Full Video! Claude Leveille’s Presentation on BP from Value Investing Congress 2011

Claude Leveille is the founder and Portfolio Manager of Courant Investment Management, LLC. Courant is a value oriented fund with a mandate to invest across all asset classes, worldwide. The fund only holds long positions and uses no leverage. Prior to founding Courant, Claude was a private investor and worked at @Home Network and The Boston Consulting Group. He holds a BA in accounting from HEC Montreal, and an MBA from The University of Chicago Graduate School of Business.

Claude just spoke at the Value Investing Congress in Pasadena  earlier this year, and the video was just posted. I do not know if Whitney Tilson who organizes the event, gave permission or not but this is the first video which I have seen posted from “VIC” 2011 so far. I will have to remove this video if I am told it was posted without permission, but for now enjoy. As far as I know I am the first person to discover this, besides the person who uploaded it online. Claude talks about BP which is still trading around the same price that it was when Claude bought it.

According to Market Folly, the best site for tracking hedge funds:

Einhorn’s FOF Re-positions Portfolio, Makes New Seed Investment In Year Marked By “Speculative Exuberance”

david einhorn, reading, valuewalk, internet, investment research, Greenlight Capital, hedge funds, Greenlight Masters, famous hedge fund owners, big value investors, websites, books, reading financials, investment analysis, shortselling, investment conferences, shorting, short biasIt has not just been rough year for David Einhorn's own fund. Einhorn's Greenlight Masters fund of hedge funds was down 3% net for the first half of 2020, matching the S&P 500's return for those six months. In his August letter to investors, which was reviewed by ValueWalk, the Greenlight Masters team noted that Read More

Leveille seems to be a contrarian as he focuses on avoiding the ‘herd’. We’ve of course talked about the hedge fund herd mentality numerous times before. Some years Leveille does as few as 3 or 4 trades, noting that he is extremely patient to wait for the fat pitches. Courant uses no leverage and only holds long positions.

One fat pitch that Courant swung at was the 10% position he took in BP (BP) after the Gulf oil spill with an average price of $31. He believed that the market overreacted to the news and has been correct as shares currently trade around ~$44 per share. We also documented how Whitney Tilson’s T2 Partners also bought BP during the spill, taking advantage of the carnage (you can see theirpresentation on BP here). And then this year, well after the oil spill, David Einhorn still saw value as his Greenlight Capital also bought BP. [Just inserting a line in here, I bought BP after the gulf crisis right before Tilson got in, you can see an article of mine here-BP worth $90 a Share or Zero., according to my records I purchased the stock on 06/01/10 and again on 06/09/10, Witney Tilson announced he bought the stock on 06/09/10, so it was not a copy cat trade.]

Courant aligns its interests with investors by employing a modified fee structure. Leveille says that the typical hedge fund fee structure of a 2% management fee and 20% performance fee “grossly misaligns interests.” As such, he has implemented a 0.75% management fee and then a 15% performance fee over a 5% hurdle. Also, the performance fees are not extracted, but rather remain in the fund itself.

Leveille says that the best investments are the ones that are simplest to understand. This is reminiscent of Warren Buffett‘s approach of only buying things in your “circle of competence.” Leveille listed some of his mistakes as investor such as: not concentrating positions enough, going outside of his circle of competence, selling too early, and holding too much cash.

And speaking of cash, Courant currently has around 25% of assets parked there. Leveille has been buying South Korean equities and also US large caps in the healthcare sector. He also mentioned that he currently does not have any investments in gold, bonds, or the euro. As far as inflation hedges go, he thinks that buying companies with high return on equity (ROE) can help battle the printing presses.

Disclosure: I am long BP

This video was not intended to be public and was taken down at the request of the speaker.