Nov 2011     Issue 6

Manual of Ideas
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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.

James Montier on the obsession with fund benchmarking
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Montier’s article in the FT argues that the obsession with performance benchmarking when comparing different fund managers in itself is destructive to future performance. He concludes by quoting from Sir John Templeton: “If you buy the same securities as other people, you will have the same results as other people.” Apologies if you get caught by the FT subscription firewall; you should be a able to access a limited number of free articles per month.

Interview with Joel Greenblatt
A bullish interview from the creator of the “Magic Formula”. Joel Greenblatt argues that on a 20 year trailing cashflow yield, share prices are in the 95th percentile towards cheap.

Another Buffett interview by Charlie Rose
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This interview took place just after the announcement in September that Berkshire Hathaway was going to begin buying back its own shares. We started buying Berkshire for the fund for the first time in July and used weakness in the share price to build it into our largest position during August. It was reassuring to hear a couple of weeks later that the Chairman agrees with our analysis that it is significantly undervalued. In this interview, Buffet also comments on his confidence in the US economy and the situation in Europe.

Why every Non Executive should think like Warren Buffett
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We authored this article on behalf of the Winmark NED Network (, a forum for Non Executive Directors, representing over 200 public companies and numerous private companies. It was published to the network on 8 November 2011. The article sets out a suggested framework for how Non Execs should think about capital allocation, particularly regarding acquisitions.