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Hosted by Tano Santos, the David L. and Elsie M. Dodd Professor of Finance and faculty director of the Heilbrunn Center, in this podcast you will hear from some of the world's greatest investors, their views on the investment management industry, how they developed their investment process and how they see the field changing over time.
Connecting Theory and Practice through the 5x5x5 Student Investment Fund
Today’s conversation is with Tom Russo, the master of consumer brand investing, and two of our best students, Jeffrey Johnson '19 and Michael Allison '19. We’re talking about the 5x5x5 Student Investment Fund and having a deep discussion about some of the specific stocks in the portfolio. The concept for the 5x5x5 fund came out of Tom’s concern that conventional investment funds for students offered limited learning potential due to their short-term nature and was made possible by a generous gift given by him and his wife, Georgina.
The 5x5x5 fund is run by the students of the Value Investing course at Columbia Business School, with ideas being submitted by the students each year. Students then have the opportunity to connect value-oriented investment theories to real-world practice as they participate in the management of the fund. Importantly, they are also connected with alumni and are afforded valuable networking opportunities. At the end of five years, the inflation-adjusted original amount is invested back into the fund and any other gains will be used to support scholarships for traditionally under-represented members of the class.
On this episode, Tom, Jeff, Mike, and I discuss how the 5x5x5 Student Investment Fund got started, how this fund differs from student funds at other schools, what goes into the investment decisions, how participation in the fund benefits students, why some of this year’s investments were selected, and so much more!
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Taking a Top-Down Approach to Value Investing
Today’s conversation is with international value investor, Jean-Marie Eveillard. As portfolio manager of the Société Générale International Fund, later becoming the First Eagle Global Fund, where he returned an annualized 15% for over 25 years. In 2001, Jean-Marie and co-manager Charles de Vaulx were named Morningstar International Stock Fund Managers of the Year and later in 2003, Jean-Marie was chosen as one of the two inaugural awardees of the Morningstar Fund Manager Lifetime Achievement Award.
Shortly after starting as an analyst with Société Générale, Jean-Marie became exposed to Ben Graham and the principles of value investing. Despite his passion and insights, it was many years before he was given the position of portfolio manager and finally able to put those principles to work. During his tenure as portfolio manager, Jean-Marie has been at the helm during some of the most challenging times for value investors. His ability to adapt his investment approach to the changing conditions has been key in his ability to produce above average results.
On this episode, Jean-Marie and I talk about his changing roles over his years at Société Générale and then First Eagle, why he was so intrigued by Ben Grahams and Warren Buffet’s investment approaches, the lessons he learned about client management while his fund was underperforming compared to market, and so much more!
Investing with Curiosity:
Find out why investor Christopher Davis thinks the extreme disconnect between financial statements and the underlying reality of businesses matters.
Chairman of Davis Advisors, Christopher Davis oversees approximately $30 billion of client assets worldwide. On this podcast episode of Investing with Legends, Christopher and I talk about the importance of finding the right investing style for you, why he placed so much importance on developing a strong accounting foundation, why Wall Street needs to embrace globalization and his approach to assessing competitive advantage We also tackle managing a fund including working with family.
Christopher currently serves as CEO and Portfolio Manager and Davis Advisors an independent investment management firm and one which wholeheartedly embodies the basic principles of value investing.
Christopher received an early education from his father and grandfather who shared their passion and enthusiasm for investing and business with the family but when it came time to start university, he decided to go in a completely different direction. From veterinary school to seminary, Christopher took the long way around before settling into a career in investing. From his first job at the State Street Bank, Christopher quickly found his own passion and has thrived in the field for the past 30 years.
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Applying a Fundamental and Value Oriented Approach to Investing:
Today’s conversation is with investor David Abrams, who was described by the Wall Street Journal as a “one man wealth machine.” David is the CEO and Portfolio Manager of Abrams Capital, an investment firm that he founded in 1999. Abrams Capital is unlevered and long-term oriented and currently holds over $9 billion in assets under management. David is notoriously private and is not keen on interviews and appearances so I’m especially grateful to him for sharing with us today.
