One thing I learned from [Tiger Management's] Julian Robertson is the concept that there are no holds. Every day you're either willing to buy more at the current price or, if you aren't, you should redeploy the capital to something you believe does deserve incremental capital. I sometimes hear, “If my target price is $45, [...]
I've always believed that as an investor you have to be comfortable with a number of different valuation approaches and methodologies, and that part of the art of investing is to recognize which approach is most appropriate in different situations. The metric we tend to look at most frequently is sustainable free cash flow yield [...]
In an ideal world, I'd like to be more selective in the U.S. and take advantage of more opportunities outside the U.S. That will only happen if we have the bottom-up ideas that warrant a place in the portfolio. To increase our chances of finding those, we've changed how we organize our international efforts. I [...]
If I believed having 10 people rather than 52 would allow us to be more successful, we'd quickly make that transition. But with the specialization of the people we're competing against today, I think it's very difficult to have a meaningful edge without significant depth and expertise. We should know more about every one of [...]
Julian Robertson [of Tiger Management] was maniacal on the importance of management: “Have you done your work on management?” Yes, sir. “Where did the CFO go to college?” Umm, umm. “I thought you did your work?” He wanted you to know everything there was to know about the people running the companies you invested in.
Our entire investment team has had training in interview techniques and lie detection. I don't think you can spend too much effort trying to understand the quality of management at the end of the day, it's the most important investment criterion. I've learned over time that great management teams deliver positive surprises and bad ones [...]