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Francis Chou:The Investment Guru That You've Never Heard Of; Comments on ABH, WPI, BAC, BRK.A

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Rating: 4.4/5 (76 votes)


Yswolinsky - 5 years ago    Report SPAM
Besides being an inspiration and great investor, he is the nicest person you will ever meet. He manages ~$1billion (solo) without any analysts, and he still makes time to talk to anyone who wants, to ask questions.
Tkervin - 5 years ago    Report SPAM
Very nice article, thank you. I truly appreciate this type of story.
Warner13 - 5 years ago    Report SPAM
Good article.

Davidm1 - 5 years ago    Report SPAM
Excellent article! Thank you for finding this value investor. Reading his annual report now- will be bookmarking his site.
Kfh227 - 5 years ago    Report SPAM
He and I share one commonality about the environemnt right now:

"In equities, we believe the financial, retail and pharmaceutical sectors are undervalued"

Retail is hit and miss. Some of retail is grossly undervalued but most is not. As a side note, I would never have bought it but has anyone looked at Pier 1 stock performance over the past few years. Wow. Anyways, I don't think buying a basket of retail stocks is a good idea.

He is surprisingly transparent in his discussion of current holdings. Not sure if I would be that open if I were in his shoes. For that, I think him greatly.

can anyone explain AbitibiBowater to me? I looked into it once and tossed it i nteh to hard category. Knowing that Prem Watsa bought it means there is probably some hidden value or catalyst. This one has me totally baffled, thus why i have not bought it.

I should add that I know that they do wood prodcuts for residential construction. Is that the thesis?
Appooj - 5 years ago    Report SPAM
Have spoken to Francis Chou. Amazingly straightforward & unassuming over the phone. Clearly intelligent and confident. It's the only mutual fund I invest in because it has the freedom to buy when equities are cheap and sit on cash at other times. Plus, he's allowed to buy whatever he thinks is a good deal and is not restricted to a particular region of the world or sector. In addition his MERs are low. I also like the idea that he runs an investment fund not a trading fund. He charges a 2% redemption fee for funds withdrawn before 2 years and the entire fee goes back into the fund for other investors rather than a managament fee for him.

Most amazing to me is that he has chosen to wave the manger's fee (most of the MER) for his Chou Europe Fund for the next 3 years!! He's done this because the fund has not performed well at all for the past few years. Has anyone ever seen a mutual fund company wave their fees because a fund underperformed?? Believe he did the same thing with Chou Bond for a while.

My biggest source of dissatisfaction with Francis Chou is his very very low profile. His website is antiquated given that we are in a technology age in 2011 - never changes except for the annual and semi-annual letter to investors and an updated table every 3 months on stock holdings. He hold no public information sessions for investors, has no presence in media and does not write a monthly letter or use his website to comment on current events as related to finance. I'd like to have more access to him. However, that's his style, he's not going to change and he uses that same confidence and discipline in choosing his investments.

He clearly has close ties to Prem Watsa. The circumstances of their separation are unclear to me. Amicable or not? I note that he has never bought FFH for his funds.

He's had huge profits recently with ABH (he held their bonds when they were dirt cheap), King Pharmaceuticals & International Coal group I believe. He's down a lot with Nokia. I love the idea of the bank warrants. Those are deals that an individual retail investor like myself really wouldn't have been able to jump on. He bought BP a little prematurely but he has held on and done fine with it.

Glad to see some discussion at least on this website about Francis Chou.

DfiinancialH - 5 years ago    Report SPAM
"...or a one-time special dividend that may reduce the strike price on the stock warrants if this provision applies"

I know that these warrants just consider regular cash dividends for downward adjustments on the stock price so I can't understand about this special dividend thesis...Am i Wrong?Does anybody of you have a clue about it?Does special dividends count?
Batbeer2 premium member - 5 years ago
>> His website is antiquated given that we are in a technology age in 2011 - never changes except for the annual and semi-annual letter to investors and an updated table every 3 months on stock holdings.

What's your opinion of Berkshirehathaway.com ? ;-)
Superguru - 5 years ago    Report SPAM
It is good he is not wasting time and money on building state of art website or hiring useless social media experts and consultants. He is focusing on results.
Appooj - 5 years ago    Report SPAM
true. BRK may not have a flashy website, but berkshire hathaway has ample ample coverage & Warren Buffett is in the news and conveying his thoughts all the time. His annual meetings are legendary. Francis Chou has no annual meetings and the annual letter is a lot shorter and less far ranging than BRK. Plus, there's a new book out on Buffett every couple of years.

Agree he is focusing on results. However, to gather and keep investors it would be fruitful to be a little more interactive. Regardless, he's had great results and a sound philosophy. I'm comfortable keeping a substantial portion of my wealth with him.

Superguru - 5 years ago    Report SPAM
Looks like one has to be an "accredited investor" to invest in Chou funds.
Adib Motiwala
Adib Motiwala - 5 years ago    Report SPAM
He has public mutual fund in USA as well _http://www.chouamerica.com/

Fareastwarriors - 5 years ago    Report SPAM

1.5% expense for an income fund is very steep...

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