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Ask Chuck Akre Questions

January 16, 2010 | About:
guruek

guruek

80 followers
(GuruFocus, January 16) We have been invited to participate in a interview with Investment Guru Chuck Akre.

Chuck Akre started to manage mutual fund in 1997, and recently he left FBR Focus Fund and started his own fund - Akre Focus Fund (AKREX) in September 2009. The fund has only four months of history, it is too short to tell for now.

But investors into the fund should feel at peace as Akre carried an outstanding track record with him: his previous fund, FBR Focus, returned about 10% per year on average and carried a 5-star rating from Morningstar, beating the S&P 500 during the time under his management.

GuruFocus data shows that as of September 30, 2009, he manages about $280 million very highly concentrated among 20 stocks. His actual AUM might be more that as we do not count his cash and debt positions. Top five stocks are: American Tower Corp. (AMT, 15.04% of portfolio), Enstar Group Ltd. (ESGR, 13.31%), Markel Corp. (MKL, 12.53%), Penn National Gaming Inc. (PENN, 11.19%), and O'Reilly Automotive Inc. (ORLY, 9.65%).

The stocks are highly concentrated in two sectors: Financials and Consumer Services.

Industry2009-06-302009-09-30
Technology13.9%15%
Financials26.7%39.9%
Utilities0.4%%
Consumer Services49.9%44.2%
Consumer Goods3.4%%
Industrials5.6%0.6%
Oil & Gas0%0.1%


In selecting his investment ideas, Akre uses a "three-legged stool" approach:

The first leg is examining business models of companies that have a history of generating above-average rates of return. The fund's historical threshold is about 20%, but in the current market environment he'll consider returns in the upper teens.

The second leg of the stool is studying management teams to see if they have a record of acting in the best interest of shareholders.

The final leg, which looks at reinvestment opportunity. He wants a company to be able to reinvest its capital in a way that it allows it to earn unusually high rates of return.

Watch this recent Morningstar interview in which Chuck Akre discussed his investment approach:




The interview will happen on January 27. GuruFocus users can submit their questions by commenting on this post.


Rating: 2.9/5 (9 votes)

Comments

Gangstarr
Gangstarr - 4 years ago
MKL is a large position for your fund. Please discuss your long term outlook on the corporation. Do you think that MKL is a "Mini BRK?" Is this a holding that can compound close to 15% or more for the foreseeable future if puchased at an attractive price?

buddy1
Buddy1 premium member - 4 years ago
I noticed you have a position in MBRG. What is your outlook for the company and an estimate of its intrinsic value? Is this a holding that could compound at close to 15% for the foreseeable future, if purchased at the current price ($13.40)?

thanks.
kfh227
Kfh227 premium member - 4 years ago


I've recently been considering a checklist for investing. I was wondering if you use a checklist and if so, what checks are the most important ones?
Ranni
Ranni - 4 years ago
Dear Chuck,

I would like to ask; why you are fading away from 'traditional' value investing principles, and moving toward market timing approach?

*"Chuck Akre: We are prepared to miss some rallies, rather than to expose our capital to greater losses. We believe there are many great investment opportunities now, but allow that the perception of risk is higher because the consequences of risk taking just came home to roost!"

tgihotels
Tgihotels - 4 years ago
WOULD ADVISE PENN NATIONAL,VEGAS PRICES HAVE BOTTOMED.

WWW.TGIHOTELREALTY.HTMLPLANET.COM

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