|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
Bloomberg Q&A with Chuck Akre
Posted by: Holly LaFon (IP Logged)
Date: August 31, 2012 10:28PM
Chuck Akre, manager of the Akre Focus Fund, believes that high unemployment, tight credit and rising food and energy costs will put a damper on consumer spending. Yet his fund’s largest holding, at 9.7 percent, is MasterCard Inc. (MA), the consumer credit card-servicing giant. The reason? Akre sees a growing trend towards paperless transactions, which he says will pay-off for MasterCard over the long-term.
Such thinking serves Akre’s fund well. The fund’s 23 percent return over the past year has bested 99 percent of its peers in the mid-cap growth fund category and done so with less volatility than the stock market. The Akre Focus Fund got its start in August 2009. It owns 29 stocks, with 70 percent of its $1 billion in assets in its top 10 positions -- mostly holdings of large and midsized companies. While Akre's fund is relatively new, he managed the FBR Focus Fund from 1997 through 2009, delivering a 12.4 percent annualized gain, compared to a 4.4 percent return for the S&P 500-stock index over the same period. Lewis Braham recently spoke with Akre who is based in Middleburg, Virginia.
Q: What is your outlook for the U.S. economy?
A: In the U.S. today, unemployment is over 8 percent. If you look at unemployment numbers that include those no longer collecting unemployment benefits and those who have given up looking up for jobs, the real unemployment level is somewhere in the mid-teens. With an economy where gross domestic product is two-thirds driven by consumer spending, you can’t have robust growth with that level of unemployment. Also, access to credit is improving, but it’s still not like it was in the 1990s or 2000s. Third, the experience of 2008’s credit crisis put people on guard and they do not want to have as much leverage as in the past. Those circumstances define a more difficult environment. We've used the phrase, “the constrained consumer.” Periodic increases in food and energy costs exacerbate the problem.
Guru Discussed: Chuck Akre: Current Portfolio, Stock Picks
Stocks Discussed: MA,
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.