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In 1995, Campbell was asked to create the Private Client Portfolio, which attracted many billions, and managed it for a decade with the assistance of his exceptionally talented team. The Portfolio’s objective was to exceed the S&P 500’s total return by investing for the long-term in shares of high quality companies purchased at fair prices. Fortunately, the Portfolio achieved that goal. Within the Private Wealth Management division, it was branded “The Campbell Portfolio.” Together with his team, he wrote The Private Client Focus, a monthly investment publication. Campbell gave countless presentations to clients, prospective clients, and at conferences. He retired on November 30, 2005.
The Campbell Portfolio
About
John D. Campbell
Former Director of Private Client Investment
Goldman, Sachs & Co.
John D. Campbell became the Director of Private Client Investment at Goldman, Sachs & Co. in 1995. He began his 33-year career at the Firm as a research analyst, eventually becoming a Vice President in the Investment Research Department, a member of the Stock Selection Committee, the Director of Private Client Investment, a Managing Director, and a Partner (Participating Managing Director) in the Investment Management Division.
John feels fortunate to be especially qualified to write this book due to his training, professional career, and experience of investing through Vanguard subsequent to retiring fifteen years ago. As a research analyst he studied companies spanning diverse industries and resisted prods to become an industry specialist. Instead, he learned about new industries, businesses, and managements.
He grew up in a non-business family as his father was a Presbyterian minister. A friend of his father arranged for him to invest through a leading stockbroker at his firm. It was a disaster. One of several losing investments was E.J. Korvette, a retailer that went bankrupt. Campbell’s grandfather, a farmer in Cloud County, Kansas, had lost money in the market during the Depression. Understandably, the only advice Campbell ever received about investing was, “when it comes to stocks, be very careful.” As a result, he has always tried to be prudent.
Campbell was extremely fortunate to have had two invaluable teachers, Robert M. Menschel, Senior Director of Goldman, Sachs & Co., and Warren Buffett, widely acknowledged to be the best investor of his generation. Bob Menschel, who is acknowledged to be one of the best investors in Goldman Sachs’ history, became Campbell’s mentor. Bob taught Campbell the value of investing for the long-term in well-managed companies possessing strong brands, avoiding crowd behavior, and not making serious mistakes by taking undue risk. Buffett taught him, primarily through Berkshire Hathaway’s annual reports, to invest for the long term in high quality companies whose stock is purchased at fair prices. After reading and studying Buffett’s philosophy, things finally made sense to him. Bob and Buffett have told Campbell about their teachers. He has thanked them several times for educating him; both replied, “you must have a teacher.”
Campbell’s experience in the Investment Research Department, in addition to what he learned from Bob and by studying Buffett’s writings, paved the way for him to become the Director of Private Client Investment for many years. In that role, he advised clients who were typically successful entrepreneurs but had limited knowledge about investing. Interestingly, their four common characteristics were: having a creative idea, having an idea for an as-yet unsatisfied need, obtainable financing (frequently a second mortgage on their home) and, most importantly, willingness to take risk. The challenge for them was how to invest their funds and, oftentimes, the proceeds of their company’s sale.
In the 15 years since retiring, Vanguard has provided Campbell with an entirely different investment perspective. First off, he studied the merits of investing in index funds and Vanguard’s ownership structure. Finding them compelling, he decided to invest exclusively through Vanguard. At that time, Vanguard was the unquestioned leader in offering low-cost index funds due to its unique structure in which investors own the mutual funds that own Vanguard. This structure eliminates the inherent conflict arising when management must earn a return on capital. Today an investor can duplicate low-cost index portfolios at Fidelity Investments and other firms.
On a personal note, Peter S. Kraus, former Co-Head of Goldman Sachs Investment Management Division, once asked Campbell why he spent so much time with clients instead of only researching companies. Campbell told him his goal was to teach. Likewise, his goal here is to teach you how to take responsibility for your investments. This is Campbell’s course for you about how to invest.
Campbell is a graduate of Princeton University and Columbia Law School. He became a Chartered Financial Analyst in 1975. He and his wife enjoy living in New York City and the Catskill Mountains. Their two daughters, sons-in-law, and five grandchildren live in North Carolina and Connecticut.
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