Zeke Ashton on Centaur Capital's Investment Approach: Interview ~ market folly

Thursday, January 27, 2011

Zeke Ashton on Centaur Capital's Investment Approach: Interview

Zeke Ashton is the founder of Centaur Capital Partners in Dallas, Texas. He focuses on long/short equity value investing and has compounded at 16% per annum since inception in 2002. His interview focuses on his non-traditional entrance into the hedge fund industry as well as his focus on 'hated' stocks.

Ashton started out in the Treasury and risk management consulting business. And, like so many value investors, he later shifted to investing after discovering Warren Buffett. Ashton actually worked at The Motley Fool for a while where he refined his skills with the basics and crafted his own investing style.

Ashton started with less than $1 million but attracted the likes of Whitney Tilson (of hedge fund T2 Partners) as an investor. Today, he manages $110 million and we've covered Ashton's presentations at the Value Investing Congress as well.

Centaur's Investment Approach

Ashton likes a concentrated portfolio, but not extreme concentration. He likes the 20-stock model and while he does short, he is long-biased. He often holds 20 longs and 6-8 shorts. Typically, he avoids cyclical and leveraged businesses and prefers companies that hold a lot of cash and generate a lot of cash.

The hedge fund manager's picks are often found in a pocket of opportunity nestled between growth and value. The stocks Ashton typically invests in don't grow fast enough to attract growth investors and aren't cheap enough for deep value players. As Ashton says, "boring is beautiful."

OpalesqueTV sat down with Ashton and the video interview is embedded below (email readers come to the site to view it):

We've posted up some other great hedge fund interviews, including Phil Goldstein of Bulldog Investors and David Gerstenhaber of Argonaut Capital.

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