Jeff Auxier

Jeff Auxier, Auxier Focus Inv (MUTF:AUXFX)– ‘Value of Cumulative Research (Over Time)’

Jeff is the founder and portfolio manager for Auxier.

* Influences:

o Call to Buffett in 1982

o Graham – ‘The Intelligent Investor’, SEC Filings, Annual reports

o Templeton – ‘The Humble Approach’

o Fisher – ‘Conservative Investors Sleep Well’

o Robert Pamplin – Pres. of Georgia Pacific (Jeff’s first job was mowing for him)

* Frame work to endure

o Rational business approach

o Margin of Safety

o Double play (dividends + depressed price) vs. torpedo

* Investing – craft of the specific

o Focus on the important and knowable

o Determining odds of outcomes

o Price dictates capital allocation

o Get away from Wall Street

o Long term focus is invaluable

o Ego & emotion are the enemy (Isaac Newton & South Sea Bubble)

o Compounding most underappreciated concept

* Understand accounting – the language of business

o Importance of ledgers

o lesson from Pamplin – your brain is the calculator

o Ben Franklin – the idea of a ‘moral ledger’ as well

* Misperception of risk

o Buffett quote – risk is not knowing what you are doing….

o Carlos Slim quote – I never take risk

o In 2009, the distressed debt market had 50% loss protection (1930’s worst case was 5%)

o Diversification does not work when there is easy money and assets are inflated

o Research the entire capital structure (could go to 0)

o Adequate compensation for risk taken

o Risk of easy money bubbles

o Avoid hottest companies in hottest industries

o Want inspired management in an uninspired industry

* Crisis is Opportunity

o Since 1947, recessions occur less than 5% of time

o 91′-98′ Small Banks were #1 asset class

* Q&A

o Best ideas now?

* Tesco at less than real estate value

o How many stocks do you hold?

* Normally 20-30

o When should you sell?

* At estimate of full value

o What do you like about Avon?

* Going into emerging markets, where they will have more consumption

Value Investor Conference: Omaha, Nebraska – May 4th, 2012

Dustin Hunter, SunRift Capital Partners (www.sunriftcp.com)

(These notes are to the best of my recollection.)