Interview #87 : Chip Rewey (Rewey Asset Management)
Interview #87 : Chip Rewey (Rewey Asset Management)
Value Investment Specialist
For this issue we have the pleasure of interviewing Chip Rewey, Founder of Rewey Asset Management.
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Read the last two editions with Michael Fritzell (Asian Century Stocks) and Kevin Durkin (Ballina Capital) ➡️
Hi Chip, thanks so much for taking the time out to do this interview.
Can you please tell readers about your background, and how you got involved in investing?
Thank you for the opportunity to discuss my investing philosophy and process and how I implement this strategy at Rewey Asset Management.
I grew up just outside Detroit, Michigan in an automotive family. Undoubtedly, the severe boom and bust periods of the auto industry throughout my childhood shaped my views on investing – that is an investment must a have strong financial profile and a long-term growth view that can weather shorter term bumps.
I am old enough to remember the severe inflation of the early 1970’s and the detrimental impact this inflation had on the economy and the purchasing power of an individual. Even in the third grade, I can vividly remember the price of a pack of gum rising from 15-cents to 25-cents over a six-month period.
The experience of coming of age during the severe double-dip recession of the late 1970’s shaped and defined my strong belief that the ultimate goal of investing is to increase one’s purchasing power, specifically to increase their wealth at a faster rate than inflation can erode one’s buying power.
The stock market was a natural draw to me. I was an inquisitive child that took apart the new walkie talkies to see how they work. The late 1970’s and 1980’s also saw the rise of first guru investors I followed, such as Warren Buffett and Peter Lynch.
The draw to stocks was to learn about what companies did. To assess which ones could be good investments has always been one of my favorite activities.
Over the course of my investing career, I have had the fortune to work with, and be mentored by, three legendary value investing gurus, Laura Sloate, Jerry Cramer and Marty Whitman.
I have curated my investment approach by pulling what I believe are the best pieces of these investors’ philosophies into my own Rewey Asset Management philosophy.
Laura Sloate instilled the need for vision when analyzing a company. Laura, who was blind, focused on not only what assets and opportunities a company has today, but what was the multi-year vision, or strategies of these companies could be over the future, and if management had the tools and resources to execute on this strategy.
I call this, “The Ability to Grow”. Jerry Cramer taught me the importance of behavioral investing. The market can offer true value in situations that are neglected or misunderstood by most investors. Any active investor needs to believe the market is inefficient.
If one is willing to do their own work and think for themselves, they can potentially identify neglected and misunderstood situations that are incredibly undervalued. Finally, Marty Whitman emphasized the importance of a strong financial profile, i.e. start with the balance sheet.
The markets are unpredictable, and any enterprise that can grow and thrive over time must be able to survive short periods of market or economic stress.
I summarize this philosophy into 1) Financial Strength, 2) The Ability to Grow and 3) Valuation.
What type of businesses, situations, or even industries do you like to invest in?
I am relatively agnostic as to which industries I invest in. I search for investment situations that follow the outline of my philosophy.