PenderFund

On June 28, 2018, the Pender Value Fund turned five. In the last of this three part series, David Barr and Felix Narhi, co-managers of the Fund, look back on the investment strategies and how they translated into some of the better ideas in the Fund. They discuss various holdings, their original investment theses, how they played out and ultimately, what they learned that they can use to drive future investments in the Fund. In their analysis of the winners and losers in the portfolio, David and Felix uncover two key themes - having cash on hand during firesales and focusing on the long term. Ultimately, employing patience in the portfolio and thinking long term about the companies held as they build their value is what led to Pender’s success. Tune in to find out more.

Key Takeaways:

[1:59] The top 20 stocks in the Fund generated 87% of the positive returns. The 80-20 rule applies to the market and to the Fund as well.

[3:18] Two themes emerge when assessing where Pender found opportunities that drove the portfolio - companies that are having temporary problems, and undiscovered, unfollowed companies. David and Felix unpack their investment in Panera Breads.

[7:30] Recognising patterns - David compares Freshii to Panera in its early days.

[9:19] Invest for the future. Why patience and a long-term outlook are crucial to investment success.

[12:25] Screening may not always be as important as people make it out to be. Companies that have the capacity to reinvent themselves  in a timely manner may be more crucial. The best companies reinvent themselves at their peak!

[17:20] Unfollowed companies are another bucket in the success that the Fund has had. David and Felix dive into some of the big winners, and the genesis and evolution of those ideas.

[22:37] What is Pender's philosophy with cash? David outlines changes in cash positions and how they relate to ideas.

[26:34] Being willing to sit on cash really speaks to patience; it’s an unexpiring option.

[31:41] Discount companies vs compounders. It all goes back to the 80-20 rule, and having the patience to maintain that long-term outlook.

Mentioned in This Episode:

David Barr, President and Portfolio Manager, PenderFund

Felix Narhi, Chief Investment Officer and Portfolio Manager, PenderFund

Panera Bread – When News of a Take-Out at a Premium is Bittersweet

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On June 28, 2018, the Pender Value Fund turned five. In this second of three part series, David Barr and Felix Narhi, co-managers of the Fund, discuss fundamental questions relating to what value investing means, and how this concept has evolved over time. Technology has played a key role in improving and driving change in investing, while also impacting more and more industries in subtle but significant ways and necessitating change over time. David and Felix reflect on the growth of the Pender investment team from two to eight and how expanding the circle of competence  has contributed to the Fund’s ability to enter new parts of the market. Felix also shares a secret from Benjamin Graham hiding in the postscript to The Intelligent Investor. Tune in to find out more.

On June 28, 2018, the Pender Value Fund turned five. In this first  of three part series, David Barr and Felix Narhi, co-managers of the Fund, go way back to explore their investing roots, discussing how they got into investing in the first place, the forces that influenced them early in their careers, some failures and the lessons learned along the way. They delve into how their investment strategies have evolved as a result of the knowledge they have accumulated over time, and why this learning is crucial to ensuring future success as well. David and Felix also have some insights about the key role of management teams in the success of a company, as well as the need to balance quantitative judgements with qualitative analyses. They also talk about  what it takes for a company to move from being a growth company to being a great business. Tune in to find out more.

Key Takeaways:

[2:15] How did Felix get into investing, and more particularly value investing, early in his career?

[4:10] David shares his experience of how he was introduced to The Warren Buffett Way.

[5:15] Investing is really about cumulative knowledge. How has Felix evolved his approach though the course of his career?

[9:05] Felix and David discuss the difference between investment analysis and business analysis, and the drivers that taught them what makes a company successful.

[11:54] What are some of the failures David experienced in his career, and what did he learn from them? Hint: It's to do with management teams and the people in them.

[14:44] There's so much dynamism in business right now - things are changing incredibly fast, and it's crucial to keep learning and adapting over time to keep up.

[17:13] Why are qualitative judgments just as important as quantitative judgments?

[18:13] When tuna's on sale, you buy tuna. What takes a company from being a growth company to being a great business?

[22:42] David shares a personal anecdote about capital allocation and growth-by-acquisition.

Mentioned in This Episode:

David Barr, President and Portfolio Manager, PenderFund

Felix Narhi, Chief Investment Officer and Portfolio Manager, PenderFund

Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years, by Paul Carroll and Chunka Mui

Pender Book Review of Billion Dollar Lessons

The Warren Buffett Way, by Robert G. Hagstrom

Deals from Hell: M&A Lessons That Rise Above The Ashes, by Robert F. Bruner

The Inoculated Investor Blog

Disclaimer

To Learn More: 

Visit: PenderFund Capital Management

Subscribe: Newsletter 

Follow Us: 

Twitter @penderfund

Instagram penderfund

LinkedIN PenderFund Capital Management