Kyle Bass Keynote: The Engtanglement | AmerCatalyst 2012

In October Kyle Bass gave his keynote presentation, The Entanglement, at the AmerCatalyst 2012 conference.  Bass touched on the US, Japan, China and of course the debt related issues.  He also spoke a bit about the housing shadow inventory in the Q & A, as well as where he sees some investment opportunities.

Here is the link for the video: Kyle Bass: The Entanglement




 h/t Frank Voisin

Bill Ackman: If You're So Smart, Why Aren't You Rich?

Embedded below is hedge fund activist Bill Ackman's 43 minute presentation that he did a little while back for the Floating University.  Initially students or those interested in the video had to pay to see it, but it was just released into public domain on Youtube in it's entirety   The title is "Everything You Need to Know About Finance and Investing in Under an Hour."  Hmmm...somehow I doubt Ackman covers everything, but he has proven himself to be one of the contemporary greats of the activist/value investment world.  Since you'll learn everything you need to know about finance and investing in under an hour, Ackman speaks in broad strokes, but still an educational way to spend some time gleaning insights from a Pro.

A sockless Bruce Berkowtiz interview at University of Miami

Bruce Berkowitz and Fairholme had a rough year in 2011 -to put it mildly- yet has significantly outperformed so far in 2012.  During 2011, Berkowitz continued to hold concentrated positions in AIG, Sears, and Bank of American which led him to dramatically trail the market.  In 2011, I noticed various talking heads proclaiming the Berkowitz had lost his touch, that he was reckless, and that he was so far under he could not liquidate his positions to meet fund redemptions.  Clearly he had lost his touch. Obviously he started taking stupid pills.  The pundits were right...wait a minute - no they weren't!  Berkowitz remained in his circle of competence, and continued to hold his positions which have produced a 36% return YTD.


Embedded below is a recent interview with Bruce Berkowitz at the University of Miami where he is the "Executive in Residence".  He speaks a bit about his General Growth Properties position, his charitable work at the Fairholme Foundation, and his work with the Secret Millionaires Club which creates cartoon webisodes to promote financial literacy for children.

Charlie Munger Talk at Harvard-Westlake from 2010

Charlie Munger is no doubt one of the greatest minds of today.  Not only an investor, but also a philosopher who I believe can be most likened to his role model, The Autobiography of Benjamin Franklin.

Munger's lessons in both life and investing are profoundly insightful.  As Charlie often says, it is much better to learn vicariously by studying the folly and triumphs of others, then emulating the appropriate behavior.  With that being said, another Mungerism comes to mind that I often remind myself of: A lot of folks ask for advice, but very few take it. 

  

Munger Talk at Harvard-Westlake

Cook & Bynum: A young fund doing all the right things

Embedded below is a recent interview by The Manual of Ideas with Richard Cook and Dowe Bynum of the Cook & Bynum Fund (COBYX).  The young managers both have prestigious prior experience working at Goldman Sachs and Tudor Investment Corp, respectively.  After reading the interview, I would not let age belie the duo's investment insight and process.  There are several traits exhibited in the interview that piqued my interest. Listed are some of the guiding tenants of the Cook & Bynum fund:

1. Astute subscribers to Munger's theory of Metal Models and building a mental latticework on which to hang one's ideas.
2. Buffett & Munger's belief in portfolio concentration - concentrating one's assets in one's best ideas.
3. Buffett & Munger's adherence to only working with the highest quality management with properly aligned incentives.   
4. Prefer to buy a great business at a fair price rather than a fair business at a great price.
5. Eating their own cooking.  The majority of their net worth is personally invested in the fund.
6. Ben Graham's landmark principle of investing with a Margin of Safety.

The interview below goes into more detail about their background, philosophy, and process.   I was a bit disappointed to see a 1.88% expense ratio, but hopefully that will go down as assets under management grow.  If Cook & Bynum stick to their guns as outlined in the interview, I would expected a very enviable long term track record. 


Manual of Ideas Interview With Cook Bynum With Disclaimers


Disclosure: this is not a recommendation to buy or sell any securities mentioned in this article or anywhere on this website. 

Graham and Doddsville Fall Newsletter 2012

The Fall edition of the Graham & Doddsville newsletter from Columbia Business School was released today.  The G&D letter is always a great read and this issue is no exception.  In this issue there are interviews with Joel Greenblatt, Jim Tisch, Royce Associates, as well as photos from the Graham, Buffett and Beyond dinner in Omaha with speakers Thomas Russo, David Winters and Mario Gabelli.


Graham & Doddsville - Issue 16 - Fall 2012_vFINAL2

Daniel Loeb Third Point Q3 Investor Letter

Embedded below is Daniel Loeb of Third Point's most recent letter to investors.  Loeb is one of the few who has continually outperformed the market through a value and activist approach, as well as shifting funds into credit markets when the risk is worth the reward.  Loeb shares his thoughts Third Point's foray in the EU debt markets, as well as giving some color on recent equity investments in Murphy Oil and AIG.

