Glenn Greenberg

Near the top of my list of cochamim is investor Glenn Greenberg who is a partner at Chieftain Capital. In reviewing their latest 13F filing (which for the uninitiated is an SEC filing that lists the investment holdings), I sat in amazement at their willingness to put nearly 40% of client funds in one stock - Comcast (CMCSK). I created this graphic analysis of their accumulation of CMCSK.

Studying their decisions reveals a few important truths. First, Chieftain invests heavily in what they understand and can value. Starting in the second quarter of 2002, Chieftain invested about 15% of their funds in CMCSK (after a significant decline). Investment managers typically consider 2% a significant commitment.

Second, Chieftain invests and reinvests for the long term. Chieftain moved this concentration consistently over the next five years from 15% to nearly 40% as the stock price rose. Most investment managers are reducing their positions as the stock price rises and do so over much shorter time horizons.

Third, Chieftain is willing to abandon a position because of management direction. The first time Chieftain reduced their CMCSK was in response to CMCSK's attempt to purchase Disney. Despite a dropping stock price, Chieftain was willing to sell in order to express its disagreement.

Fourth, Chieftain is willing to engage in short term buying and selling. In response to a rapid rise in price, CMCSK took some gains only to return quickly and repurchase those shares. An advantage of such sizeable positions seems to be that short term buying and selling can enhance returns without forcing abdication of the stock.