Lou Simpson is largely unknown, even among investors. Yet, he quietly racked up a track record that bested the S&P 500 by 6.8%.
In 1979, GEICO was looking for someone to run its investment portfolio. Part of the hiring process included an interview with some guy named Warren Buffett. After four hours with Simpson, Buffett told GEICO’s CEO to hire the guy.
He would produce a 20.3% return (vs the S&P 500’s 13.5%) for GEICO over the next 25 years! Upon his retirement in 2010, Buffett stated in Berkshire’s 2010 letter, “Simply put, Lou is one of the investment greats.”
Simpson’s philosophy is similar to Buffett’s and Philip Fisher’s. It revolves around a few main tenants and is best described as concentrated, long-term bets in great businesses with great management at reasonable prices. It’s an approach that is easier said than done.
Thanks to a few rare interviews over the years, he’s expanded on those ideas. Continue Reading…