What We're Reading ~ 10/16/19

The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of Walt Disney [Bob Iger]

The active manager paradox: high-conviction overweight positions [CFA Institute]

In-depth piece on Amazon: Jeff Bezos's master plan [The Atlantic]

How cloud gaming will and won't disrupt [Matthew Ball]

A look at TradeDesk [Greytab Investments]

A pitch on Interactive Brokers [Barrons]

On unsustainable consumer subsidies in the new app world [The Atlantic]

Recent commentary from Bill Nygren [Oakmark]

Top 20 business transformations of the last decade [HBR]

TJMaxx prices, experience make it immune to Amazon [Business Insider]

T. Boone Pickens on what made him successful [Twitter]

How baseball cards got weird [The Atlantic]

Sequoia Fund Q4 Letter: Added to Alphabet, Exited Fastenal & Danaher

Ruane, Cunniff & Goldfarb is out with Sequoia Fund's fourth quarter letter.  They returned 20.07% for the year.

At the end of 2017, their top 10 holdings were:

1. Berkshire Hathaway (BRK)
2. Alphabet (GOOG)
3. Mastercard (MA)
4. Constellation Software (CSU)
5. Dentsply Sirona (XRAY)
6. TJX Companies (TJX)
7. Rolls Royce (RR.LN)
8. Charles Schwab (SCHW)
9. CarMax (KMX)
10. Liberty Media

They exited positions in Fastenal (FAST), Danaher (DHR), Emcor, Croda, Tiffany (TIF), and Costco (COST).  They've also trimmed stakes in BRK, MA, O'Reilly (ORLY), Waters, and TJX.

They've added to positions in GOOG, Hiscox, Jacobs, Omnicom, and Wells Fargo.  They've also started new investments in Credit Acceptance (CACC) and Royal Vopak, Priceline (PCLN).

They've been concentrating their portfolio a bit more, and their cash levels have gone down some.

Embedded below is Sequoia Fund's Q4 letter:



You can download a .pdf copy here.

For other recent fund letters, we've also posted Greenlight Capital's Q4 letter.

Ruane Cunniff (Sequoia Fund) Investor Day Transcript 2017

Ruane, Cunniff & Goldfarb recently released the transcript from their investor day a few months ago.  Known as the managers of the Sequoia Fund, David Poppe and his team talk about many of their investments.

As of the end of June, their top ten holdings were:

Berkshire Hathaway (BRK A / BRK B) 11.28%
US Treasury Bills & Cash 8.65%
MasterCard (MA) 7.72%
Alphabet (GOOGL & GOOG) 6.5%
TJX (TJX) 5.93%
Dentsply Sirona (XRAY) 5.3%
Carmax (KMX) 5.04%
Constellation Software (CSU) 4.83
Rolls Royce (RR.LN) 4.74%
Liberty Media Corp 4.13%

They talked about what they often find in their top investments:

"Hopefully that gives you a sense of the kinds of companies we want to buy: high-quality enterprises trading at discounts to their intrinsic value, with long-duration growth opportunities.  I would note that every great outperformer we have purchased during my eighteen years here - from Fastenal to Idexx to Mastercard to O'Reilly to Precision Castparts to Sirona to TJX - had something in common.  And it was not a low P/E at the time we first invested.  It was a long growth runway and, most often, a long organic-growth runway."

The transcript that follows touches on their thoughts on Priceline.com (PCLN), the threat of Amazon (AMZN) to various businesses, and some of their holdings like TJX and O'Reilly Auto, as well as other positions like Rolls Royce and Charles Schwab.

Embedded below is Sequoia Fund / Ruane Cunniff's 2017 Investor Day Transcript:




You can download a .pdf here.

For more from this firm, you can view their transcript from last year here as well.

What We're Reading ~ 6/22/17

Payments industry overview: Analysis of Visa, Mastercard, American Express [Value Seeker]

Brexit in reverse? [George Soros]

If you can't explain something in simple terms, you don't understand it [Kottke]

On the popular 'FANG' stocks [AQR]

How to survive the retail crisis: a master class from T.J. Maxx [WSJ]

Starbucks' Howard Schultz has something left to prove [Fortune]

Blockchain 101 [CFA Institute]

How a 36-year old Wall Street prodigy saved Burger King [Business Insider]

Why grocery retail is the 'holy grail' [Bloomberg]

A look at subprime auto debt [NYTimes]

Profile of Citron's Andrew Left [NYTimes]

Mary Meeker's 2017 internet trends report [KPCB]

Essilor's CEO on an eyewear megamerger with Luxottica [FT]

Why is Trump causing chaos in Washington but not in the stock market? [Five Thirty Eight]

Ruane Cunniff (Sequoia Fund) Investor Day Transcript 2016: Rolls Royce, Valeant & More

Ruane Cunniff Goldfarb, managers of the Sequoia Fund, recently released the transcript from its investor day.  In it, they talk about many of their investments.

Their top ten holdings as of the end of the second quarter were:  Berkshire Hathaway (BRK.A/B), TJX Companies (TJX), MasterCard (MA), Alphabet (GOOG/L), O'Reilly Auto (ORLY), Mohawk Industries (MHK), Fastenal (FAST), Rolls Royce (RR.L), Constellation Software (CSU.T), and Dentsply Sirona (XRAY).

They outline their thinking on Rolls Royce and also address the Valeant Pharmaceuticals (VRX) saga, which they no longer own.

