Five Times Lucky

Five Times Lucky

Charles D. Ellis | Jan 29, 2022


I was pleased to be invited to lunch by Sandy Gottesman, the much-admired senior partner of First Manhattan and one of Greenwich Associates’ clients. I hoped this would give me an opportunity to get him to adopt our recommendations for the firm’s stockbrokerage business.

As we sat down at his regular table at his club, Sandy said, “We are not going to renew our engagement with you in stockbrokerage this year and I’d like to tell you why. Our research is focused on creative investment ideas, but your research shows that institutions want us to organize around coverage of whole industries. We don’t want to do that. You also show that clients want us to get into block trading, which we also do not want to do. It’s too risky for us.”

I was about to offer Sandy our program on investment management for large corporate pension funds, but he said, “I know you have a great program on big pension funds, but that’s not our market. We focus on smaller funds.”

The conversation was effectively over and our lunch orders hadn’t yet come. To fill the void, I said, “Sandy, thank you for being so open and courteous with me about your decision.” Then, knowing Sandy was a very successful investor, I asked him to share his experiences with great investments.

He replied with one word: “Berkshire.”


I read Ellis’ book about indexing. Didn’t remember he was a Berkshire fan too.

From the article:

Embracing average. My fourth winning experience in investing: not losing the money I had made. I accomplished this by investing in index funds at Vanguard Group. Over the past 20 years, nearly 90% of actively managed stock mutual funds have fallen short of the market averages, often by large amounts. I believe indexing has saved me from considerable grief and losses. Indexing has also saved me time and concern. Other than Berkshire, my investment program is and has been simple: index.

Me too, pretty much.