Lou Simpson Quotes
102 Lou Simpson Quotes
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[On not believing that someone can simply be taught how to be a successful investor.] I think it’s an art. There’s a lot of psychology and emotion involved. A lot of people don’t have the patience or temperament to really be investors.
Lou Simpson
The average investor is not properly equipped to be successful.
Lou Simpson
[On advice to someone wanting to get into investment management.] I’d advise you to associate yourself early in your career with really good people, people who have integrity and confidence, people you can learn from. And not to be too short-term oriented.
Lou Simpson
One of the things I’ve learned, is that you cannot will the market to do what you want it to do. But, over time, the market is ultimately rational, or at least somewhat rational.
Lou Simpson
When I first met him [Warren Buffett], one of the things he suggested to me was to think of investing as a situation in which you are given a fare card with 20 punches. You can only make 20 investment moves, and at the end of those 20 moves you have to stay with what you have. Thinking of it that way really helps, because it focuses you on being very careful and having a lot of conviction about whatever changes you want to make.
Lou Simpson
In general, people are just churning their portfolios. Ben Graham once told me that the way a lot of individuals and institutional investors invest reminded him of people who traded their dirty laundry with each other. They were just trading for the sake of trading, and they didn’t really own businesses. Investors are going to make out a whole lot better if their whole emphasis is on owning businesses and having a reasonable time horizon.
Lou Simpson
[In 2001 at the age of 64.] I really like what I’m doing. We have a very good, compatible, small group that works well together, and the surroundings couldn’t be nicer. I don’t know what I’d do with myself if I retired.
Lou Simpson
[On succession plans for his role at GEICO.] I don’t think it’s the kind of business where you build a succession of management. We have a collegial environment where we’re working together, and I’d like to continue to do that into the indefinite future.
Lou Simpson
[In 2001] GEICO is probably the future of automobile insurance. Insurance is going to be more and more direct response, probably more and more the internet.
Lou Simpson
[In 2001] As long as Warren [Buffett] remains mentally sharp – and he’s as sharp now as when I first met him over 20 years ago – he’s going to continue doing what he’s doing.
Lou Simpson
[In 2001] There are no secrets – or surprises, in the way we do things. We are all very clear on what we’re trying to do. We have a very good approach. It’s just a question of doing it. Of course, the implementation of our approach is not easy. We know that we’re in a long race, but we’re convinced that our approach will work.
Lou Simpson
Invest in value stocks. Invest in what others don’t know and are uncovered by research and independent thought.
Lou Simpson
Pay a reasonable price, even for an excellent business.
Lou Simpson
Invest for the long-term.
Lou Simpson
Do not diversify excessively.
Lou Simpson
[In 1983 on GEICO being unable to invest its cash profitably and deciding to return the money to its shareholders by offering to repurchase shares.] Either our standards are too high or the price we’re willing to pay [for acquisitions] is too low.
Lou Simpson
[On Charlie Munger] Charlie thinks outside of the box. He thinks quite differently and this leads him to some interesting conclusions. He has the ability to zero in on things that are really crucial to making good decisions. Charlie will give lots of negatives, but [he and Warren Buffett] finally come up with a similar conclusion.
Lou Simpson
[On Charlie Munger serving on the Salomon Board in his late 60’s] Health and age do not slow Charlie [Munger] down at all. He got off the plane (from Los Angeles) and came directly to Salomon meetings and was sharp as a tack. The Salomon meeting was an afternoon meeting, then another meeting the next morning, then the next day Charlie was on his way home. A lot of the time we would all stay at the Millennium on the West side. We’d have a board dinner, and walk back.
Lou Simpson
There was not a lot of socializing at Solomon. It was pretty businesslike. There were lots of problems and considerations we had to deal with. A dramatic time in everyone’s life. I’m sure Warren [Buffett] and Charlie [Munger] got a lot more than they bargained for.
Lou Simpson
[On Charlie Munger during Salomon times.] He was a very active, questioning member.
Lou Simpson
The audit committee at Salomon was pro-active, a probing group of people. We had three-hour meetings at least. Charlie [Munger], to a lot of people in management, was a pain in the rear. He seized on tough issues and came back to them. There were a lot of issues that were difficult – accounting, management, derivatives, risks involved. You want in a group of people someone who points out that the emperor has no clothes. Management will present the positive side. It’s harder to get people who will point out the pitfalls, risks, and so on. I suspect people thought Charlie [Munger] was a crank. Things would be going well, then he’d say – ‘But you’ve got this issue of off-the-balance-sheet items. And commissions.’ To understand the operations of a business is exhausting, very intense. I remember many many flights between here and Los Angeles, five to six hour flights. He [Charlie Munger] spent the whole time reading and re-reading audit material. He added a lot of value in just questioning practices and the way to think about these practices.
Lou Simpson
We know that we’re in a long race…
Lou Simpson
Bonus:
[In 1982 on Lou Simpson.] The best investment manager in the property-casualty business.
Warren Buffett
[In 1986 on Lou Simpson] Indeed, it’s a little embarrassing for me, the fellow responsible for investments at Berkshire, to chronicle Lou’s performance. Only my ownership of a controlling block of Berkshire stock makes me secure enough to show how successful Simpson is.
Warren Buffett
[On Lou Simpson.] Lou has made me a lot of money.
Warren Buffett
[On Lou Simpson] He sticks to his principles. Most people on Wall Street don’t have principles to begin with. And if they have them, they don’t stick to them.
Warren Buffett
[On Lou Simpson in 2004] Lou Simpson manages about $2.5 billion of equities that are held by GEICO, and it is his transactions that Berkshire is usually reporting. Customarily his purchases are in the $200-$300 million range and are in companies that are smaller than the ones I focus on.
Warren Buffett
[On Lou Simpson in 2004] You may be surprised to learn that Lou does not necessarily inform me about what he is doing. When Charlie [Munger] and I assign responsibility, we truly hand over the baton – and we give it to Lou just as we do to our operating managers. Therefore, I typically learn of Lou’s transactions about ten days after the end of each month. Sometimes, it should be added, I silently disagree with his decisions. But he’s usually right.
Warren Buffett
[On telling the then Chairman of GEICO John J Byrne Jr who asked him for an opinion on the candidates for their new chief investment officer when Warren Buffett owned 30 percent of GEICO. He had agreed to have all four of the final candidates visit Warren Buffett. But after Lou Simpson was leaving his office he called Byrne to say:] Stop the search. That’s the guy.
Warren Buffett
[On Lou Simpson] Temperament is what causes smart people not to function well. His temperament probably isn’t different to mine. We both tend to do rational things. Our emotions don’t get in the way of our intellect.
Warren Buffett
[On Lou Simpson] I would argue that good stock-picking records are held by people who are a little cranky and are willing to bet against the herd. Lou just has that mind-set and that’s what impressed us.
Charlie Munger
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