Tom Russo: Global Value Equity Investing [Slides]

Tom Russo: Global Value Equity Investing [Slides]

Tom Russo’s slides on Global Value Equity Investing – Richard Ivey School of Business

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Tom Russo: Musings on "Global Value" Equity Investing

  • Value Investing – 50 Cent Dollar Bills
    • Stanford Business and Law School, 1982
  • “Capacity to Reinvest”
    • 2008 market collapse
  • “Capacity to Suffer”
    • Berkshire Hathaway
    • Nestle – 35 year “planning horizon”
    • Pernod Ricard – credit default swap mayhem
    • SABMiller emerging market beer specialist
  • Invest for the long term
    • White space
    • Position capital globally
    • Currency gains
    • Circle of competence
    • Tax efficiency
    • Virtues of low expectations!
    • Concentrate – few great ideas
    • Market volatility is long-term investor friend

"Capacity to Suffer"

  • Equity index put options
  • Extraordinarily cautious short-term deposits, fiscal year, 2007

"Capacity to Reinvest"

    • MidAmerican Energy Holdings Company
    • Burlington Northern Santa Fe Corporation
    • The Lubrizol Corporation
    • Bank of America Corporation
    • Berkshire Hathaway Subsidiary - e. g., Iscar Metalworking Companies

Tom Russo

Tom Russo

Jim Chanos Unveils Lastest Short As Fund Manager Bets On Further Market Declines

Data 1639507577Jim Chanos has a new short target in his sights. Earlier this week, the hedge fund manager disclosed that he is betting against "legacy" data centers that face growing competition from the trio of technology giants, which have previously been their biggest customers. The fund manager, who is best known for his winning bet against Read More

Nestle "Capacity to Suffer"

  • Russian Ruble crisis (1998)
  • Nespresso
  • China and India
  • Alcon (1970’s through 2010)
  • Novartis payment/DiGiorno acquisition (2010)
  • 2011 Chinese acquisitions in confectionary (Hsu Fu Chi International) and beverage (Yinlu.)

Pernod Ricard "Capacity to Suffer"

  • China (early 2000’s)
  • Addressable market -- over 500 million cases local spirits
  • Absolut (2009) – global leader & premium vodka
  • India (2012)
  • Addressable market -- over 100 million cases of India made Scotch Whiskey currently consumed
  • Leading premium priced local Scotch Whiskey brand
  • Patrick Ricard – “Making Mistakes Today…”

Tom Russo

SABMiller "Capacity to Suffer"

  • China
  • 50% interest in Snow, China’s leading brewer
  • Sub-Saharan Africa
  • Addressable market – 400 million barrels beer consumption
  • “Double the price, halve the price, go farming”
  • Indian Market
  • Addressable market – current consumption 1 liter per capita
  • Recently completed Foster’s acquisition
  • Strategic partnership with Efes to coordinate Russian operations and expand together in Turkey, Efes’ home market

Tom Russo

Market Volatility is a Friend of the Long-term "Global Value" Investor

  1. Permits more effective reinvestment.
  2. Offers merger and acquisition opportunity.
  3. Enhances return from share repurchase.

Tom Russo

See full slides below.

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