Geoff Gannon – More Like Graham, Less Like Buffett

They say it's never too soon to start planning for your career. Geoff Gannon, founder of Gannon On Investing, started when he was only 14.

This week, Benzinga published an interview with Gannon, who spoke about the differences between Ben Graham (who Gannon has studied extensively) and Warren Buffett.

“Warren Buffett likes to buy an extraordinary company at an ordinary price and Graham likes to buy an ordinary company at an extraordinary discount,” he said. “[Graham] doesn't pay above average prices. He pays below average prices and he kind of assumes that companies, in general, will have an average future.”

Gannon said that whereas Graham liked to diversify, having as many as 100 different stocks at one time, Buffett preferred to have 5 or 10.

“Except for diversification, where I'm more like Buffett,” Gannon continues, “I am probably more like Graham. I tend to try and get a really low price, rather than a really great business.”

However, Gannon said that Buffet's strategy used to be a lot closer to Graham's. “[Then in the] ‘70s he got interested in advertising agencies, the Washington Post, some media,” he said. “Started buying things where value is intangible. I guess a lot of that influence is Charlie Munger, Berkshire's (NYSE: BRK.A) vice chairman. He [was] introduced to him around that time and started thinking more about intangible assets. That led him down to Coca-Cola and Gillette.”

Gannon added that he does not think that Buffett would have been as successful using Graham's investment style. Whereas Graham never managed a large amount of money, and tried to maximize returns and would pay out most of the capital gains every year in his fund, Buffett has always retained all the assets.

“Berkshire has never paid a dividend,” Gannon said. “He's too big to invest in the Graham-type things. His performance in the ‘50s and ‘60s would have been about the same. Starting in the ‘80s on he was just too big to apply Graham's ideas and too many people were using Graham's ideas. It was getting hard to find obvious tangible asset bargains so he had to go into media and advertising companies.”

Don't miss the full interview right here on Benzinga.