As always, Bill Nygren is the first among our gurus to release his shareholder letter and holdings. His biggest news for the last quarter was that he urged the Board of Knight Ridder to consider selling the company. He explained how he relates to managements of his holdings.
He wrote: ¡°Sometimes, however, the CEO can¡¯t satisfy our concerns, and we end the private discussion convinced that our goals aren¡¯t aligned. When that happens, our first step is to evaluate how undervalued the stock is relative to other stocks we could invest in. If that undervaluation is similar to companies with better management, then we will usually sell the stock and reinvest the proceeds. But when the stock looks significantly more attractive than other investments, we will take further steps. When talking privately with a manager doesn¡¯t produce our desired result, our next step is to express our concerns privately to the Board of Directors. Only when that fails will we take the step of expressing our opposition to management publicly, as we did last quarter with Knight Ridder.¡±