The Washington post Value Investing Net-Nets

David Barse, Third Avenue Management CEO, provides his top value stock picks.


tdd#: 1-800-345-2550 will help you get started today. welcome back to squawk box. value investing is the focus of our what’s working segment. 12.5 billion. value investing. everybody talks about it. you do it a little bit different. we consider ourselves the value investing alternative. why? it was really the outgrowth of two guys named benjamin graham and dodd. nobody has really read it. whitman got so upset that he wrote his own book. what we believe is the modern paradigm. marty whitman. the quality of a company’s balance sheet. what’s in that company’s assets and what the liabilities are on and off the balance sheet. but that doesn’t matter unless the tide comes down and everybody is naked in the pond. for us to predict the future. we want to make sure we have some safety. we talked about in terms of margin of safety, right? we’re really getting deeper into a company and trying to figure out what it’s really worth. set a value for that business and hope the market gives us an opportunity to buy at a discount. i wish we had more time. we should do individual stocks. a lot of people like to see that. what gets through that screen and comes out? we come up with pretty eclectic portfolios. we’ll end up looking wherever we can. one of the holdings i talked about was a chinese listed conglomerate, probably one of the greatest blue chips that nobody talks about. he runs 43% of a $40 billion market cap company. it has investments all over the world, although not in the united states of a currently. he has investments in real estate and hutchison lampoa that is the largest port operator in the world. this is trading 80% of what we think nav is. hong kong company? hong kong company. in march of this year they merged are jeffreys. we had a chance to meet with joe and richard and think the combination of those two businesses with the potential that jeffreys creates for that interview making great investments is an interesting opportunity and for the the first time in a long time a stock relatively inexpensive. the housing market has really boomed. we love the business. three components. home builder, timber and other real estate investments. it’s a great company. do you have any theory about where the street is going that leads you to find the value propositions? no. what the macro is. i get upset with you guys because you speak the macros. you mean us not him. we can’t predict what the future is. we look individually at businesses, fundamentally try to make an analysis. it’s an appraisal of management. we want to make sure if we invest for the long term, which we do. thanks for coming in. we’ll come back.