Value Invest London

March 2015

Boyar Research reports
Boyar research, who has been providing independent research since 1975 is a sponsor of this year’s London Value Investor Conference. Boyar has generously agreed to provide VID readers with complimentary research reports. Please click on this link to download a complimentary report. One of the free reports is on BNY Mellon which is a dominant custody bank and investment service provider as well as the 6th largest asset manager globally. BNY Mellon shares have rallied 75% since Asset Analysis Focus last profiled the company in February 2012. Yet BK shares still trade at a reasonable 16x 2014E EPS and 1.2x book value. Importantly, Boyar believe BK is still drastically under-earning both versus its closest peers (margins ~300 bps below State Street) and versus upside in a higher interest rate environment.

Berkshire Hathaway Annual Report
This year, on the 50 year anniversary of Buffett’s investment in Berkshire Hathaway, Charlie Munger has also contributed to the annual report by spelling out his vision for Berkshire for the next 50 years.

1966 Buffett Partnership letter
Buffett starts by writing “Our war on poverty was successful in 1965. Specifically, we were $12,304,060 less poor at the end of the year.” This is a good letter which details Buffett’s views on  a number of issues such as diversification, the likelihood of a repetition of the partnerships 47.2% gain during 1965 plus Buffett also makes some comments on the textile mill they had started to buy in to a few years previously – which was of course Berkshire Hathaway.

Neil Woodford – BBC Hardtalk 30 minute interview
This Stephen Sackur BBC interview with London Value Investor Conference speaker Neil Woodford covers a variety of topics including the reasons for Neil’s stunning success as a fund manager, the skill sets that he thinks are important for managers and entrepreneurs, his thoughts on the Eurozone; plus Neil also comments on the lack of value for money that the fund management industry is providing to clients because many funds are “taking fees for active management and returning passive yields”.

Berkshire Hathaway in the post-Buffett world
This Economist book review of Larry Cunningham’s Berkshire Beyond Buffett: The Enduring Value of Values focusses on what might happen to Berkshire once Buffett stops tap dancing to work. The book itself will be of interest to many, although the article does an excellent job of summarising how the culture at Berkshire is shaped by Buffett’s values and why many shareholders hope that this will continue long after Buffett has departed.

Seth Klarman on energy stocks
Klarman recently said in his letter to investors that “Baupost wasted no time in redirecting additional investment team members into the energy area to sift through the carnage.” The Bloomberg article details changes in Baupost’s portfolio including in their positions in Antero, Cheniere and Micron Technologies.

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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