Ronald H. Muhlenkamp is the founder and president of Muhlenkamp & Company, Inc., and portfolio manager for the company's self-named mutual fund (MUHLX). Over the past 15 years, his fund has returned an average total return of 12.83%. In the same period, S&P 500 returned average 10.64% annually. Muhlenkamp is a patient value investor. The stocks in his portfolio stay an average of 10 years.
Investing Philosophy:
He is a value guru who believes that over time, stock prices do reflect the values of the underlying businesses. When picking stocks, he looks for companies with solid balance sheets, and a return on equity capital (ROE) of 15% or better. Although his methods change with inflation and interest rates, he currently looks for companies with a P/E ratio lower than the companies’ ROE and expected growth rates. He focuses on the long-term "Business of Investing" because he thinks that it is more profitable and more reliable. As a long-term investor, his "normal" position is to be 100% invested in corporate stocks.
Over the past two years in our newsletters and seminars, we’ve discussed three major topics: the recession, bailouts and the credit markets, and changes in the regulations and structure of the financial markets. More...
(GuruFocus, September 11, 2009) As we stated in the previous article on his top holdings, Investment Guru Ronad Muhlenkamp is a very patient investor. His average holding is over 10 years. He developed a formula to evaluate stocks 30 soe years during the 1972 to 1974 financial stock crisis, based on Graham and Dodd formula with a a few tweaks to reflect inflation and interest rate, and he has been using that since then. So said he in the book “Value Investing with Masters” by Kirk Kazanjian. More...
(GuruFocus, September 11, 2009) Investment Guru Ronald Muhlenkamp’s mutual fund Muhlenkamp fund took a beating lately. The newly available Guru Fund Performance Data shows he has been lagging the market for 2006, 2007 and 2008. That is three years in a row. Before this down period, Muhlenkamp beat the market typically by a large margin 6 years in a row from 2000 to 2005. More...
Ronald Muhlenkamp believes that the crunch is over, but he does not yet have conviction in what the new norm will be. He thinks that with ample capacity in every industry, maybe corporate ROE (return on shareholder equity) averages 11% instead of the historic average of 13 percent. Ron Muhlenkamp is heavy in technologies and healthcare. This is his Q2 portfolio update. More...
Ron Muhlenkamp's review of events that impacted the markets during the past quarter. "Most of the selling should now be completed, but if there is another round, it should occur in Q-1 ’09 as people respond to yearend statements and companies satisfy their auditors. Meanwhile, we think many of the specific fundamentals that drove the forced selling have been alleviated." More...
We like to invest in good companies when the price is right. We prefer stocks to bonds because we want management working for us as opposed to against us. There's two ways you can put money into a company. You can loan them money, in which case the management's job is to minimize your return. Or you can actually be an owner of the business, in which case their job is to maximize return. We like management working for us. More...
Ron Muhlenkamp shareholder letter: In 2005, the Financial Accounting Standards Board (FASB) issued FASB #157 which states that banks, insurance companies, and brokers must mark the value of the assets to market prices in their quarterly and annual reports. More...
Commentary of Ron Muhlenkamp: The pain continues. The focus has shifted somewhat from financial concerns to the price of commodities, particularly energy and food. More...
Ron Muhlenkamp likes to buy stocks when its p/e ratio is lower than the percentage of return on equity. His recent performances have been hurt by the housing slowdown. These are his buys and sells during the first quarter. Ronald Muhlenkamp owns 54 stocks with a total value of $1.4 billion. More...
Ron Muhlenkamp commentary: In the U.S., we’ve had ten recessions since WWII. In each case, the slowdown was triggered on purpose by the Fed, which acted according to its charter in containing inflation. But they also squeeze out the excesses of the prior expansion." More...
In 2007, we had a lousy year. The transition period we’ve been discussing for two years is lasting longer than we expected, and having greater negative effect on some of our companies than we expected. More...
Ronald Muhlenkamp's starting point for researching a stock is its p/e ratio is lower than the percentage of return on equity. His fund gained 13.79% a year during the past 15 years. His recent performances have been hurt by the housing slowdown. These are his buys and sells during the third quarter. More...
The U.S. economy and the capital markets continue to work their way through the transition period which we’ve been discussing for nearly two years. We continue to believe that the economy will experience a “soft landing,” not a recession. Our mistake has been to believe that the markets would have a soft landing as well. That has been true for some industries but not for housing and financials, of which we’ve owned too much. More...
The Federal Reserve’s interest rate actions would bring about a “soft landing” in the economy as opposed to a recession. Unfortunately what often occurs in these periods is that the stock market acts like a recession is imminent, even though the economy doesn’t. More...
Guru Ron Muhlenkamp's recent performances lagged the market, due to his large exposures to homebuilders. Over long term, he still beat the market by wide margains. He thinks now it is the ideal time to buy the good companies cheap. These are his buys and sells during the first quarter. Ronald Muhlenkamp owns 72 stocks with a total value of $2.7 billion. More...
A shareholder recently asked, “In light of last year’s performance, do you intend to take any action to modify the current investments in the Fund?” More...
Ronald Muhlenkamp's $2.4 billion Muhlenkamp Fund, which lost value just once in the past 12 years, is getting hurt by the shakeout in the U.S. mortgage market. More...
Ronald Muhlenkamp buys Fidelity National Information Services, Inc., Alaska Air Group Inc., Goodyear Tire & Rubber Co., Home Depot Inc., sells Dynegy Inc., EResearchTechnology Inc., GAMCO Investors, Inc., MasTec Inc., WYNDHAM WORLDWIDE during the 3-months ended 12/31/2006, according to the most recent filings of his investment company, Muhlenkamp Fund. Ronald Muhlenkamp owns 83 stocks with a total value of $3.4 billion. These are the details of the buys and sells. More...
2006 was a difficult year for us. Although our expectations on the economy were reasonably accurate (a soft landing), our expectations for the performance of some of our stocks were not. Specifically, we did not anticipate the degree and rapidity in which orders for new homes evaporated and the backlogs of homebuilders shrank. We also did not anticipate the repeat of unusually warm winter weather, causing the price of natural gas to fall dramatically. We have been encouraged by the action of the management of our companies. As their businesses slowed, they’ve used the resulting cash flows to buy in stock. We do think this will benefit us going forward. More...
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