Tuesday, 2 April 2013

An Interview with Jim Tisch and Joe Rosenberg of Loews

Loews is a publically traded investment holding company, one that is often likened to Berkshire Hathaway and Leucadia National.  The company has been operating for over 50 years, and has been controlled by the Tisch family.  The excellent Graham and Doddsville newsletter, published by the business school at Columbia University, recently interviewed Loews CEO Jim Tisch and Chief Investment Strategist Joe Rosenberg.

Tisch recounts two investments that lead to excellent returns, one involving buying ships used to transport oil during the OPEC price spikes in the 1970s, the other having to do with offshore oil drilling, back when it was an up-and-coming business.  He has other interesting things to say, including the necessity to treat minority shareholders well even when holding a controlling majority.  After all, when you hold a permanent, say, 60% of a company, neither buying nor selling any shares, the only price appreciation that will come happens among minority shareholders.  If they are treated poorly by the controlling owner, they will sell the stock, decreasing the price.  In addition, he discusses the culture, organizational structure, decision making process and day-to-day habits at Loews; the pros and cons of holding permanent capital; and his preference for US-based companies.

Joe Rosenberg recounts the airline industry in the early 1960s, a rare period of rising profits and stocks (yes, "airlines" and "profits" appear together in the same sentence); he explains how he uses research on riots to help understand the psychology of the market, citing The True Believer: Thoughts on the History of Mass Movements, by Eric Hoffer; and his contention that financial history, and indeed history in general, is not given due attention in business schools.

As usual, the Graham & Doddsville letter lands a superb pair of investors as interviewees, offering very useful information to readers.

Source is here

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