The Good Investor

There are many people who have gotten very rich operating hedge funds. There are a host of arguments against hedge funds since they are just basically short-term traders and some do not see any value added in what they do. Some say they just sell to one another and make profits.  If one does manage a hedge fund and gives returns to the fund owners isn’t that providing value, too? After all isn’t this all about making money?  The arguments on this topic can be long. Other businessmen take different strategy.

There are those who take a long term approach to buying into a company like Warren Buffet through his Berkshire Hathaway. It looks for value stocks and holds them for a long period of time. Right now the value that Buffet gives is if he buys a company’s stocks it seems to indicate that this is a very well run company. It attracts a lot of good publicity for the said company.

Another man by the name of Ian M. Cumming takes a very similar style to Warren Buffet. He is the Chairman and CEO of Leucadia National Corp. This is a multi-billion dollar company that has been described as a “mini Berkshire Hathaway”. Historically it has been giving an annual return of 22%.

Yet the approach of Cumming has been more participative. He looks for distressed companies at cheap prices and gets involved in running the company by often taking controlling interest. Then a way must be found to increase productivity. With the company value significantly raised Cumming then sells the company at a profit from its investment.

Mind you he is not known as a corporate raider who buys a company often using its own assets as collateral to fund the acquisition and then selling it piece by piece. Cumming and Leucadia National bring something more positive to a company it acquires; fixing and improving it.

For companies that are struggling these are the kinds of investors needed. Ian M. Cumming brings to the table the type of investment practice that benefits everyone, the employees, management, and the shareholders.