Even a Subpar Sage is Pure Genius
John Kay discusses how Berkshire Hathaway owes its stellar success to a model that is sustainable and simple, so it is baffling that there are so few imitators.
Author: Editor
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VID March 2013
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VID January 2013
Hetty Green: The Witch of Wall Street
Hetty Green was perhaps Wall Street’s first value investor. She was born in 1834 when the financial world was entirely dominated by men. At the time of her death she had liquid assets of an estimated $100m. This article tells the story of how she did it and highlights her value investing principles and a relentless focus on price and value, which in the context of her own family, she definitely took too far. -
VID November 2012
Is Tech now ok for value investors?
Ever since Warren Buffett announced his investment in IBM, there has been a marked shift in the interest of value investors in this sector. We have believed for some time now that there are some technology businesses which have got such a strong lock into their customer base, that there is sufficient predictability of revenue to value the business. In the last 4 years, a material part of our out-performance has been from investing in undervalued software and technology businesses. In this article (which was published 3 months ago in the FT so the PE ratios are a little out of date), David Stevenson sets out the case for some of the huge tech companies and their undemanding valuations. We do not agree with all of his recommendations but Microsoft is a holding, Apple was a holding until September and technology stocks are just over 30% of our portfolio today. -
VID July 2012
An Interview with Howard Marks on Bloomberg
Oaktree Capital, founded by Howard Marks, manages $77 billion, investing mainly in distressed debt, real estate, and corporate debt. In this interview, Marks sets out his belief that it is impossible to get macro calls consistently right, and equally impossible to time purchases so that they are at the bottom of the market. He discusses the long-term returns currently on offer from the US real estate market and comments on the investment management process, quoting Charlie Munger: “None of this is meant to be easy and anyone who thinks it is is stupid”. -
VID May 2012
Berkshire Shareholders Meeting – 2012
So soon after Buffett’s remarkably candid announcement that he had been diagnosed with stage 1 prostate cancer, it was impressive to hear him and his 88 year old Vice Chairman, Charlie Munger, displaying their usual high levels of energy, acerbic wit and razor sharp analytical powers to handle the 6 hours of questions from shareholders and analysts. We have written up our highlights from the event, which you can read here. -
VID March 2012
Buffett article and annual letter to shareholders
Click here for the article
Click here for the video
Click here for his shareholder letter
This article was published in Fortune as an adaption / preview of his shareholder letter, published two weeks later. This would be an excellent one to give to a teenager or someone who is new to investment; it is typical of Buffett’s ability to set out the key tenets of his successful investment strategy in very straightforward language. We have also included a slightly out of date video which we missed including in the January edition. Here, amongst other comments on the US economy, Buffett discussed the Euro situation, which today may appear somewhat less risky than it did back then although we would argue that the fundamental risks have not really changed. -
VID January 2012
The Misguided Mix-up of Celebrity and Leadership
Click here
Within our long check list of items we use to assess a potential investment is a section on management. One of those questions asks whether the leadership is “low ego”. We have long believed that the larger the ego of a CEO, the more likely it is that the business will be managed to further the aspirations of the person rather than the shareholders, which often leads to poor capital allocation. We recently found this article, written by Jim Collins, the author of “Good to Great”, which supports this thesis. -
VID November 2011
Nov 2011 Issue 6
Manual of Ideas
Click here
Simon was recently interviewed by The Manual of Ideas, a high quality online research resource for value investors, providing screening and detailed research on specific value ideas. Click on the link above for a copy of the interview, which provides commentary on two of our investments. -
VID September 2011
Sept 2011 Issue 5
Invest like you are buying a business
http://www.gurufocus.com/news/139374/invest-like-you-are-buying-a-business–kovitz-investment-group
This is from the quarterly update from the Kovitz Investment Group. It highlights one factor that can lead to assets being mis-priced as businesses are compared with a basket of other similar but not identical companies. This often throws up anomalies which can reward the thoughtful investor with long-term out performance. -
VID July 2011
July 2011 Issue 4
Steve Forbes interviews Joel Greenblatt
http://blogs.forbes.com/steveforbes/2011/07/05/joel-greenblatt-interview-transcript/
Following his success with “The Little Book that beats the Market”, Joel Greenblatt is on the interview circuit again, promoting his 3rd book, “The Big Secret for the Small Investor”. This interview is packed with insight, extolling the virtues of disciplined long-term value investing but also describing how few people have the patience to execute on it. He argues articulately that despite the significant research, which supports the long-term out performance of this style of investment, the opportunity has not been diminished by the market but has expanded on account of institutional bias within the main stream fund management community.