Tom Russo: I came upon value investing at the Stanford Business School in the early 1980s when Berkshire chairman, CEO Warren Buffett came to our class and it was a class taught by Jack McDonald, who is a lone voice in Palo Alto towards thinking about investing as though you are acquiring pieces of companies and then assessing whether you think that the company had competitive advantage that would endure and then coupling those two discoveries into the process of investing regardless of the environmental concerns or academic principles that might be in contradiction to the bold assertion that one might just identify a company with superior economics and a strong culture that could pose the investment for the lifetime of the investor.
The man who spoke at Professor McDonald’s class, Warren Buffett, is the reason I think why today, people like me have the ability to presume that they have the trust of investors to attempt to invest for the long haul. He did it and has a lifetime of success to prove that it’s possible to consider great businesses, great managements and then align your investor interest alongside of them for the very longest term with disregard to the tools in modern finance, which have the academic imperator behind them. Buffett stands in contrast to that. It is because he has existed that people like myself and other value investors are able to say that we too would try to like to identify similar businesses, maybe in different industries than what Warren’s focused on or different geographies. I chose early on the international markets as a result of the same course where Warren spoke in that the professor, Jack McDonald, to the class in the 1980s—early 1980s—said, “Don’t be provincial. Look abroad” and that spelled a huge difference for me as I’ve been going through my career with that idea.