Tweedy, Browne

Tweedy, Browne Company LLC is an American investment advisory and fund management firm founded in 1920 and headquartered in Stamford, CT.^[1] As of December 2012, it managed approximately 13 billion dollars in separate accounts and four mutual funds.^[2]

History[]

The company was started in 1920 by Forest Berwind "Bill" Tweedy, who initially focused on what are known as "thinly traded" shares of smaller companies that traded in lower numbers and lower volume than larger company stock. After decades working solo, Tweedy was joined by Howard Browne and Joe Reilly in 1945. Walter Schloss had a close friendship with Tweedy and the pair shared investing theories and business referrals, but Schloss never officially works at Tweedy, Browne. Tweedy retired in 1957, and Howard Browne became president of the company.

In 1997 Tweedy, Browne was purchased by the holding company Affiliated Managers Group for $300 million.^[3]

The firm's managing directors included well-known value investor Christopher H. Browne, Howard Browne's son and author of The Little Book of Value Investing (2007). Christoper Browne died on December 13, 2009.^[4]

The managers of Tweedy, Browne also published a number of freely available papers about investment strategies.^[5]

Investing philosophy[]

All of the firm's funds are managed in accordance to the principles of Value Investing as popularized by Benjamin Graham. Tweedy became acquainted with Graham in the early 1930s.

In a 1992 paper, Tweedy, Browne outlined the five characteristics they use to select stocks.^[6] (1) Low price to book value; (2) low price to earnings ratio; (3) significant stock purchases by executive officers at a company, particularly when stock price drops, indicating insiders have confidence in long-term company prospects; (4) significant drop in stock price; (5) small market capitalization. While these traits do not guarantee a positive outcome, the firm cites academic research from around the world to indicate these traits may increase the odds of investing success when consistently applied over time.