Tom Russo

Tom Russo

Last Update: 08-12-2016

Number of Stocks: 105
Number of New Stocks: 4

Total Value: $11,940 Mil
Q/Q Turnover: 1%

Details: Top Buys | Top Sales | Top Holdings  Embed:

Tom Russo Watch

  • Anheuser-Busch, SABMiller Merger Approved by Shareholders

    Anheuser-Busch InBev (NYSE:BUD) won the approval of shareholders for its takeover of SABMiller (LSE:SAB) on Wednesday.

    The $100 billion takeover was approved by an overwhelming majority of shareholders from both companies. The takeover is one of the largest corporate mergers in history and reinforces Anheuser-Busch’s position as a brewing powerhouse.


  • Tom Russo's 1st Quarter Semper Vic Partners Investor Letter

    Tom Russo will be a speaker at the 2017 GuruFocus Value Conference. Don't forget to get a ticket before they sell out



  • Tom Russo Comments on MasterCard

    MasterCard (NYSE:MA) shares have suffered during the first half of 2016 in part as a reaction against all the global disruption ongoing in financial markets and global political corridors. Terrorist bombings throughout Europe slow travel and slow cross-border transactions, the growth of which had over the past decades fueled growth in interconnect revenues. Decline in consumer confidence also pressures revenues and growth in gross dollar volumes billed.

    Finally, MasterCard and other domestic payment networks suffer from concern over the overturning of an agreed settlement with retailers over alleged anticompetitive pricing activities. The repeal of the settlement in the United States coupled with a judicial loss in the United Kingdom in a law suit alleging anticompetitive pricing has triggered concerns over regulatory and legal environment, now weighing on MasterCard’s share price.


  • Tom Russo's 2nd Quarter Semper Vic Partners Investor Letter

    Tom Russo will be a speaker at the 2017 GuruFocus Value Conference. Don't forget to get a ticket here



  • Ruane Cunniff Cuts Allergan, Berkshire, IBM

    Ruane Cunniff (Trades, Portfolio) is a value investor focused on the intrinsic value of business. It manages a portfolio composed of 118 stocks with a total value of $10.499 billion. During the second quarter the guru traded the following stocks.

    The investor reduced shares in Berkshire Hathaway Inc. Class A (BRK.A) by 19.52% with an impact of -2.78% on the portfolio.


  • How to Fish in the Right Ponds

    It’s been widely quoted that in investing, just like in fishing, choosing the right pond to fish in can be more important than the skill and the equipment possessed by the fish man. If you are a skillful fish man with best in class equipment and you choose the right pond, you will have wonderful results. In investing, this is when skill, experiences and circle of competency meet the “strike zone.”

    In the past two years or so, I have noticed a pattern among a few outstanding investors. For instance, Tom Russo (Trades, Portfolio) has historically had an overwhelming overweight to consumer staples; Don Yacktman’s investments have been mainly in consumer staples and entertainment; Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) have historically heavily invested in financials, just like Bruce Berkowitz. One of Vanguard’s most successful funds is the Vanguard Health Care Fund, which has crushed the S&P 500 in any given five-year and 10-year period.


  • Thomas Russo on Global Value Investing

    Tom Russo is a partner at Gardner Russo & Gardner LLC. According to, his company managed to beat the Standard & Poor's 500 index by 4.7 percentage points annually between 1984 and 2011.

    Last year, Russo gave a talk on his value investing philosophy at Google which I’ve posted below. This video was my first exposure to Russo, and I learned a lot. Russo was a student at Stanford University in 1982 when he attended a presentation given by Warren Buffett (Trades, Portfolio). He credits Buffett’s presentation for inspiring him to pursue a career in the investment industry.


  • Dealing With Foreign Currency

    Most value investors are bottom-up. Yes, our focus should be the fundamentals of the business, not the macro economic factors that are less predictable and less controllable. But how far up should we get? Should macro factors be totally ignored? If not, how much attention should we devote to macro factors such as foreign exchange rates?

    Somehow the answer came to me when I was reviewing an article I wrote earlier this year, which discussed how long is long-term. Of course it depends on your holding period; the longer it is the less important macro factors are.


  • Tom Russo's Global Stock Picks

    Tom Russo recently spoke with Bloomberg's radio show "Taking Stock." The guru manages about $10 billion. He likes family-controlled companies because families think long term and don't care as much for quarterly numbers, and also tend to be more conservatively financed. He also likes to invest in companies with high ROE numbers. On the show he touts four stocks, three of which are non U.S. companies.

    Nestlé SA (NSRGY)


  • Altria, Cigna, Philip Morris Are Outperforming the S&P 500

    The following are some of the stocks that outperformed the S&P 500 Index over the last 12 months and have been bought by gurus during the last quarter.

