Friday File: Value Investor Conference

Checking in from Omaha

The Value Investor Conference in Omaha, hosted by the business school at the University of Nebraska-Omaha, is not like most investment conferences — there are a few presenters who speak about specific ideas that they find compelling, and some of them go into detail on those as a way to explain their thought process, but many more of the presentations are about Buffett and how Buffett thinks and about how we should think about companies and investments and how to maintain your world view as a fundamentals-focused investor… particularly in a world that has been very, very cruel to most traditional “value” investors since 2009, in a market that has rewarded growth to an almost absurd degree and in which active investment managers have utterly failed, as a group (or at least, 80% of them have failed) to beat the broad market as the indices have surged.

So a lot of the value of being here is psychological, frankly — a reassurance that in a world of constant change there is value in being patient and disciplined. These are not easy things for me, I may be a patient holder of stocks but I tend not to be a patient buyer of stocks — I have a hard time waiting for stocks to get cheap, because I read so much and follow so many investments that I want to act.

Tom Russo of Gardner Russo, who was at the Sequoia Fund for a while many years ago and is an extremely successful long-term money manager, gave the opening keynote address and presented a lot of interesting ideas and notions, particularly about the opportunity for global brands to expand into “white space” in emerging economies where those brands are still aspirational, with long-time holdings like Pernod Ricard or Nestle, but the most shocking thing he said was that he did not add a single new stock to his portfolio from 2010 until January of 2015 (that stock was JC Decaux, a family-controlled billboard company, trades at JCDXF OTC in the US — and it shot up late this week, perhaps partly because Russo mentioned it to this small conference… though he paid a lot less than the current price because they bought from insiders who needed to sell a block).

Most investors, public commentators, or money managers simply cannot be that inactive. They feel the need ...

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