David Rolfe, chief investment officer of the $1.3 billion investment management firm Wedgewood Partners Inc., is joining GuruFocus for a reader Q&A. Rolfe has also been a Premium Member of GuruFocus since 2007. Readers are welcome to submit their questions – regarding Wedgewood’s process, their personal investing or the economy at large – by entering them in the comments box below.
Over the past 15 years – Wedgewood’s preferred measurement range – it has beat the S&P 500 316.1% to 124.3%, cumulatively. A patient, focused and disciplined value approach has driven the superior performance.
As Wedgewood Partners’ managers explain in their third-quarter letter, they think so like business owners that they virtually ignore short-term market price fluctuations of their holdings and instead concentrate on “the long-term appreciation of equity, relative to the underlying growth of the business.” This inevitably results in an increase in equity value that reduces the risk of permanent loss of capital. In short, they “believe the philosophy of the business owner repeatedly trumps the whimsy of the easily influenced speculator.”
To find the right companies, they look for five fundamental factors in each prospect: 1) sustainably superior competitive advantage 2) compelling valuation 3) double-digit growth 4) exceptional financial strength and 5) limited overlap with existing portfolio holdings.
They are so selective about what they include in the portfolio that they don’t mind waiting, sometimes years, for companies they find attractive to finally exhibit all of these criteria before they invest.
Their overall investing strategy is summarized below:
Over the past 12 months, only two new stocks merited inclusion in the Wedgewood portfolio: Charles Schwab (SCHW, Financial) and Coach (COH, Financial).
Their largest holdings as of the end of the second quarter are Apple (AAPL, Financial), Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial), Google (GOOG, Financial), Express Scripts (ESRX, Financial) and Qualcomm (QCOM, Financial).
To learn more about David and Wedgewood Partners, read their recently released third quarter shareholder letter and outlook or visit their portfolio.
Don’t forget to ask David your question in the comments section below. Answers will appear shortly.
Sign up for a GuruFocus Premium Membership here.
Over the past 15 years – Wedgewood’s preferred measurement range – it has beat the S&P 500 316.1% to 124.3%, cumulatively. A patient, focused and disciplined value approach has driven the superior performance.
As Wedgewood Partners’ managers explain in their third-quarter letter, they think so like business owners that they virtually ignore short-term market price fluctuations of their holdings and instead concentrate on “the long-term appreciation of equity, relative to the underlying growth of the business.” This inevitably results in an increase in equity value that reduces the risk of permanent loss of capital. In short, they “believe the philosophy of the business owner repeatedly trumps the whimsy of the easily influenced speculator.”
To find the right companies, they look for five fundamental factors in each prospect: 1) sustainably superior competitive advantage 2) compelling valuation 3) double-digit growth 4) exceptional financial strength and 5) limited overlap with existing portfolio holdings.
They are so selective about what they include in the portfolio that they don’t mind waiting, sometimes years, for companies they find attractive to finally exhibit all of these criteria before they invest.
Their overall investing strategy is summarized below:
Over the past 12 months, only two new stocks merited inclusion in the Wedgewood portfolio: Charles Schwab (SCHW, Financial) and Coach (COH, Financial).
Their largest holdings as of the end of the second quarter are Apple (AAPL, Financial), Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial), Google (GOOG, Financial), Express Scripts (ESRX, Financial) and Qualcomm (QCOM, Financial).
To learn more about David and Wedgewood Partners, read their recently released third quarter shareholder letter and outlook or visit their portfolio.
Don’t forget to ask David your question in the comments section below. Answers will appear shortly.
Sign up for a GuruFocus Premium Membership here.
