63% from 1993-2006. The Performance Fund has actually improved on this stellar performance returning an average annual return of 47.09% (as of June 24, 2008).
Worst Call
Results can vary year to year with occasional large drawdowns (30%+). Also, 2007 was a losing year with a loss of 5.1%.
Why He’s Like Buffett
- He eats his own cooking — he is the largest investor in his fund.
- Stanley eschews the crowd (his office is in North Toronto away from Bay Street) and is a contrarian investor.
- Does not believe in diversification; he goes with his best ideas and typically will hold only 10-20 stocks.
- He’s thrifty. Resolute runs a tight ship with only a few employees and a minimalist office with used furniture.
Why He’s Not Like Buffett
- Unlike Buffett, he shuns the media. For such a sterling track record there are very few published media articles.
- He is a fund manager and not a CEO. Although, annual fees are low for this type of investment: 3% MER with no performance fees.
- Stanley does not subscribe to one specific investment style. He is flexible like John Templeton rather than subscribing exclusively to Buffett’s value approach.
For more information on Tom Stanley’s Philosophy consult his site.
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