Dear friends,
In response to a request from some of you folks, I'd promised to pursue information about the new FPA International Value fund (FPIVX). I've arranged to have breakfast next week with the manager and would be more than willing to pose questions to him on your behalf. If anything's been tickling your brain, let me know. Otherwise I'll pursue my standard sorts of questions.
It looks like a bit of time with the Artisan folks and with RiverNorth (they have something new brewing, it seems) is also on tap.
For what it's worth,
David
Comments
2. Lead us through an average day at the fund (I actually think this is kind of an interesting question that hasn't been asked.) In other words, walk us through an average day.
3. Are you seeing values in Europe? What are your thoughts on the current state of emerging markets?
Thanks, AJ
What is Mr. Bokota's age, investment experience, education, and lastly where are his funds invested. (Does he eat his own cooking??)
Thanks Gary
⇒ Bokota Bio
More info on Google, also.
2. Since you worked as an Analyst at Harris/Oakmark and the Oakmark International/Global funds have been gobbling up Japanese stocks for over a year now --- why have you taken a different path and stayed completely away from Japanese stocks?
3. What was your investment case/thesis for Brambles, G4S and Legrand? And why do you think the market has mispriced their stock?
4. Tell us about Turkey? Are there no companies there that appeal to you considering that they are based in Europe but do not face the financial/economic troubles of Western Europe? Would you say that Turkey interests you but in an indirect way? For example - you are invested in Diago and last year they purchased Mey Icki Distillery for $2.1B in cash and is Turkey's biggest spirits company, which holds an 80 percent share of the country's top-selling spirit categories. I guess you see that as a positive and an indirect way for you to invest in Turkey and take advantage of the health of that country versus most of Europe?
6. What typically creates opportunities for you to buy?
7. How do you create your list of potential buys?
8. Do you visit a lot of companies and is that face to face meetings important to you from a research/evaluation perspective?
9. What were your most important investing influences early on?
10. How do dividends play a role in your evaluation/consideration of a company?
11. What are your thoughts on Nokia stock which has been battered I believe over 80%. Is their stock not cheap enough and you believe this is a value trap? Balance sheet looks poor? Too much future uncertainties and competition in the mobile handset market?
12. Do you like investing in small foreign subsidiares of large multinational companies that trade separately from the parent company?
13. As a follow-up question to my earlier mention of Diageo (which you are invested in) - what do you think about their Balance Sheet? Meaning do you think the 7 Billion Euros of debt (last I heard) is a fairly safe amount of leverage for Diageo and is a non-issue?
14. What would be your investment thesis not to invest in Spain's Telefonica?
1) They had a great education at Oakmark, like Samra and O'Keefe
2) They are going to learn from FPA managers
Whereas the first option is possible, the second is not quite clear. I watched their presentation at FPA, and also a presentation of Romick from FPACX. Do I understand correctly that each FPA fund operates totally independently, there are no common discussions and mutual influences? My impression is that Oakmark funds operate differently: They have a pool of approved stocks, and managers of all funds discuss them together. More exactly, international funds are somewhat separate, but given the existence of global funds there, all of these people help each other and teach each other. This may explain why all Oakmark funds (except their liquidated small cap fund) were similarly successful. Meanwhile if at FPA all of them operate independently, then the managers of FPIVX will have lots of freedom to follow their best ideas, but not much of support.
In other words, can we expect them to be successful because they are a part of high quality FPA family? Or they simply bring their Oakmark experience but they are going to work without the Oakmark-type support? Or perhaps the picture that I have is too simplistic? The main issue is whether we should invest there because they learned a lot at Oakmark, like Samra and O'Keefe, or because they are going to benefit from the mixture of their own ideas and ideas of other talented FPA managers?
Similar to Samra and O'Keefe of Artisan Value and Global Value funds, Bokota worked at Oakmark previously as a international equity analyst.
2. What are your competitive edges over other well respected investment firms?
3. What are lessons you have learned in stock analysis, particularly those ended poorly in the portfolio? How will you use these experience to improve your future investment process?
4. Will FPA International fund invest in emerging markets directly? If so, will the fund attempt to gain exposure indirectly through countries which derive significant earning/sale from emerging markets? If not, where do you see investment opportunities today given the global situation?
5. If the fund is successful, will the management consider closing the fund in the future in order to protect the existing shareholders? If so, what asset level is considered too big?
I would expect that Romick either recruited them or at least endorsed them. However, he is not an international manager. When Samra and O'Keefe joined Artisan, there were other talented international managers at Artisan, which could partially contribute to their success. But I suspect that Bokota and his co-managers will work independently. In this case by investing with them we are going to make a bet on them, rather than on FPA.