Embedded below is the transcript of Ruane Cunniff's 2016 Investor Day:



You can download a .pdf copy here.

Sequoia Fund Investor Day Transcript 2015 (Ruane Cunniff & Goldfarb)

Ruane Cunniff & Goldfarb recently released their Sequoia Fund investor day transcript for 2015.  While the event took place back in May, it's still interesting to get their insight on their investments given their long term focus.

Sequoia Fund's investment management team discussed their thesis and outlook on numerous portfolio companies, including Valeant, Google, Mohawk, Idexx, Fastenal, Rolls Royce, TJX, O'Reilly, and many more.

At the end of the second quarter, Sequoia Fund's top holdings were:

Valeant Pharmaceuticals (VRX): 28.7% of portfolio
Berkshire Hathaway (BRK.A/B): 10.6%
TJX Companies (TJX): 5%
O'Reilly Automotive (ORLY): 4.3%
Fastenal (FAST): 4.2%
MasterCard (MA): 3.2%
Precision Castparts (PCP): 2.7%
Mohawk Industries (MHK): 2.5%
Idexx Laboratories (IDXX): 2.3%
Google (GOOGL): 2% 

This really is an interesting read in its entirety given their candidness about assessing their positions.

Embedded below is Sequoia Fund's investor day transcript for 2015:



You can download a .pdf copy here.

Sequoia Fund's 2014 Year-End Letter

Ruane Cunniff & Goldfarb is out with its 2014 year-end letter for its Sequoia Fund.  They returned 7.56% for the year and run a pretty concentrated portfolio of large bets.  At the end of the year, their largest holdings were: Valeant Pharmaceuticals, Berkshire Hathaway, TJX, Fastenal, O'Reilly Automotive, Mastercard, and Idexx Labs.

Their letter also outlines their latest thinking on the above companies, as well as some of their new positions like Richemont, Cabela's, and Constellation Software.

Embedded below is Sequoia Fund's 2014 annual report:



You can download a .pdf copy here.

Sequoia Fund Investor Day Transcript 2014

Today we wanted to highlight the transcript from Sequoia Fund's investor day earlier this year.  This is old (6 months ago) but is still worth reading due to the in-depth color they provide on their investments and the fact that they're long-term shareholders so most of the positions still remain in their portfolio.

Positions they talk about include Valeant Pharmaceutical (VRX), Allergan (AGN), Google (GOOGL/GOOG),  Mastercard (MA), TJ Maxx (TJX), Omnicom (OMC), IBM (IBM), Ritchie Brothers (RBA), Fastenal (FAST), Costco (COST), Berkshire Hathaway (BRK.A/B), O'Reilly Auto (ORLY), Rolls Royce (LON:RR), Precision Castparts (PCP), and more.

Embedded below is the Sequoia Fund's Investor Day Transcript: 



You can download a .pdf copy here.

And given their long-term focus, we'd also point you to Sequoia Fund's 2013 investor day transcript as well as Sequoia Fund's 2012 annual letter if you haven't read those either.

What We're Reading ~ Analytical Links 8/7/14

The World's 99 Greatest Investors: The Secret of Success [Magnus Angenfelt]

Interview with Michael Mauboussin [Bloomberg]

On finding large gaps between price and value [Base Hit Investing]

In search of the world's best investment advice [AFR]

A look at Lancashire Holdings [WertArt Capital]

Is TJ Maxx the best retail store in the land? [Fortune]

Shoppers are fleeing physical stores for the web [WSJ]

Does Valeant's cost cutting go too far? [Pro Publica]

How AMC Networks could benefit from the urge to merge in TV [QZ]

Sprint drops bid to buy T-Mobile after regulatory resistance [Reuters]

Dish chairman says bid for T-Mobile possible now that Sprint backs off [Reuters]

Ruane Cunniff Goldfarb: Sequoia Fund Annual Letter 2012

Catching up on a few more notable 2012 annual letters, we turn next to the Sequoia Fund run by Ruane Cunniff & Goldfarb.  An investment of $10,000 at inception in 1970 has grown to over $2.89 million as of the end of 2012.  They returned 15.68% in 2012.


Key Takeaways

- They currently don't see many compelling investment opportunities.  Began 2012 with 21% cash position, ended the year with 16%

- "In the fourth quarter of 2012, we were modest net sellers of equities for the first time since 2008, in response to specific situations at several of our portfolio holdings."  They exited Target (TGT) and Becton Dickinson (BDX).

- "Valuations for stocks are heavily influenced by interest rates, and particularly by the risk-free rate of return on 10-year and 30-year United States Treasury bonds. Relative to the current return on Treasury Bonds, stocks continue to be quite attractive.However, the current risk-free rate of return is not a product of market forces.  Rather, it is an instrument of Federal Reserve policy."


Top Holdings At 2012 Year-End

1. Valeant Pharmaceuticals (VRX): 11.6% of assets
2. Berkshire Hathaway (BRK.A): 10.9%
3. TJX (TJX): 7.5%
4. Fastenal (FAST): 5.6%
5. Mohawk Industries (MHK): 4.0%
6. Idexx Laboratories (IDXX): 3.2%
7. Advance Auto Parts (AAP): 3.1%
8. Precision Castparts (PCP): 3.1%
9. Rolls-Royce (LON:RR): 3.0%


Embedded below is Ruane Cunniff's annual letter from the Sequoia Fund where they go into detail about some of their positions and overall market views:




For more on this fund, late last year we posted up why Ruane Cunniff likes Valeant Pharmaceuticals.