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RISMEDIA, September 25, 2008-(MCT)-The headlines are scary: “Worst Crisis Since ’30s, with No End in Sight,” screamed The Wall Street Journal.”Stocks nose-dive again,” declared The Philadelphia Inquirer.

“Panic Sweeping Wall Street May Leave No One Standing,” proclaimed U.S. News and World Report.

As the stock market rumbles, huge investment firms tumble and the American economy teeters, you might think investment adviser Tom Russo’s clients would be pounding on his door in panic.

But it’s fairly calm at Gardner Russo & Gardner in downtown Lancaster, where Russo and his two partners, Eugene Gardner and Eugene Gardner Jr., manage investment portfolios for wealthy families, college endowments and foundations.

Russo joined the firm in 1989, when he moved here from New York.

He also is general partner in the investment firm Semper Vic Partners.

Altogether, he oversees several billion dollars in investments.

“The key to success in investing is low expectations,” said Russo, 53, of Lancaster. “My goal is to find businesses I can hold onto forever.”

Russo is a follower of Warren Buffett, the world’s most successful investor.

Russo focuses on a small number of companies that don’t have a history of volatility.

They aren’t the most exciting companies, but they are reliable — companies such as Nestle, which has been growing in the expanding world market.

People everywhere, Russo said, will always want chocolate, and they will always know the name Nestle.

Will Nestle rock the market? No. But it won’t flame out either.

That philosophy, he explains, allows him to avoid the manias that take over Wall Street, like making money on the credit boom and subprime mortgages, the cause of so much trouble now.

“We often find ourselves out of step, invested in things that are out of fashion,” Russo said.

There are times when being out of fashion can be tough.
Russo remembers 1999, when Wall Street was up 20 percent. His investments were down 2 percent.

“There was a lot of second-guessing, but you live through it and learn the value of staying the course,” Russo said.
The dot-com bubble burst the following year and Russo’s out-of-fashion investments were back in style.

Russo is not surprised the markets are going through a crisis.

“I was aware that irresponsibility was rife in mortgages as early as 2005,” Russo said. “But I don’t think it was expected that the fall would be so severe. It’s really becoming a crisis of confidence now.”

In the 20-plus years he’s been investing, Russo has seen other financial meltdowns. They are all, ultimately, caused by the same thing.

“It’s greed,” he said. “And it’s easy to be greedy when you’re playing with other people’s money.”

But Russo’s job is to make other people’s money grow. He does a lot of research, sticks to a small number of businesses, many in the food and beverage fields, and knows there is no such thing as a sure bet in the stock market.

“The investor always has to worry about easy-to-own investments, things that are clearly lined up,” he said. “Take oil. Even a month ago, there was a clear consensus that there was a march to $200 a barrel.”

Oil is about $100 a barrel now, a fall of about 32 percent since July.

Or look at that dot-com boom that turned into a bust.

“Nothing was easier than investing in dot-coms. People transferred everything,” Russo said. “That’s perilous.”

And, he said, people always forget the last crisis and think the rules won’t apply, that this time it’s going to be different.

“It’s never different,” Russo said. “But it’s always expressed differently.”

Russo, who grew up in Janesville, Wis., earned an undergraduate degree at Dartmouth in 1977 and went on to earn a combined law and master of business administration degree at Stanford in 1984.

From there, he headed to the Big Apple.

“I liked New York a lot,” he said. “It’s a place where investors should go because living there demystifies Wall Street for you.”

But he and his wife, Georgina, wanted to raise their two young kids, a son and a daughter, in a more family friendly area, so they came to Lancaster.

Their son, now 25, works in investing, and their daughter, 22, works in TV broadcasting.

Georgina Russo is active in a number of organizations, including the YWCA, Pennsylvania Academy of Music and Lancaster Museum of Art.

The Russos like to travel.

“It’s informing and inspiring,” he says.

Russo still travels to New York a lot and always has access to the markets all over the world, thanks to his Blackberry.

“It’s a blessing and a curse,” Russo said with a smile.

Copyright © 2008, Lancaster New Era, Pa.
Distributed by McClatchy-Tribune Information Services.

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