With Warren Buffett at Berkshire Hathaway, Murray Edwards at Canadian Natural and Ensign, Charlie Ergen at EchoStar, Eddie Lampert at Sears, and other all-star owner/ managers, the Fund has never been blessed with so much talent—and we are searching for more.
Because bargains are usually found among securities out of favor, stressed industries attract us like children to a locked cabinet. Accordingly, we have pried open the residential housing industry. While not drawn to most homebuilders, whose business models we find unattractive, we have identified two related businesses that seem overly depressed by current conditions, Mohawk Industries and USG. Both have the talented anagers, free cash flows, and strong balance sheets necessary to take advantage of others’ pain. Hopefully, the current residential construction downturn has not seen its nadir. The worse it gets, the better we’ll do down the road.
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Because bargains are usually found among securities out of favor, stressed industries attract us like children to a locked cabinet. Accordingly, we have pried open the residential housing industry. While not drawn to most homebuilders, whose business models we find unattractive, we have identified two related businesses that seem overly depressed by current conditions, Mohawk Industries and USG. Both have the talented anagers, free cash flows, and strong balance sheets necessary to take advantage of others’ pain. Hopefully, the current residential construction downturn has not seen its nadir. The worse it gets, the better we’ll do down the road.
Read the complete letter
Also check out:
