Monday, September 28, 2015

This Boutique Father-Son Investment Firm Thrives By Ignoring Conventional Wisdom

Martin "Marty'' Sass and Ari Sass are a father-son team of an investment management firm in Manhattan. Marty started M.D. Sass in his basement apartment over 40 years ago, and now Marty and affiliates employ more than 80 people and manage $7.5 billion for Fortune 500 companies and wealthy individuals. Marty takes an unconventional approach to investing, pursuing targeted opportunities versus broad diversification of assets. Here are some insights that Marty and Ari shared about their success:

Being a contrarian pays off.

How do you go from zero clients 43 years ago to an investment firm that garners top-tier investment performance? Be yourself, even if it means being a contrarian.

Marty referred to "the herd instinct" that many investment managers follow, which is to invest in index funds, exchange traded funds and government bonds. He believes these investments are the wrong direction if you want to achieve superior results, but that that many investment management companies are satisfied with producing mediocre results. Marty believes that his forensic research experience of companies is what sets him apart.
"I have learned over all these years that focusing on companies that you really know well with strong management, buying them at a significant discount from their intrinsic value, and focusing on only a few companies that meet that stringent criteria, is actually safer and produces superior returns with less risk,'' he said. "It's safer than wide diversification."

Marty did not build the business based on the conventional wisdom and has achieved results well above market benchmarks. It's his secret for going from a start-up with no money and no contacts on Wall Street, to achieving success. Ari is fully on board with his dad's approach to being a contrarian in this industry.
Read more about this family business

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