    Altria Group Inc. (MO) has a market cap of $120.66 billion, and during the last 12 months has outperformed the S&P 500 Index by 19.4%. Currently six gurus are holding the company that has returned 9% year-to-date and 146% during the last five years. It is now trading with a P/E ratio of 23 and according to the DCF calculator, it looks overpriced by 115%.


  • Tom Russo on Emerging Markets and Berkshire Share Buy Back

    Tom Russo (Trades, Portfolio), partner at Gardner Russo & Gardner, told Bloomberg yesterday that value investors will make money over time, and it will depend on the ability of the companies in which they've invested to reinvest the money over time. Russo has large positions in Richemont (XSWX:CFR), Pernod (XPAR:RI), Heineken (XAMS:HEIA), which have large exposure to emerging markets. But most of his companies have a long-term outlook and ability to withstand sudden downturns such as China, he said.

    Russo also said he maintains confidence in Warren Buffett (Trades, Portfolio)'s ability to deploy large amounts of capital but he likely lacks opportunity at the present time. He doubts Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) will repurchase shares on their recent slump because Buffett would rather spend the money on buying businesses.


  • Tom Russo Cuts Berkshire, Unilever Stakes

    Tom Russo joined Gardner Russo & Gardner as a partner in 1989. His investment philosophy emphasizes return on invested capital, principally through equity investments. His approach to stock selection stresses two main points: value and price. He manages a portfolio composed of 104 stocks with total value of $11,073 million.

    The following were his largest trades during the third quarter.


  • Why GEICO's Growth Rate Took Off in the Late 1990s

    Over time, I’ve wrote a handful of articles about GEICO. Back in July, I discussed Berkshire Hathaway’s (BRK.B) sizable investments in GEICO in 1976 and 1980 (it accounted for nearly 25% of Berkshire’s equity investments by 1977) and what happened over the ensuing years. I ended that article with this quote from Warren Buffett's (Trades, Portfolio) 1995 shareholder letter – the year Berkshire acquired the 49% of GEICO it did not already own for $2.3 billion:


  • AB Inbev and SABMiller Agree on Merger

    On Wednesday, Nov. 11, Anheuser-Busch InBev (NYSE:BUD) and SABMiller PLC (SBMRY) reported a merger agreement that would combine the world’s two largest beer makers. After nearly two months of negotiations, SABMiller has agreed to the acquisition which, at its final price, values SABMiller at $108 billion or $66.50 per SABMiller share.

    After board agreement, the acquisition will now undergo regulatory approval which could take up to a year to finalize. Under terms of the agreement SABMiller will be required to sell its MillerCoors LLC ownership and its Miller portfolio in order to reduce competitive hurdles that could slow the regulatory approval process.


  • Global Value Investing – Tom Russo Talks at Google

    Long-term patient value investing: The majority of the money that trades on the stock market every day is certainly not done so using that philosophy.

    Tom Russo (Trades, Portfolio) is a proven long-term investor.


  • My Evolution as an 'Intrinsic Value Seeker'

    I’ve been asked many times, “What do you think the intrinsic value is for this company?” Two years ago my answer would be “the intrinsic value of this company is $50, if you assume x% of free cash flow growth in the next few years and y% terminal free cash flow growth and y% discount rate.” If you ask me this question today, I would say, “First of all, that depends on my opportunity cost, which is reflected in the discount rate I use and secondly, over what period of time?”

    This evolution comes from learnings from my personal experiences, and conversations with some of the best value investors such as Tom Russo (Trades, Portfolio), Donald Yacktman, David Rolfe, etc. In the first few years of my value investing journey, I was a firm believer of the conventional wisdom, which says whatever method you use, be it DCF, liquidation value or the Multiple approach, one should calculate the range of intrinsic value of the security and apply a margin of safety when buying the security. If the intrinsic value of the company according to your calculation is $100 per share, you pay $70.


  • Tom Russo Adds to Long-Time Holding in Philip Morris

    Tom Russo (Trades, Portfolio) looks for value and price when making stock selections. If the firm in which he is a general partner with responsibility for $3 billion, Semper Vic Partners, can be said to reflect the influence of his investing philosophy, its success is undeniable. Semper Vic Partners has produced returns of 6.1%, 21.9% and 24.4% in the last three years.

    Russo’s most significant second-quarter acquisition was his addition of 334,598 shares to his stake in Philip Morris International Inc. (NYSE:PM), a cigarette and tobacco company headquartered in New York City and a fixture in his portfolio, for an average price of $82.16 per share. The deal had a 0.24% impact on Russo’s portfolio.


  • Value Investor Tom Russo on the Power of Consumer Brands

    Early in his career, Warren Buffett (Trades, Portfolio) achieved tremendous investment returns by purchasing cheap but not great companies, and then waited for the market to properly value the company.

    Later in his career, Buffett moved toward buying high quality companies at reasonable valuation metrics because these companies could reinvest capital at high rates of return for decades.


