Value investing was founded in 1920 by Benjamin Graham and David Dodd, both professors at Columbia Business School. After 18 business cycles, their investment philosophy still has as many advocates today as it did almost a century ago. (For more, see: Value Investing: What Is Value Investing?) Here is a look at six leading female professionals who apply a value approach to their investment and business strategies.
1. Mariko Gordon
A graduate of Princeton in comparative literature, Gordon’s first move into investment was as a buy-side portfolio manager's apprentice at Manning & Napier in New York. During this time she took every night course possible on finance. She later moved to Royce & Associates, where she remembers her boss changing his growth-oriented strategy towards a value approach after the crash of 1987 (“I will never forget watching him stand calmly by the trader’s desk buying stocks hand over fist in the crash of `87," she wrote for her website's biography page.)
In 1995, Gordon founded Daruma Capital Management, LLC. Starting with zero assets under management, Daruma now holds $2.1 billion in assets. She has mastered her personal strategy of selecting no more than 35 small-cap holdings in her portfolio, which is distinctive from others in the small-cap arena that tend to diversify more extensively, due to the nature of this type of stock. According to an interview with "Value Walk," Gordon's investment philosophy is to identify firms undergoing a positive fundamental change. "Thrift, fearlessness, resilience, hard work, intellectual curiosity and an ability to take and avoid risk are in my blood - a perfect pedigree for a money manager," she wrote.
2. Irene Bergman
A Wall Street veteran who recently turned 100 years old, Irene Bergman is among the oldest professionals working in the investment industry.
It was her dream as a teenager to become a private banker on the Berlin Stock Exchange. Instead, the onset of World War II caused her Jewish family to flee Germany for, at first, Holland and then in 1942, the U.S., where she worked as a bank secretary. Fifteen years later, she got a job with Hallgarten & Co. and in 1973 moved to Stralem & Co., where she remains today.
Living through World War II and the postwar years demonstrated to her the value of protecting funds. It took ten years to recover her family's wealth after being frozen by U.S. and Dutch authorities. Having endured many recessions, depressions and historical events, Bergman's approach to investing has garnered her the loyalty of many clients - she says she has never lost one. Remarking on the current stock market in a recent Bloomberg interview, she noted that “I’m able to get bullish, because when I look at a stock, I can imagine where it was 40 years ago.”
3. Lauren Templeton
Lauren Templeton is the great-niece of Sir John M. Templeton. With her husband, she currently runs the boutique value investing firm Templeton & Phillips Capital Management, LLC, which was founded in 2001 in Chattanooga, Tenn. She and Renee Haugerud (see below) are among the still relatively few women heading up hedge funds throughout the world.
As a child she began investing under the significant influence of her father and great-uncle. She graduated from the University of the South in economics, and first worked professionally in 1998 as a junior associate in the financial advisor Homrich and Berg. Three years later, she started her own hedge fund.
Templeton emphasizes that how you condition yourself to market scares depends on your experience, and she stresses the importance of doing your own research. In an interview with "The Manual of Ideas," she suggested experiencing market volatility hands-on: “You can condition yourself to view market volatility as an opportunity, as opposed to a setback. And the only way to do that is to put money to work in a very scary period and reap the benefits of that.” This will create a positive behavioral feedback loop "that conditions your brain that instead of being fearful of those events, the next time one occurs, you’re going to be anticipating the rewards at the other end.” (For more, see: Value Investing: Finding Undervalued Stocks.) Templeton has a quarterly newsletter that offers extensive research and market insights.
4. Renee Haugerud
With an office in New York, Renee Haugerud runs hedge fund Galtere International (she coined "Galtere," whose root words essentially mean “pragmatic simplicity.") Growing up in Southern Minnesota, she and her father, a farmer and the local sheriff, would work in the family cornfield while her father taught her about supply and demand, “calls” and “puts,” which sparked her interest in trading commodities at an early age. (For more, see: How To Invest In Commodities.)
Haugerud began trading commodities at Cargill, where she attributes much of her investing perspective and experience. She spent 16 years there and at other firms before starting her own fund in 1997. She has described her fund as a “global macro fund that looks through a commodity lens.” Her focus on commodities is based on the idea that “if you look at commodities, they are the oldest currency in the world, they were the first currency in the world, they are the first traded instrument in the world.” Haugerud believes in the long term that commodities will outperform, and that traditional paper products, such as stocks or bonds, will underperform. Her value-oriented perspective is rooted in the belief that well-managed, fiscally-responsible countries that are rich in resources are positioned to do well. In an interview with Barron's in 2010, she posited that agricultural commodities and farmland will have stronger performances than paper products. Under this hypothesis, she believes the market is moving away from patterns seen in the past 30 years.
5. Sarah Ketterer
In the 15 years since Sarah Ketterer founded Los Angeles-based Causeway Capital Management, her assets under management have grown to over $38 billion. Ketterer's unlikely approach combines deep value investing with quantitative analysis. In an interview with Reuters, she said “all of our portfolio managers are focused on global equities. We look for high quality assets with the ability to generate increasing amounts of cash and resilient balance sheets.” Her approach involves having her "number-crunchers" screen over 3,000 global companies each week with over $1 billion in market capitalization before the stock pick is confirmed with the team.
Ketterer is a daughter of value investment royalty: John Hotchkis, who co-founded the Hotchkis & Wiley value investing boutique and the Trust Company of the West. A political science and economics major at Stanford, she later completed her MBA from Dartmouth. After briefly working in corporate finance at Bankers Trust in New York, she became fascinated by data. During a trip to Italy, she had noticed how inefficient local businesses were with data collection. “I remember visiting a company in Italy that made sports equipment, and they were pulling their data out of a drawer, and I was thinking, 'What are they doing? This is not good,'” she said in an interview with "Forbes." This led her to leave Bankers Trust and soon afterwards start her own company, which helped refine and organize European companies' data to sell to investment managers. After she approached Hotchkis & Wiley as a potential client, they instead asked her to head up a new international equity department; she became co-head of the firm's International and Global Value team.
In 2001, Ketterer co-founded Causeway Capital Management, where she continues to see consistent positive annual investment returns.
6. Susan Decker
Susan Decker, 53, is the youngest female director on the Berkshire Hathaway board. The former president of Yahoo! Inc. and entrepreneur-in-residence at Harvard Business School, Decker’s professional course has followed an impressive trajectory.
After graduating with a double major in computer science and economics at Tufts University, Decker worked as an equity analyst on Wall Street at Donaldson, Lufkin & Jenrette. It was here that she was recognized by "Institutional Investor" magazine as a top analyst for ten consecutive years. She moved her way up to lead DLJ's equity research business as global head of research.
After working as an analyst, she moved to become Yahoo!s chief financial officer. “I knew the management team well. And I knew the industry well. So I really did join partly to help them think through strategic issues with respect to the business model,” she said in an interview with "Institutional Investor." As CFO, she emphasized generating deals that would improve cash flow in the long run for the company. She left Yahoo! in 2009 after a nine-year tenure.
Currently, as a chartered financial analyst, she additionally serves on the boards of Costco and Intel.
The Bottom Line
Despite women still accounting for a small percentage of hedge fund managers, CEOs and CFOs, these six have each achieved individually exceptional results within the investment field.