Francis Chou

Francis Chou

Chou Associates Management
Last update 2020-03-04 19 Stocks (0 new)
Value $172.00 Mil Turnover 0 %
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Francis Chou Profile

Francis Chou, the fund manager of Chou America Mutual Funds, has been managing the Chou Funds in Canada since 1986. Francis Chou's experience is an amazing success story of value investing. He came to Canada in 1976 at age 20 with $200 in his pocket. Without a college degree, he could only work on blue collar jobs. Finally he landed a job at Bell Canada as a telephone repairman. Somehow he was introduced to the books of Benjamin Graham. As written by Warren Buffett in his famous article, The Superinvestors of Graham-and--Doddsville, "It is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately to people or it doesn't take at all." The idea apparently took Francis Chou immediately. In 1981, together with six of his fellow telephone repairmen, Francis Chou started an investment club with $51,000. He left Bell Canada in 1984 and became a retail analyst at GW Asset Management, where he met Prem Watsa, the great future Fairfax CEO. He turned the investment club into Chou Associates Fund in 1986. The rest is history. If you had invested $10,000 in 1986, when Chou Associate Fund started to operate, that $10,000 would be worth $136,916 as of Dec. 31, 2010. During the 24 years of the fund's history, he had only five down years. Over the past 15 years, Chou Associate Fund average gained 13.6%, while the S&P 500 gained just 6.8% a year. When asked about what the most important things are for him in investing, he said: "Buy bargains. Get the returns slowly. Think independently. Don't be afraid of what other people are saying." This is exactly what he has done. In the 1990s, during the height of the tech bubble, Francis Chou wrote to his shareholders that he had "no concrete idea of where to proceed from here." He said the market at that time was a fool's game where investors were buying stocks trading at 100 times revenues in the hope of being able to to sell them for 200 times revenues a week later. His fund was down in 1999. As the stock market made its first crash from 2000 through 2002, Chou Associate Fund gained 71%. By 2006, his fund gained 160% while the broad market just barely broke even from its high at the beginning of 2000.

Francis Chou Investing Philosophy

"The investment process followed in selecting equity investments for the Funds is a value-oriented approach to investing. This involves a detailed analysis of the strengths of individual companies, with much less emphasis on short-term market factors. Far greater importance is placed upon an assessment of a company's balance sheet, cash flow characteristics, profitability, industry position, special strengths, future growth potential and management ability."
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Performance of Chou Associates Fund

Year Return % S&P500 % Excess Gain %
2019 1.29 30.58 -29.3
2018 -7.95 -4.57 -3.4
2017 3.8 21.7 -17.9
3-Year Cumulative (2017-2019) -3.20 (-1.08/Year) 51.65 (14.89/Year) -54.85 (-15.97/Year)
2016 -2.79 12 -14.8
2015 -6.95 1.24 -8.2
5-Year Cumulative (2015-2019) -12.44 (-2.61/Year) 71.96 (11.45/Year) -84.38 (-14.04/Year)
2014 12.06 13.46 -1.4
2013 41.33 32.31 9
2012 26.96 15.99 11
2011 -16.91 1.9 -18.8
2010 19.21 15.05 4.2
10-Year Cumulative (2010-2019) 74.35 (5.72/Year) 251.03 (13.38/Year) -176.68 (-7.66/Year)
2009 29.7 26.35 3.4
2008 -29.3 -36.79 7.5
2007 -10.22 5.15 -15.4
2006 18.77 15.84 2.9
2005 13.7 4.83 8.9
15-Year Cumulative (2005-2019) 93.84 (4.51/Year) 257.98 (8.87/Year) -164.14 (-4.34/Year)
2004 9.02 10.7 -1.7
2003 3.57 28.18 -24.6
2002 29.99 -21.58 51.6
2001 21.44 -11.76 33.2
2000 8.37 -9.75 18.1
20-Year Cumulative (2000-2019) 274.42 (6.82/Year) 217.22 (5.94/Year) 57.20 (0.88/Year)
1999 -9.63 20.38 -30
1998 23.22 28.69 -5.5
1997 40.31 33.49 6.8
1996 22.69 22.5 0.2
1995 31.01 38.06 -7.1
25-Year Cumulative (1995-2019) 840.29 (9.38/Year) 1009.46 (10.10/Year) -169.17 (-0.70/Year)
1994 -2.58 0.38 -3
1993 16.19 10.08 6.1
1992 20 7.62 12.4
1991 23.25 30.47 -7.2
1990 -10.68 -3.1 -7.6
30-Year Cumulative (1990-2019) 1306.04 (9.21/Year) 1568.00 (9.83/Year) -261.96 (-0.60/Year)
1989 18.7 31.69 -13
1988 14.27 16.61 -2.3
1987 5.02 5.1 -0.1

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