Marketfolly had a nice high level recap of the two days of the value investing congress. I particularly like getting ideas from managers with good track records who run concentrated portfolios. Picking the best high-conviction ideas from high-quality investors seems like a recipe for success.
Here are the recaps from each day (list or presenters covered below):
http://www.marketfolly.com/2011_05_01_archive.html
http://www.marketfolly.com/2011/05/value-investing-congress-summary-marks.html
Jeffrey Ubben (ValueAct Capital): This activist investor only makes 3 or 4 new investments each year and their average holding time is 3 years. ValueAct says that their biggest advantage in the markets is their ability to truly focus on the long-term. Ubben's newest position is in Motorola Solutions (MSI, Financial). Investors will recall that the former Motorola was split into two: MSI and then Motorola Mobility (MMI, Financial).
Claude Leveille (Courant Investment Management): Some years Leveille does as few as 3 or 4 trades, noting that he is extremely patient to wait for the fat pitches. Courant uses no leverage and only holds long positions. Courant currently has around 25% of assets in cash. Leveille has been buying South Korean equities and also U.S. large caps in the healthcare sector.
Michael Kao (Akanthos Capital Management): Sticking briefly with the theme of protecting from inflation, Kao recommended going long the Hong Kong dollar as a form of protection. He also mentioned that he learned an early lesson to be "long optionality" as a portfolio lined with asymmetric payoffs is a solid strategy.
Jonathan Friedland (Porter Orlin): Friedland's presentation focused on American value investors hunting for value abroad. His first idea was Droga Raia (SAO: RAIA3), a retail drug store operator in Brazil. His second pick was Coal India (BOM: 533278), a non-coking coal and coking coal producer.
Howard Marks (Oaktree Capital): Oaktree's funds currently have a lot of cash on hand as opportunities are not abundant; Oaktree seems to be doing more selling than buying these days. He also mentioned he thinks that most institutions over-diversify.
Steve Romick (First Pacific Advisors): Romick noted that enticing opportunities today are scarce and compared it to trying to ski in the middle of summer. The one pocket of snow he does see potential in is large cap stocks as he believes small caps are overvalued. Romick presented CVS Caremark (CVS, Financial) as a business with good tailwinds and a store footprint that's hard to replace. He says the company is undervalued, trading at a P/E of 12.2x net of the pharmacy benefit management (PBM) hedge.
Steve Leonard (Pacifica Capital Management): Pacifica focuses on picking good businesses, but more importantly places emphasis on not making mistakes since they run a highly concentrated book (typically with 10 or fewer holdings). They started buying Fairfax Financial (FRFHF, Financial) 10 years ago and today it's their largest position. Their second largest holding is Berkshire Hathaway (BRK.A, Financial).
Whitney Tilson & Glenn Tongue (T2 Partners): Their ideas centered on land companies: one long and one short. They provided an update on St. Joe (JOE) — their largest position — and said that the company had incentive not to writedown its developments because around $1 billion of its market cap was attributed to them
Here are the recaps from each day (list or presenters covered below):
http://www.marketfolly.com/2011_05_01_archive.html
http://www.marketfolly.com/2011/05/value-investing-congress-summary-marks.html
Jeffrey Ubben (ValueAct Capital): This activist investor only makes 3 or 4 new investments each year and their average holding time is 3 years. ValueAct says that their biggest advantage in the markets is their ability to truly focus on the long-term. Ubben's newest position is in Motorola Solutions (MSI, Financial). Investors will recall that the former Motorola was split into two: MSI and then Motorola Mobility (MMI, Financial).
Claude Leveille (Courant Investment Management): Some years Leveille does as few as 3 or 4 trades, noting that he is extremely patient to wait for the fat pitches. Courant uses no leverage and only holds long positions. Courant currently has around 25% of assets in cash. Leveille has been buying South Korean equities and also U.S. large caps in the healthcare sector.
Michael Kao (Akanthos Capital Management): Sticking briefly with the theme of protecting from inflation, Kao recommended going long the Hong Kong dollar as a form of protection. He also mentioned that he learned an early lesson to be "long optionality" as a portfolio lined with asymmetric payoffs is a solid strategy.
Jonathan Friedland (Porter Orlin): Friedland's presentation focused on American value investors hunting for value abroad. His first idea was Droga Raia (SAO: RAIA3), a retail drug store operator in Brazil. His second pick was Coal India (BOM: 533278), a non-coking coal and coking coal producer.
Howard Marks (Oaktree Capital): Oaktree's funds currently have a lot of cash on hand as opportunities are not abundant; Oaktree seems to be doing more selling than buying these days. He also mentioned he thinks that most institutions over-diversify.
Steve Romick (First Pacific Advisors): Romick noted that enticing opportunities today are scarce and compared it to trying to ski in the middle of summer. The one pocket of snow he does see potential in is large cap stocks as he believes small caps are overvalued. Romick presented CVS Caremark (CVS, Financial) as a business with good tailwinds and a store footprint that's hard to replace. He says the company is undervalued, trading at a P/E of 12.2x net of the pharmacy benefit management (PBM) hedge.
Steve Leonard (Pacifica Capital Management): Pacifica focuses on picking good businesses, but more importantly places emphasis on not making mistakes since they run a highly concentrated book (typically with 10 or fewer holdings). They started buying Fairfax Financial (FRFHF, Financial) 10 years ago and today it's their largest position. Their second largest holding is Berkshire Hathaway (BRK.A, Financial).
Whitney Tilson & Glenn Tongue (T2 Partners): Their ideas centered on land companies: one long and one short. They provided an update on St. Joe (JOE) — their largest position — and said that the company had incentive not to writedown its developments because around $1 billion of its market cap was attributed to them
