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Whitney George: Finding Value in Natural Resource Stocks
Whitney George, portfolio manager of the Sprott Focus Trust, is a career-long value investor who has described himself at times as a "Buffett groupie" reflecting his long-standing admiration of the legendary investor.
Like Buffett, George seeks to capitalize on the manic depressive behavior of the aggregate stock market, a group author Benjamin Graham memorably referred to as Mr. Market—the fictitious business partner who impulsively offers to sell his share of the business or to buy the reader's share every day.
Unlike Buffett, however, George seeks value investment opportunities in gold and silver mining stocks, a practice Buffett famously eschews.
In this exclusive interview with the Sprott U.S. Holdings CEO, Rick Rule, George takes us through his career as professional money manager and explains his rare interest in both value investing and natural resource companies.
Transcript (edited for readability)
Rick: You are known to me as a value investor person who is interested in fundamentals and, like myself, a contrarian. I’d like to begin with discussing what sort of character flaws, what part of the early part of your upbringing caused you to become a contrarian and a value investor. Tell me something about what happened pre-Wall Street.
Whitney: Well, pre-Wall Street, I grew up in a family that had some of its own dysfunctions, was independently-minded, fought with my mother probably from the time I reached puberty until about the age of 30. And so, I was of—I was probably a difficult son. I failed at getting into Princeton University which made me the first in 3 generations to mess that one up. I did go to Trinity College and had a fabulous 4 years where I majored in history. But when I—it became time for job, I really wasn’t qualified for very much. A history major with summer jobs, a tennis pro and a yacht club manager and maybe a lifeguard really wasn’t ideal for getting a job on Wall Street.
My grandfather was a $2 broker or an odd trader on the New York Stock Exchange. My father was in institutional sales in the ‘60s and ‘70s and had an up and down career. So, I really didn’t know much about anything else other than everybody seemed to go to Wall Street. In 1980, that was a fairly difficult proposition. I believe I had 50 interviews over the course of 2 months and failed to get any offers except for a headhunter who thought that I was good at interviewing.
And finally, I was interviewing at Oppenheimer where I knew nobody and the manager said after about 10 minutes of my interview where he was paying more attention to his Quotron machine, the then-version of a Bloomberg at the time, and said, “Why do you want to be in this business?” And I told him in rougher terms, “Because I want to make a boatload of money.” And all of a sudden, the light went on and I was upstairs meeting the branch manager and on my way at Oppenheimer & Co. and started the day Ronald Reagan got elected.