This Finance Great Believes Fractions of a Percent Make a 'Staggering' Difference
Every basis point of return—let alone every 100 basis points—has a staggering difference in outcomes in the long run. That’s why you stay focused on the long term and the rate of return; that is where the difference is, that is what you want and need to capture.
— Chuck Akre
Oracle of Finance Chuck Akre famously painted his investment philosophy on the crown molding in the board room of his company, Akre Capital Management.
The words written there are: “The Bottom Line of All Investing is Rate of Return.”
As a fund manager, Akre focuses on compounding capital at an above-average rate, while incurring below-average risk. Written that way, it sounds easy and obvious. Isn't that what most investors attempt to do?
Unlike most investors, Akre has an impressive track record. With over 50 years in the business, he is now managing nearly $15 billion and has a habit of beating the market.
Like Warren Buffett, one way Akre achieves his outstanding results is by living in a place that Wall Streeters might consider the middle of nowhere.
His firm operates out of a stately old home in rural Virginia, in a small town with one traffic light. At home, his house has a view of the Blue Ridge Mountains. "We see deer and bears and foxes and coyotes and wild turkeys," he told one interviewer. "It's good for the soul."
His remoteness keeps Akre from getting caught up in the swirling “nonsense” (as he calls it) of Wall Street.
We don’t get uptight about what's going on in the market and the world. We just turn it off."
— Chuck Akre
We'll go deeper into Akre’s style of investing again next Monday.
In the meantime, if you want more on his investment philosophy, he's one of the great investors featured in William Green's enjoyable and surprisingly profound book, Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life.
Akre has also published three white papers on Akre Capital's website that you can read for free.
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