Value Invest London

May 2012

May 2012     Issue 9

Berkshire Shareholders Meeting – 2012
So soon after Buffett’s remarkably candid announcement that he had been diagnosed with stage 1 prostate cancer, it was impressive to hear him and his 88 year old Vice Chairman, Charlie Munger, displaying their usual high levels of energy, acerbic wit and razor sharp analytical powers to handle the 6 hours of questions from shareholders and analysts. We have written up our highlights from the event, which you can read here.

Buffett starting out
This article published in Forbes magazine gives a fascinating insight into the choices Warren Buffett made when he started his first fund.

Interview with Charlie Munger
This 30 minute interview took place the day before the Berkshire shareholder meeting. The interviewer, Becky Quick is one of the panel of three journalists who choose (in their view) the best of the questions sent in for the shareholders meeting. Munger explains the opportunistic approach of Berkshire Hathaway and the importance of their business experience to their investment success (and vice versa), dismisses gold as an investment “civilised people don’t invest in gold, they invest in productive businesses” and comments on the dynamics of the macro economy and his enthusiasm for the two US presidential candidates (in spite of the “poisonous” state of US politics).

The causes and consequences of the European crisis
Whilst we are bottom up investors and retain a detachment from the market’s daily oscillations, driven by the next political sound bite from a European Head of State, we cannot ignore the potential ramifications of the current Eurozone crisis on a fundamental level for the companies we invest in. In this article, which was written in January, Jonathan Mills sets out our prognosis for the Euro and how this is shaping our investment strategy.

Value works – statistical evidence of the success of value investing – Michael van Biema, van Biema Value Partners.
This presentation from the London Value Investor Conference in April received excellent reviews from the delegates. Michael van Biema is the founder and managing principal of van Biema Value Partners, LLC – a fund of value funds. Michael was a faculty member of Columbia Business School from 1992 to 2004, where he taught an MBA course on value investing. He is the co-author of the book “Value Investing from Graham to Buffett and Beyond”. In this presentation, he sets out the statistical evidence for the long-term success of value investing and the underlying factors that drive this success.

The London Value Investor Conference – 2012.
This inaugural conference in London was an oustanding success.  The event competely sold out as 150 delegates came to listen to a very strong line up of presentations by value investors from both sides of the Atlantic.   Feedback from the event was universally positive and it was clear from the general buzz in the breaks and the evening reception that the London value investing community enjoyed the opportunity to gather. The conference raised over £10,000 for the SMA Trust, a children’s charity which supports vital research into finding a cure for Spinal Muscular Atrophy.

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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