Value Invest London

June 2016

Welcome to the 26th edition of Value Investor Digest

In this edition we feature the London Value Investor Conference overview video, a Barron’s article featuring six of the sixteen stock picks from the LVIC 2016, an Investment Week article on the rebirth of Value Investing, four audio interviews with conference speakers; plus an FT article critical of Microsoft’s recent acquisition of Linkedin.

London Value Investor Conference 2016 – Click Here for Overview Video
Now firmly established in the institutional investor calendar, the fifth conference once again broke records. Over 450 investors gathered on the 26th May to listen to and meet some of the great value investors including Howard Marks, Jean-Marie Eveillard and James Montier – as well as many other investors.

This year we also held the Peter Cundill Foundation dinner in aid of the Children’s Rights Division of Human Rights Watch, which took place in the Palace of Westminster; David Feather presented a Lifetime Achievement Award to Jean-Marie Eveillard and the Hon. Jacob Rees-Mogg MP also spoke at the dinner. Photos from both the LVIC 2016 and Dinner are now available on the conference Facebook page.

Asia Value Investor Conference 2016
The second Asia Value Investor Conference will take place at the Four Seasons Hotel in Hong Kong later this year – it will be a fantastic conference and we will announce the speaker line-up shortly. If you would like to receive updates about this conference then you need to Sign-up. There’s also an Overview Video of the inaugurual Asia Value Investor Conference which took place last year.

Barron’s Article on the London Value Investor Conference
Jonathan Buck is Europe Editor of Barron’s. He wrote this article which touches on the comments made by Howard Marks at the conference on oil investments and social media stocks. The article also features some of the investment ideas presented at the conference including Ryanair, Ocado, Royal Bank of Scotland, Elekta, Perrigo and Easyjet.

Contrarian Investor: The Rebirth of Value Investing?
David Stevenson wrote about his curiousity as to why some regard value investing as distinctly contrarian. “What is not to like about a set of beliefs that emphasises the sense of buying a quality business at a decent price? The article discusses contrasting approaches taken to value investing among delegates at the conference and concludes by saying that at some point in the future “the investing masses, angry with wilting pension pots, will demand a revolution in stock analysis, emphasising capital discipline, corporate alignment and sustainably growing businesses over the long term.”

Four Podcast Interviews with London Value Investor Conference Speakers
David Stevenson attended the LVIC 2016 and sat down with four conference speakers for extended interviews after each of these speakers had made their presentations – these interviews were subsequently published in the Financial Times and Investment Week. If you attended the conference and listened to the speakers, these interviews serve as great follow ups to the presentations given on the day.

Perverse Incentives Lie Behind Microsoft’s Linkedin Purchase
This FT article on Microsoft’s recently announced acquisition of Linkedin is critical of CEO Satya Nadella for poor capital allocation discipline – but equally critical of the “lavish equity incentives that investors have heaped upon his plate…designed to encourage Mr Nadella to behave as if he’s running an Apple or a Facebook — tech companies that are at the forefront of consumer innovation. In fact, the business he is leading has more in common with HJ Heinz — the owner of a stable of familiar and highly cash-generative staple brands”. If the author of the article is correct then Nadella might not be first in line for a nomination for a Best CEO Capital Allocator award from LVIC delegates next year. The article concludes with a comment about the Warren Buffett approach to this subject – many conference presenters have spoken about capital allocation discipline in their presentations since the LVIC started in 2012 – for further reading on this here is a Metropolis Capital article written in 2012.

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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