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Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: guruhl (IP Logged)
Date: July 17, 2012 10:18AM

GuruFocus welcomes renowned investor Mason Hawkins for an interview in which he will be answering readers’ questions. To ask your question, post it in the comments section below.

Mason Hawkins is chairman and chief executive officer of Southeastern Asset Management Inc., an investment advisory firm with $34 billion in assets under management. At Southeastern, he and his team seek to achieve long-term absolute returns with minimum risk in their portfolio of 18-22 businesses, focused on their best ideas.

These are Southeastern’s long-term beliefs:

- Long-term investment horizon provides opportunity for "time horizon arbitrage."
- In-depth, conservative business appraisals underpin all decisions.
- Stock price volatility offers opportunity.
- Margin of safety determines entry and exit limits based on price-to-value ratio (P/V).
- "Cheap" is not enough – sustainable competitive advantages that lead to value growth are equally critical.
- Corporate management's capability, incentives, and business decisions greatly impact our outcome.
- Concentrating in the 18-22 most qualified opportunities adequately diversifies, reduces risk, and improves return.
- Bottom-up, benchmark agnostic portfolio construction enables superior returns by owning only the highest quality, most discounted businesses.

Mason aims for a target return each year of 10% or more plus inflation. Since inception, his fund has beat the S&P 500 1186.85% to 729.75%, but more recently lagged, losing 5.64% compared to a gain of 5.45% of the S&P 500 in the last year.

In addition, he uses a valuation metric called the “price-to-valuation” ratio to measure the value of a company compared to the price the market has placed on it.

Holdings

Southeastern is the largest shareholder of Chesapeake Energy (CHK), the embattled energy company whose CEO drew criticism earlier this year for controversial business practices. Hawkins, along with investor Carl Icahn, have since pushed for and achieved significant changes at the company. They now believe that the company has the best board they have seen, along with the best physical assets they have owned, which makes them enthusiastic about keeping CHK as a core fund holding.

Company
Dell Inc. (DELL)
Chesapeake Energy (CHK)
DirecTV (DTV)
Loews (L)
Walt Disney (DIS)
Aon Plc (AON)
The Travelers Companies (TRV)
Level 3 Communications (LVLT)
FedEx (FDX)
Bank of New York Mellon (BK)

Learn more about Mason and his views on the present economy in his second-quarter letter here. See his portfolio here.

To ask Mason your investing question, post it in the comments section below. We’ll be publishing the answers soon.




Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
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Rating: 3.8/5 (20 votes)



Re GuruFocus Interviewing Mason Hawkins of Southeastern Asset Management Ask Your Question Now
Posted by: pescobar (IP Logged)
Date: July 16, 2012 11:22PM

HRT PARTICIPACOES EM PETROLEO has gone from 24 to 36 R$ after the IPO to 5.78 R$. losing 84% of its market value from it´s high. Considering the margin of safety with which LongLeaf invests, how much of the loss is permanent impairment of capital and how much is paper loss? If there is permanent impairment of capital, what were the mistakes made in the investments. If the thesis hasn´t changed why haven´t you added heavily to this investment do to the bargain that it would theoretically represent at this price.
The same questions apply to the ACS story.

Thanks!!!



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 1.0/5 (1 vote)



Re GuruFocus Interviewing Mason Hawkins of Southeastern Asset Management Ask Your Question Now
Posted by: pescobar (IP Logged)
Date: July 16, 2012 11:22PM

HRT PARTICIPACOES EM PETROLEO has gone from 24 to 36 R$ after the IPO to 5.78 R$. losing 84% of its market value from it´s high. Considering the margin of safety with which LongLeaf invests, how much of the loss is permanent impairment of capital and how much is paper loss? If there is permanent impairment of capital, what were the mistakes made in the investments. If the thesis hasn´t changed why haven´t you added heavily to this investment do to the bargain that it would theoretically represent at this price.
The same questions apply to the ACS story.

Thanks!!!



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 1.0/5 (1 vote)



Re GuruFocus Interviewing Mason Hawkins of Southeastern Asset Management Ask Your Question Now
Posted by: pescobar (IP Logged)
Date: July 16, 2012 11:22PM

HRT PARTICIPACOES EM PETROLEO has gone from 24 to 36 R$ after the IPO to 5.78 R$. losing 84% of its market value from it´s high. Considering the margin of safety with which LongLeaf invests, how much of the loss is permanent impairment of capital and how much is paper loss? If there is permanent impairment of capital, what were the mistakes made in the investments. If the thesis hasn´t changed why haven´t you added heavily to this investment do to the bargain that it would theoretically represent at this price.
The same questions apply to the ACS story.

Thanks!!!



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: rsheeley (IP Logged)
Date: July 17, 2012 10:41AM

will the presidential election cycle have a positive impact on the market this quarter?



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: vsmalik (IP Logged)
Date: July 17, 2012 11:00AM

What is your investment thesis behind DTV? In your letters, you have mentioned GAAP earnings understate the true earnings power because capex is comprised of subscriber acquisition costs, which is largely discretionary. Can this be interpreted to mean that if DTV did not acquire new subscribers and maintained somewhat of a "steady-state" business, the free cash flow would materially increase - the earnings power really show though - and the company could be conceptualized as more of a utility-type business? What do you think DTV is worth?



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: vsmalik (IP Logged)
Date: July 17, 2012 11:01AM

What do you estimate to be DTV's true earnings power and what do you think the company is worth? Do you see any future threat from Apple TV or other media?



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: vsmalik (IP Logged)
Date: July 17, 2012 11:02AM

How do you think about DTV in terms of competitive advantage and valuation?



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: vsmalik (IP Logged)
Date: July 17, 2012 11:04AM

Have you ever looked a Leucadia, particularly since it's trading at 80% of book value?



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Mason Hawkins of Longleaf Funds Answering Investing Questions Now
Posted by: vsmalik (IP Logged)
Date: July 17, 2012 11:05AM

Have you ever looked at buying Berkshire? If so, what do you think is the best way to value the company?



Guru Discussed: Mason Hawkins: Current Portfolio, Stock Picks
Stocks Discussed: DELL, CHK, DTV, L, DIS, AON, TRV, LVLT, FDX, BK,
Rate this post:

Rating: 5.0/5 (1 vote)



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