Value Invest London

December 2014

Neil Woodford interview
London Value Investor Conference speaker Neil Woodford was interviewed by Killik & Co last week, in this video he discusses the approach of his new fund.

For better investment results, concentrate
In this article Peter Elston suggests that many active funds are in reality “closet index huggers”. After looking at findings from a variety of sources, he concludes that “the evidence strongly supports the case for putting 10 per cent [of a portfolio] in a thoroughly researched, well-governed, high-yielding stock, not 1 per cent.”

Closet trackers made up a third of the total UK equity market
Following on from the above article, David Oakley provides some analysis on active versus passive management using some examples detailing five of the biggest UK funds.

Reversion to which mean?
In this video, Elroy Dimson, emeritus professor of finance at the London Business School tells Long View columnist John Authers about the risks of exiting the market, even if it seems due to revert to the mean.

A fireside chat with Charlie Munger
After Munger’s Daily Journal shareholders meeting, Jason Zweig from the Wall Street Journal interviewed him on a number of topics. The article covers Munger’s views on a broad range of topics including Ben Graham, accounting, newspapers, Buffett and high frequency trading.

Hard sell: why fund managers underperform
This John Authers article in the FT looks at the effects on the performance of fund managers sell decisions. He suggests that the overall positive impacts of buy decisions among 45,000 trades of a group of pension funds between 2003 and 2006, was outweighed by the negative impacts of their sell decisions. The underlying reason for this effect is analysed in the article, it looks like there is a psychological reason for the effect, where “people happily took far greater risks to avoid taking a loss than they would to expand a profit.”

Value investing during worldwide quantitative easing
Most Value Investors tend to be “bottom up” investors, choosing not to focus too much on macro issues, but no investment exists in a vacuum and Arnold Van Den Berg of Century Management gave this presentation earlier in 2014 looking at the potential effects of the recent worldwide quantitative easing programme and how it might affect investors over the coming years.

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  • “It’s very much the Rolls-Royce of the investor conference market”
    Paul Scott, Stockopedia
  • “The people in that room were a more powerful cadre of the powerhouse of investment than has been gathered for a very long time”
    Jonathan Ruffer, Ruffer LLP
  • “It’s kind of like Glastonbury isn’t it, for the Value Investing community”
    Nick Train, Lindsell Train
  • “What I like about it is that it is a practitioners conference and it’s an opportunity to come and hear from your peers about the work that they are doing and how they see value investing”
    Hassan Elmasry, Independent Franchise Partners
  • “I think people really look forward to it and enjoy it. There’s a good bunch of people here who have travelled a reasonable way – the speaker after me was from Hong Kong and there’s a big Canadian crew and a big US crew – people come from around the world to see this”
    Nate Dalton, Affiliated Managers Group
  • “If somebody’s already been through that process of seeing what the conference is about and then is willing to pay their money for the effort of coming here, that’s a great filtering process.”
    Gary Channon, Phoenix Asset Management
  • “The conference has become a part of the furniture of the London scene. You can discover that is what lies inside you – that you are innately a value investor.”
    Richard Oldfield, Oldfield Partners
  • “I do speak at a fair number of conferences to investor bases, this one is really quite a good list – some very, very good investors present and some very interesting speakers”
    Jon Moulton, Better Capital
  • “Definitely worth it and I know a number of people who have ‘ummed and arred’ about coming along and I’m sure that they will be regretting that they didn’t come today – and it’s only going to get better as far as I can see”
    Tim Green, Private Investor
  • “Having sat through the whole day as I wanted to come and hear all of the speakers – I’ve been really impressed by the quality”
    Anthony Bolton, Fidelity
  • “I’ve got a bunch of business cards to add to my collection and some folks I’ve been looking forward to meeting, plus some firms I didn’t even know existed but sound really interesting and I’m looking forward to building on that relationship base”
    Mason Morfit, ValueAct Capital
  • “You couldn’t find that anywhere else really, where you’re speaking to the principals who have been voted on to the Board [of Microsoft] to effect change”
    David Shapiro, Willis Towers Watson
  • “What I was impressed with is, because the subject is very similar, value investing, they found a variety of ways of attacking the same subject. I was also very impressed, having done this in another location, of seeing them stay on target time-wise so that it moves along at a great pace and I think the audience is greatly rewarded by that discipline”
    Don Yacktman, Yacktman Asset Management
  • “Very well organised and it was a treat for investors like us to hear some great speakers”
    Roli Saxena, Drona Capital
  • “I came last year and I liked it so much that I have been looking forward to today ever since”
    Dominique Levy, Sonian Capital
  • “We’e got a very sophisticated audience who are used to value investing – I think this is a good audience”
    David Samra, Artisan Partners
  • “The profile of the speakers is one of the main reasons that I came”
    Niels Borgen, Private Investor
  • “When you look at the ideas speakers have put forward in previous years and how they have performed over the last few years, they’ve done very well – if that performance continues it would be quite remarkable. It does show that you can pick up some good ideas at a conference of this sort”
    Jonathan Mills, Metropolis Capital
  • “I came last year as well and I thought that it was the most outstanding event that I have been to”
    Leon Boros, Equity Strategies