I was surprised to read that well-known value investor Robert Rodriguez will take a one-year sabbatical from FPA. I saw him speak at a panel at the CIMA Conference and he seemed pretty fired up--tears of a clown I guess.
As I think about it, sabbaticals have a distinguished history among money managers. Sometimes they are early retirements that end up being downgraded to sabbaticals, Michael Corleone-style. Michael Steinhardt took a sabbatical. My old boss did too, sort of. One of the Chandler brothers--I forget which one--took some time off to go to Italy and study Italian. George Soros "retired" but that didn't last long.
Outright quitting can also be an honorable course for professional investors (I hope my high school wrestling coach isn't reading this). When the gap between how you'd like to manage your own money and how you're forced to manage outside money grows too large, a professional money manager, especially one who is already rich, should quit rather than make compromises that come at the expense of long-term investment success. Mark Sellers did this recently, as did Michael Steinhardt and Julian Robertson, and Warren Buffett in the late 60s. All of them could have chosen a successor, or sold their management companies, but they chose instead to simply close the doors.
My take on sabbaticals is that they're only OK in the case of severe injury - for example, a separated shoulder.
Posted by: NateCarrFan | March 12, 2009 at 05:53 PM