market folly

Next up in our notes from Invest For Kids Chicago is David Herro of Harris Associates.

•    Value investors focus own low price and high quality.  Mr. Market is an exogenous variable.
•    Negative macroeconomic problems.  Positive impact on valuation.
•    Recommends investors get more exposure to stocks
•    Japan still attractive
•    Weak macroeconomic conditions in western world
•    Judge value of business as cash stream
•    Often co is located in weak environment and are thus irrationally cheap


Herro's First Idea: Daiwa Securities

•    Daiwa Securities (same idea he presented at Invest for Kids Chicago two years ago with the added benefit of being cheaper now)
•    Operating performance improved
•    Trading at half book value



Herro's Second Idea: Publicis

•    Publicis: Global ad agency focused on digital   (World’s leading digital agency)
•    Digital ad spending not going away
•    Flexible cost structure dampens margin attrition in period of declining margins
•    Trading at 8.6x EV / 2013 EBITDA


For the rest of the hedge fund presentations from the event, head to notes from Invest For Kids Chicago.