John Rogers Interviewed by David Rubenstein

John Rogers (Trades, Portfolio) founded Ariel Investments when he was 24 with $200,000. They manage $13.5 billion now, back up from $3 billion in the crisis. On Aug. 21, Bloomberg published an interview with this esteemed value investor.

Over the last 10 years, Ariel bought terrific bargains at irregular intervals. Rogers said he believes media is still cheap. Names he likes are Viacom (VIAB) and Madison Square Garden (MSG). Rogers also likes financial services companies like Lazard (NYSE:LAZ) or KKR (NYSE:KKR), and views these as very cheap.

Returns

• LAZ 30-Year Financial Data
• The intrinsic value of LAZ
• Peter Lynch Chart of LAZ

Over 36 years Ariel compounded at 11% per year. It is one of the rare firms that has a fund with a 36-year track record. Rogers thinks it can replicate that performance in the future.

His best deal ever was buying Royal Carribean (NYSE:RCL) at the bottom of the financial crisis. People thought there would never be cruises again. It went up 15x and still appears to be a huge bargain, Rogers said.

He is optimistic that the Madison Square Garden stock will too. Especially when the Knicks are good again and start winning championships.

Rogers doesn't use a computer. He doesn't use email. He has the internet on his phone.

Why give money to a stock picker?

There are talented money managers out there that can add value, he said. There are people out there who can outperform the market. They are hard to find, but it is worth the effort.

Recession risk?

Rogers is not worried about a recession. The Dow marched from 1,600 to over 11,000 over the last century through a depression and two world wars. Rogers likes to buy bargains but does not want to see a recession. Recessions are not great for America.

Disclosure: Long Lazard and KKR.

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