On AIG:
"...Treasury’s ultimate sale of its remaining 16% stake in AIG will serve as a critical catalyst for the company, allowing initiation of a dividend, a change in management’s compensation structure to a more standard incentive-based bonus payout model, and the removal of the overhang” of Treasury ownership. Given these multiple paths to value creation, we believe  AIG’s current valuation at ~10x consensus 2013 earnings and 0.5x pro forma tangible book value of $65 per share has significant upside from these levels."

Loeb also manages to leave investors with a few choice quotes from 2Pac and Boyz II Men to shed further insights on Third Point's logic.

Third Point Q3 2012 Investor Letter TPOI

Not so New

Keith Trauner and Larry Pitkowsky are the founders of the Goodhaven Fund (GOODX).  The fund is relatively new, but Trauner and Pitkowsky are not, having been integral parts of the team at Fairholme (FAIRX) with Bruce Berkowitz thru his finest years of out performance.  The interview linked below talks about their time at Fariholme, their philosophy and understanding of value investing, and the low down on some of their current favorite ideas.

The fund has put up decent numbers in its short existence, beating the S&P this year, though lagging a bit since inception in 2011.  Typically value will lag in a rising market as we have seen recently, but that is not all bad.  It is a sign that the managers have a clear cut value investment process that they are sticking to.  The true test will be in a significant market draw down.  If the GOODX managers truly invest with a Ben Graham-like margin of safety, then the fund's downside should be mitigated.  Furthermore, the managers have a significant portion of their personal wealth invested in the fund, so you can be assured that portfolio decisions are being made with shareholders best interest in mind. 


GOODHAVEN INTERVIEW






disclosure: this is not a recommendation to purchase any securities mentioned in this post or anywhere on the blog.  This blog strictly expresses the opinions of the author.

Recent commentary from FPA's Bob Rodriguez - "All In!"

"It is all about not underperforming the market or a benchmark, so don’t fight the Fed. Unfortunately, a strategy of following the Fed’s urging to take on greater risk will likely end in heartbreak. Should the stock market continue its upward march, both our clients and FPA’s portfolio managers will be tested. This is a time for discipline. Given that economic growth is languid at best and is likely slowing, the divergence between the stock market and economic reality cannot be sustained. One or the other has to adjust."
- Bob Rodriguez

Embedded below is Bob Rodriguez's latest commentary about the Fed's recent QE Infinity announcement.  That was a couple weeks ago, and the market's optimism about the maneuver is already fading.


all-in-commentary-9-2012BC714505E176

Howard Marks Oaktree Capital: It's all a Big Mistake

Howard Marks' latest memo: "It's all a Big Mistake" is an excellent read on the psychology of investor sentiment, the tendency to overshoot, or to improperly incorporate information into investment decisions.  Marks expands on a few points as to why investors tend to not buy assets that are cheap - or at least not enough of them:

• Bias or Close-mindedness
• Capital Rigidity
• Psychological Excesses
• Herd behavior

The link above is to Oaktree's secure website where the memo can be read in full or downloaded.   Marks is a excellent writer who possesses great skill and clarity in his memos which are sought out and read by his investing peers.  His recent book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing)is an excellent read that channels a clairvoyance nearly on par with Mr. Buffett.

"Active Management has to be seen as the search for mistakes."
-Howard Marks


FYI - I added a couple books to the "Worthwhile Investment Reading" page:

• The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing) 
• There's Always Something to Do: The Peter Cundill Investment Approach
• Competition Demystified: A Radically Simplified Approach to Business Strategy 
• Value Investing: From Graham to Buffett and Beyond (Wiley Finance)

PBS Wealthtrack - Richard Bernstein and Bill Wilby

Good episode this week with Richard Bernstein and Bill Wilby.  Wilby was Oppenheimer Global Portfolio manager for 10 years, which was the #1 ranked fund in its category for the duration of his tenure.  Bernstein made his name as Merill Lynch's chief investment strategist.  He was ranked in the top investment strategists by his peers for 18 years, 10 of which, he was ranked #1. 

 Wealthtrack is a weekly show on PBS, and for some reason, they consistently get some of the best investing minds around to interview.  They did reruns the previous two weeks, but hopefully they were busy taping new shows and needed some filler. 

A book and a Berkshire website hack

I just got this bad boy today.  I'm talking about the book, not the Vox amp.  The author Peter Bevelin also wrote the excellent "Seeking Wisdom", so I have pretty high hopes for this book.  "A Few Lessons for Investors and Managers" is a condensed easy-to-read essay version spanning all of Buffett's Berkshire Hathaway annual letters as well ask BRK's  "Owners Manual".

I would have posted a link to the Owners Manual PDF, but it appears that Berkshire's website has been hacked. 

The Vox is about 10 years old.  It is solid state with a pretty decent tremelo section built in.  I've always been a tube purist, but a while back for fun, I put my D*A*M Red Rooster
in front of it.  I had it pushing a mid 1960's 2x12 Fender Bandmaster cabinet.  Clearly this 15 watt 8-inch solid state combo is not designed for that, but man! - that Red Rooster lit up the transistors in the Vox.  Tons o' fuzzy distortion, plenty of volume.  A good time was had by all.


Both books mentioned can be purchased here:

http://www.poorcharliesalmanack.com/

or here thru Amazon: