Spartan Profiles: Robert Olstein
3 YARDS & A CLOUD OF PROFITS
Where other financial experts bought Enron, he avoided it. Where others talk to management, he never does. “That’s because they have a vested interest,” explains Robert Olstein, ’64, MBA ’66, chairman and founder of the $1.4 billion Olstein Financial Alert Fund of Purchase, NY. Instead, Olstein chooses “to just look at the numbers and make sure there aren’t any flaws.”
In recent years, his ability to break down the numbers has vaulted his fund to the top. Over the past five years, the fund ranked in the top 5 percent of all equity funds. Its 15.5 percent average annualized five-year return beat the S&P 500’s virtually flat return for the same period. The subject of many positive articles in financial publications such as Barron’s, Forbes and Fortune, Bob is now a ubiquitous presence on television—CNN, Fox News, and the networks—and has emerged as one of Wall Street’s most respected gurus.
“I’m proud that I’m being considered in the same league as Warren Buffet, who was my hero,” says Bob, who likens his winning investment strategy to Woody Hayes’ resolute “Three yards and a cloud of dust.” As he puts it, “Your best bet in the long run is to make the fewest errors. You play defense, eliminate big errors, and then you consider winning.”
Bob attributes his success to lessons he learned at MSU. A native of the Bronx, NY, where he was both valedictorian and a multi-sport star athlete, he picked MSU because of the mathematics program and the football reputation set by Biggie Munn and Duffy Daugherty. He majored in mathematical statistics as an undergraduate and then received his MBA in accounting. “MSU was the best four years of my life,” says Bob. In statistics, he learned the so-called “null hypothesis” taught to him by advisor and trusted professor James Stapleton, where “you look at all possible outcomes and guard against the worst error”—essentially the basis for his investment strategy.
In graduate school, he recalls, “I was very, very impressed with a couple of accounting professors, George Mead and Roland Salmonson. I became enamored of reading financial pages.” To this day, Bob remains good friends with fraternity brothers from Sigma Nu and other MSU classmates, several who work for and with him. His summer home in the Hamptons proudly displays the “S” flag. And his annual reports are always done in, you guessed it, green and white.