Value Invest

July 2015

Volkswagen, Oracle, Lonmin Top Value Managers’ Picks
Jonathan Buck, Europe Editor at Barron’s attended the London Value Investor Conference this year and has written an article which features some of the investment ideas presented at the conference. These include Davide Campari-Milano, Regus, Volkswagen, Lonmin and Oracle.

Dark warnings about the impending sellside cull
This FT article starts with the premise that the only way to beat the market is to focus on markets which are under-researched. Whilst this premise is perhaps flawed, for many managers it might be true – partly because their stock portfolios have so many positions. The article goes on to argue that longer-term the current regulatory changes will be bad for the sell side analyst community and that a smaller sell side analyst community will be of benefit to active stock pickers.

Howard Marks latest memo – Risk Revisited Again
This latest memo returns to old themes about which Howard has written many times, including on page 8 where he repeats a graphic from his book “The Most Important Thing”, which provides a graph displaying his view on the real relationship between risk and likely return. There are also some new thoughts included in the memo, including on page 18 where Howard details some reasons why he considers risk control more important than usual at present.

Make a Beeline for the Tales of Woe Few Want to Hold
This James McIntosh article in the FT takes a look at the current environment for deep-value and contrarian investors, where there are “slim pickings for contrarians in developed markets”. It takes in some perspectives about where some investors are finding value today – although some of these areas would require the need for, as the author puts it “a strong stomach and the willingness to hold on when things go from bad to worse.”

The Chinese Stock Market: from Ugly Duckling to Beautiful Princess
Paul Scott wrote an article which summarised the presentation given by Dato’ Cheah Cheng Hye of Value Partners Group at the London Value Investor Conference. Paul referred to the presentation by Mr Cheah as “An absolutely fascinating lecture, challenging many of our preconceptions about China, which I’m very glad I attended”; it was certainly one of the highest rated presentations at the LVIC this year.

The Evolution of a Value Investor
Tom Gayner is President and Chief Investment Officer at Markel Corporation. He addressed Google employees recently to present his talk on “The Evolution of a Value Investor” which addresses his journey as an individual and value investor. Well worth listening to as Tom talks about characteristics of businesses he likes and doesn’t like.

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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