Value Invest

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.

Transcript of David Einhorn’s Speech at the Ira Sohn Conference
http://www.insidermonkey.com/blog/2011/06/02/transcript-of-david-einhorns-speech-at-the-ira-sohn-conference
David Einhorn discusses the pricarious nature of US finances and provides two long-only tips which includes one of our positions, Microsoft.

Howard Marks:  How Quickly They Forget
http://oaktreecapital.com/MemoTree/How%20Quickly%20They%20Forget%2005_25_11.pdf?
Howard Marks is the highly respected CEO of Oaktree Capital and author of the book: “The Most Important Thing”, which should be on every Value Investor’s reading list. In this letter to his investors, he sets out the psychology of investment which leads people to so quickly forget the lessons, that they think they learn in periods of crises.

James Montier: A Value Investor’s Perspective on Tail Risk Protection: An Ode to the Joy of Cash
http://myinvestingnotebook.blogspot.co.uk/2011/07/james-montier-value-investors.html
Warren Buffett first coined the phrase “an economic moat”, by which he meant the factors that enable some businesses to sustain and protect above average profits for a long period of time.   In this Video, Pat Dorsey, the author of ‘The little book that builds wealth’ sets out his 4 categories of an economic moat.  I have included a second link, which covers the same content in an article rather than a video.

Zeke Ashton:  Evolution of a Value Investor: It’s All about the Process
http://www.gurufocus.com/news/138904/zeke-ashton-centaur-funds-june-2011-report
We really liked this article.  Coming from a business background, we found it very natural to establish a well defined process early on to support our investment decision making.  In investment management, establishing and implementing a disciplined process avoids the frailty of emotion and provides a platform for learning

Sign up for value investor digest

  • “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