  • Nestle and Capacity to Suffer

    It is no secret to the readers on this forum that I am huge admirer of Tom Russo (Trades, Portfolio) and the idea of the “capacity to suffer.” Businesses with capacity to suffer are rare to find so once you find one, you would want to keep them for a very long time. The question then becomes, how can we identify businesses with the capacity to suffer when we don’t have access to management team the way Russo does? Here I am reminded of the answer Tom Gayner gave to a question he was asked on the Google Campus (link to the article):

    I spent more time reading about people using the exact same resources that you would have access to as well as annual reports, proxy statements and magazine articles. And I try to think and just look and get a gut feeling and make some judgment and discernment whether these people are acting in a way that’s reasonable. I encourage you to think about things in that dimension.


  • Tom Russo on Wealth Track – Long-Term Value

    I’ve written in the past on what I have learned from one of the greatest global investors – Tom Russo (Trades, Portfolio). I think the concepts of “capacity to suffer” and “capacity to reinvest” are profound. In this outstanding interview with Consuela Mack, Mr. Russo generously shared his further thoughts on “capacity to reinvest.”


  • How Harley-Davidson Stumbled – Value Investor Tom Russo

    A strong brand name is a powerful moat abound a business.

    Coca-Cola (NYSE:KO) has one and that is why it occupies a permanent position in the Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) portfolio. Ditto for American Express (NYSE:AXP).


  • Value Investor Tom Russo Discusses Portfolio Management And His Favorite Valuation Metric

    In 2008 Tom Russo (Trades, Portfolio) was able to take profits on several of his core U.S. focused businesses and redeploy those proceeds into bargain international operators.

    Now those international companies represent a large percentage of his portfolio.  

  • A Weekend in Omaha

    This past weekend, I was lucky enough to attend my fourth Berkshire Hathaway (BRK.B) shareholder meeting in Omaha, Nebraska. A few readers that I regularly talk with wanted to know how it went in addition to my takeaways from the weekend’s events; those are the things the remainder of this article will focus on.

    My weekend started Thursday night with a dinner at the University of Nebraska at Omaha put together by Value Investor Conference. The speaker at the event was Tom Russo (Trades, Portfolio), portfolio manager at Gardner Russo & Gardner, an investor that I’ve considered well worth listening to for some time; unsurprisingly, he didn’t disappoint. Much of his speech focused on the concept of “capacity to suffer” – essentially, the willingness of management (in this case, at publicly held corporations) to act in a manner that may negatively impact short-term results.


  • 20 Questions Newsletter Featuring Tom Russo is Ready for Downlaod

    We have recently added "20 Questions with the Gurus" to our website for subscribers to enjoy. Each month, we will interview a new guru, using the questions you submit. Premium members will have higher priority when we choose which questions to submit.

    In addition to reading the interview, subscribers will also have the ability to download the exclusive 20 Questions newsletter. Below is a sample of what the newsletters will look like. This month's features global investor, Tom Russo (Trades, Portfolio).


  • Globetrotting the Tom Russo Way

    Almost three weeks ago, I wrote an article on global investing, which you can find here. In the end, I stated the following:


  • Exclusive Interview With Tom Russo Part II

    This is the second portion of the interview we conducted with Tom Russo (Trades, Portfolio). The first part of ther interview can be found here. We would like to thank our readers again for the questions submitted. Due to time, we were unable to ask all of them.

    6.The power of brands as “a share of the consumer’s mind” is clearly quite important to you and the cash flow that comes from that sort of moat. Any thoughts on technology brands (ex: Facebook (NASDAQ:FB), Google (NASDAQ:GOOG))?


  • Exclusive Q&A Interview With Tom Russo Part I

    We recently had the opportunity to interview guru Tom Russo (Trades, Portfolio) of Gardner Russo & Gardner about his investment strategies in global investing, as well as how he became an investor. The questions asked are from our readers.

    Although we received around 44 questions, we were only able to use 15 of them due to time constraints, but we thank all of your for your submissions and encourage you to please continue to submit your questions for our Q&A’s with the gurus.


  • How to Think About Brands – Tom Russo of Gardner Russo & Gardner

  • Exclusive GuruFocus Q&A With Global Value Investor Tom Russo Coming Soon

    Global value investor Tom Russo (Trades, Portfolio) of Gardner Russo & Gardner has agreed to participate in a Q&A with GuruFocus within the next week. If you, the readers and subscribers, have any questions you would like for us to ask Mr. Russo, please post them in the comment box below.

    Tom Russo (Trades, Portfolio)'s Investment Style


  • Value Investor Tom Russo On The China Factor

    Investors are always leery of China. Respected value investor Tom Russo (Trades, Portfolio) has plenty of exposure to China, but it is through large multi-national countries.

    The growth over the next 30 years is going to be faster in the emerging markets than it will be in developed countries. Russo believes that exposure to that growth is a good idea.


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