1. Greatest Investors: Introduction
  2. The Greatest Investors: John (Jack) Bogle
  3. The Greatest Investors: Warren Buffett
  4. The Greatest Investors: David Einhorn
  5. The Greatest Investors: Stanley Druckenmiller
  6. The Greatest Investors: David Dreman
  7. The Greatest Investors: Philip Fisher
  8. The Greatest Investors: Benjamin Graham
  9. The Greatest Investors: William H. Gross
  10. The Greatest Investors: Carl Icahn
  11. The Greatest Investors: Jesse L. Livermore
  12. The Greatest Investors: Peter Lynch
  13. The Greatest Investors: Bill Miller
  14. The Greatest Investors: John Neff
  15. The Greatest Investors: William J. O'Neil
  16. The Greatest Investors: Julian Robertson
  17. The Greatest Investors: Thomas Rowe Price, Jr.
  18. The Greatest Investors: James D. Slater
  19. The Greatest Investors: George Soros
  20. The Greatest Investors: Michael Steinhardt
  21. The Greatest Investors: John Templeton
  22. The Greatest Investors: Ralph Wanger

Ralph Wanger

Born: 1933 (Chicago, Illinois)

Key Positions: Harris Associates

Acorn Fund

Wanger Asset Management

Personal History:
Ralph Wanger attended the Massachusetts Institute of Technology for both his bachelor’s and master’s degrees, graduating in 1955. After an early foray into the insurance business, Wanger moved into investments with a position at Chicago’s Harris Associates in 1960. For the next 17 years, he worked as a securities analyst and portfolio manager. In 1977, he assumed the role of portfolio manager and president of the newly-formed Acorn Fund, positions he held until he retired in 2003. Acorn’s annualized return for this period was 16.3%, easily outpacing the S&P 500’s average gains of 12.1%.

Investment Philosophy:
Today, Wanger is perhaps equally well known for his exceptional performance at the helm of the Acorn Fund, which became one of the best-performing small-cap growth funds in the country under Wanger’s leadership, as well as for his humorous and poignant letters to shareholders. He tended to follow a straightforward investment strategy: be a long-term holder of smaller companies with financial strength, exceptional managers, and understandable business models which are likely to benefit from macroeconomic trends. Wanger famously said “if you’re looking for a home run, a great investment for five years or ten years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.”

Wanger preferred to categorize his investments by “theme.” For instance, if he had been around during the California gold rush, he would not have been investing in gold claims, but he would have loved the businesses that sold miners their picks and shovels. The mines played out in a matter of months, but gold diggers kept at it for several years.

It is reported that Wanger was a voracious consumer of investment information. In valuing a company to invest in he looked for the following parameters:

  • A growing market for the company's product or service
  • Evidence of a company's dominant market share
  • Outstanding management
  • An understandable business
  • Evidence of a company's marketing skills
  • A high level of customer service
  • Opportunity for a large stake in the company
  • A strong balance sheet
  • The price must be attractive

Lastly, Wanger said he constantly had to remind himself that you can have a good company but a bad stock.

Noteworthy Publications

  • "Zebra In Lion Country" by Ralph Wanger and Everett Mattlin (1999)

Quotes:

"An attractive investment area must have favorable characteristics that should last five years or longer."

"Chances are, things have changed enough so that whatever made you a success thirty years ago doesn't work anymore. I think that by concentrating on smaller companies, you improve your chances of catching the next wave."

"If you believe you or anyone else has a system that can predict the future of the stock market, the joke is on you."

"Since the Industrial Revolution began, going downstream – investing in businesses that will benefit from new technology rather than investing in the technology companies themselves – has often been the smarter strategy."


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