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You're welcome either to join in - just follow the registration link in my earlier post or in the March commentary - or share any last minute questions here. It looks like a fair number of folks have registered and I hope, in any case, you find it interesting.
Are you serious ? They hold just 7 stocks in the portfolio.
Do you mean why should they invest just in large caps when they have only $100M ? In other words, why not invest across all capitalization when the fund is small ?
Hey mrc, with a small fund, there are a lot of opportunities to be nimble. I looked at a couple of their old annual reports (to be fair I didn't look at every quarterly holding report) and I saw virtually no small or mid size companies.
Let's be honest. There have been a lot of great opportunities in the small cap area since 2009. There can't be one or two nonmega cap holding???
They answered (if I understood them correctly) that they invested in small cap stocks long time ago in their managed accounts, then they invested in emerging markets, and now - in large caps, so they do it by choice. Interestingly, even though their turnover is relatively low, they did make two large long term capital gain distributions in 2011 and 2012.
For what it's worth, I can't say I disagree that, by and large, mega caps have better valuations from historical norms vs small and mid, but it's a bit disappointing that only a few times have they jumped in to them since the fund opened. They do have OSH pfds (which was spun off from SHLD) I did find one small cap from 2009 - American Dairy, Inc. Well, that's good to know at least!
Overall, I like these guys. They seem smart and honest. Though, admittedly, I am disappointed they don't ferret out some unknown opportunities a bit more.
As you know, there are number of multi-cap fund mangers, who migrated to large caps. ARTKX and FPACX are two examples. They did that as they are more value there.
There could still be still be opportunities in small and midcaps but they are few and far between.
mrc, yes, I'm aware of that. But note, hat ARTKX and FPACX are multibillion dollar funds. They only have so many places to go! However, I looked through all of their reports on their site. Perhaps I missed something in them, but you don't think there was more a handful of opportunities that diligent managers could uncover since 2009 in less than megacaps? We've been in one of the biggest bull markets in history the last few years and there were an insane amount of wonderful companies in 2009. Large caps stocks tend to be priced fairly efficiently. Most of a new manager's out-performance tends to come with a low asset base.
Concur with you. I thought adding that comment about asset base too but was in a hurry. May be, these folks do not have bench strength to focus on muliple areas.
Perhaps different people have different expertise, and some can swim against the current. Managers of ARTKX say that emerging markets are overvalued, and they are very good at what they are doing. Meanwhile the manager of SIGIX, who is equally good, claims that those who say that emerging markets are overvalued does not know what they are talking about. And WAFMX makes 40% in the first year of its existence. Everybody says that small caps are overvalued, but then WSCVX and MSCFX rise like crazy...
Overvalued is nothing to do with short term performance. Over valued asset class can continue to perform exceptionally well like LG performed during tech bubble or Real Estate in 2007. All the Gurus are telling smallcap is in bubble (or over valued) and unless the bubble burst, we don't know if that is true. We would only know in the hind sight.
Comments
Regards,
Ted
http://www.cookandbynum.com/fund-information/performance/
Do you mean why should they invest just in large caps when they have only $100M ?
In other words, why not invest across all capitalization when the fund is small ?
http://www.cookandbynum.com/wp-content/uploads/2012/10/Quarterly-Letter-Excerpts_Full-Page_USE.pdf
Let's be honest. There have been a lot of great opportunities in the small cap area since 2009. There can't be one or two nonmega cap holding???
Thanks to whoever asked my questions!
David
Overall, I like these guys. They seem smart and honest. Though, admittedly, I am disappointed they don't ferret out some unknown opportunities a bit more.
Thanks andrei for being more brave than I! haha
ARTKX and FPACX are two examples. They did that as they are more value there.
There could still be still be opportunities in small and midcaps but they are few and far between.
May be, these folks do not have bench strength to focus on muliple areas.
All the Gurus are telling smallcap is in bubble (or over valued) and unless the bubble burst, we don't know if that is true. We would only know in the hind sight.
David