After graduating with a BA in History from the University of Pennsylvania, David made an unplanned entrance into a career in investing. It was then that he discovered his love for the field and he went on to work with another value investing legend, Seth Klarman of the Baupost Group, before starting his own firm. David is a member of the Board of Trustees of Berklee College of Music and an overseer of the College of Arts and Sciences at the University of Pennsylvania.
On this episode, David and I discuss how his experience working on merger and risk arbitrage transactions led to his decision to join the Baupost Group, what it was like to start Abrams Capital in the midst of economic uncertainty, why David prefers a generalist approach, the importance of the fundamentals in assessing investment opportunities, and so much more!
Overcoming Biases for Effective Decision Making:
Today’s conversation is with one of the finest intellectual investors and academic at heart, Michael Mauboussin. Michael is the Director of Research at BlueMountain Capital Management in New York and was formerly the Head of Global Financial Strategies at Credit Suisse and Chief Investment Strategist at Legg Mason Capital Management.
While rising to the top in his corporate career, Michael authored three books, including my favorite, More Than You Know: Finding Financial Wisdom in Unconventional Places, which was named one of the best business books by Businessweek and which features prominently in today’s show. Michael has been an adjunct professor of finance at Columbia Business School since 1993 and is on the faculty of the Heilbrunn Center for Graham and Dodd Investing. He is also Chairman of the Board of Trustees of the Santa Fe Institute, a leading center for multi-disciplinary research in complex systems theory.
On this episode, Michael and I talk about the early epiphany he had that set him on the path to Chief U.S. Investment Strategist, the importance of teaching value investing alongside psychology, the main contributors to investment bias, the importance of cognitive diversity, the top three techniques you can use to mitigate against bias in your investment processes, and so much more!
The All Important Power of Consumer Brands:
Today’s conversation is with the master of consumer brand investing, Tom Russo. Tom is the Managing Member of Gardner Russo & Gardner LLC, Partner at Semper Vic partnerships, and he oversees more than $9 billion through separately managed accounts and Semper Vic partnerships. Tom is also a board member of the Heilbrunn Center for Graham & Dodd Investing at Columbia Business School.
Growing up in Janesville, Wisconsin, home of the Parker Pen Company, Tom saw first-hand the impressive prospects of family-controlled consumer brand with global appeal. Since then, he has become well-known as the go-to person for all things consumer brands. Whether you’re wondering about the development of a beer business in Africa or the strategy for developing a brand in a new market, Tom’s three decades of experience has given him extraordinary insight.
On this episode, Tom and I dive into how he developed his investment philosophy, what he learned about investing during his early years before starting his career, the huge impact Warren Buffet had on his career and specializations, the main investment principles Tom follows, what you need to consider about a company before investing, why under-spending is a key risk factor Tom looks out for, and so much more!
Welcome to Value Investing with Legends:
Today’s conversation is with the legendary Mario Gabelli, the Chairman and Chief Executive Officer of GAMCO Investors, Inc., the firm he founded in 1977. A 1965 summa cum laude graduate of Fordham University's College of Business Administration, he also holds an M.B.A. from Columbia Business School, and honorary doctorates from Fordham University and Roger Williams University.
Since starting his firm Mario has been called “a prophet in the wilderness” by Forbes and strongly believes that the small, neglected stocks are where the money is going to be made in the future. With a focus on strong research and flexibility, it’s this foundation that has allowed the fund to successfully generate returns for clients even when facing a headwind in the market.
From his management technique to his investment rationale, Mario shares his perspective and strategies for maintaining positive results in an ever-evolving marketplace. On this episode, we talk about how Mario started out as a researcher, the benefits of a niche research focus, why it’s so crucial to build accumulated knowledge in your industries of focus, how Mario identifies investment and growth opportunities, and so much more!