It is your job to pick fund managers, not mine. My one free piece of advice, however, is to find someone who is clear about their own area of excellence.
When you ask them how they generate excess returns, the answer should be extremely clear. And whatever it is that particular fund manager is good at, they should stick to it.
If you want a good example, watch this interview with Leah Zell from Lizard Investors. It was my favourite interview from our panel at the recent Sohn Hearts and Minds conference. I’m sure you will enjoy it.
https://www.youtube.com/watch?v=73MqcYmqa4k
The rest of the interviews are on the Forager Youtube page.
She comes across as someone who doesn’t like to pissfart around, knows exactly what her strengths are and where she wants to play and not to play.
Great to see female fundies out there leading the way.
She certainly makes all the right sounds. But there is a world of difference between making the right sounds and actually having genuine alpha.
Of the offshore fundies in this conference, Howard Marks is the only one that I’d consider to be redoubtable.
I agree. There is also a fine line between being sticking to what you feel good at/comfortable with, and merely being a consensus thinker. Notice she lists valuation last in terms of what she looks for, and also basically said she avoided financials and russia at any price. That was a consensus view – no one felt comfortable in these areas – and that is why russia and financials offered some of the best value opportunities in the world this year, and have made investors a lot of money.
In my view the best investors put valuation first, and are flexible and pragmatic. Those that reel off a list of ‘good company’ factors they look for, in industries everyone likes to invest in, may sound good, but often the results are mediocre.