Key Principles of Charles Diker's Investment Philosophy

Born in Brooklyn in 1934, Charles Diker was born into a family of businessmen. His parents owned a successful fashion accessory manufacturing and distribution business. He was schooled early in the art of trade. He was an academic high achiever and was accepted into Harvard in 1952, earning a business degree in the summer of 1956 and a Harvard MBA in 1958. He leveraged his quick mind and Ivy League MBA and became the assistant to the founder and president of Revlon, Charles Revson. Revlon had gone public only three years earlier. Diker would get his first training operating in a public company as a hands-on observer and actor, during a period of high growth. Revlon at the time could still be considered a smallcap company with a market cap of under $500 million. By the time Diker was 36 years old, he had already made his first million. His philosophy of investing revolves around several key principles:

1. Invest in companies whose businesses you can understand (many of his biggest successes were in consumer product companies).


2. Get to know management. Look for intelligence, a high level of integrity, strong communication skills, and make sure they understand their products and business well.


3. The Company must have a niche product or service, and you must believe in that niche.


4. Patience is important. Remember, you are not buying a stock, you are buying a company. You may have to hold it for ten years before it matures into a major homerun.


5. Do your homework; understand companies you invest in forwards and backwards.