Robert Hagstrom, Senior Portfolio Manager, EquityCompass Investment Management met with Julie Cooling, Founder & CEO, RIA Channel to discuss his investment philosophy and the importance of process over outcome.
Hagstrom, a best selling author of The Warren Buffett Way, began following Buffett as a young stock broker, and continues to practice his philosophies to this day. As an active manager to a highly concentrated portfolio, Hagstrom values quality businesses with good management. “We buy and hold,” Hagstrom says on the low turnover ratio.
For decades, questions have swirled around active management and its long-term viability. From Hagstrom’s perspective, many active managers get caught chasing the next best thing and end up over diversified. The trick, he suggests, is solid bottom-up stock picking aimed around delivering longterm stockholder value.
Another trend Hagstrom speaks on, is the hiring and firing of portfolio managers. “People are way too focused on the manager’s outcome versus understanding their process,” believes Hagstrom. For advisors, it is equally important to understand what is behind the strategy and how it plays into the bigger picture. EquityCompass places huge emphasis on education for advisors and assistance with portfolio construction.