(GuruFocus, July 28, 2009)Investment Guru Mason Hawkins, Chairman and CEO of Southeastern Asset Management Inc. published 2Q09 letter to shareholders of his Longleaf Funds. Here are my notes:
Flagship Longleaf Partners Fund returned 26.6% during the quarter. Longleaf Small-Cap Fund returned 21.4%, International Fund returned 24.0%. The quarterly returns are at or near historical highs. Unfortunately, to make up for the miserable return of 2008, these returns “must be repeated”.
Hawkins takes a contrarian view of the negative invesment sentiments that is prevailing. To him, investors' low expectation of the future return of stock market and business managers' low expectation of future operation results are results to be more optimistic of future performance.
Even with the recent market run up, Hawkins believes that the great returns over the last three months are only a partial reflection of what the future holds. He uses a proprietary Price-to-Value ratio to evaluate the investment worthiness of his holdings. According to him, the P/V ratio in his holdings grew from an extremely low of 30% to a still very low 45% to 50%. According to him, even the prices of his holdings reach one time of estimated value, his portfolio will be doubled
Hawkins thinks his portfolio will also deliver a double digit growth in value because the businesses will gain market share in recession, because the management of the companies are capable, and because the his value estimate is based on very depressed 2009 financial result.
Click to read the complete letter.
Also check out:
Flagship Longleaf Partners Fund returned 26.6% during the quarter. Longleaf Small-Cap Fund returned 21.4%, International Fund returned 24.0%. The quarterly returns are at or near historical highs. Unfortunately, to make up for the miserable return of 2008, these returns “must be repeated”.
Hawkins takes a contrarian view of the negative invesment sentiments that is prevailing. To him, investors' low expectation of the future return of stock market and business managers' low expectation of future operation results are results to be more optimistic of future performance.
Even with the recent market run up, Hawkins believes that the great returns over the last three months are only a partial reflection of what the future holds. He uses a proprietary Price-to-Value ratio to evaluate the investment worthiness of his holdings. According to him, the P/V ratio in his holdings grew from an extremely low of 30% to a still very low 45% to 50%. According to him, even the prices of his holdings reach one time of estimated value, his portfolio will be doubled
Hawkins thinks his portfolio will also deliver a double digit growth in value because the businesses will gain market share in recession, because the management of the companies are capable, and because the his value estimate is based on very depressed 2009 financial result.
Click to read the complete letter.
Also check out:
