Boyar Value Group recently started doing a podcast entitled The World According to Boyar. In it, they'll conversations with top investors, authors, and businesspeople. Their first guest was Chris Mayer, author of How Do You Know as well as the investing book: 100 Baggers. He is the Chief Investment Strategist of Bonner & Partners. Here's some notes from the podcast as well as the full podcast audio embedded below:
Chris Mayer Interview on Boyar Podcast
- On 100 Baggers, it's basically taking the concept of a 10x return on a stock from Peter Lynch and adding a zero to it, to find the cream of the crop in terms of investment returns. Mayer looked at all stocks that returned 100x from 1962 to 2014 to find common characteristics. It returned 365 stocks and the best performing stock of all was Berkshire Hathaway.
- His biggest takeaway was that: return on invested capital is the most important factor. If you compound at 25% a year for 25 years, that's a 100 bagger. But that's also an extremely large feat.
- The returns can often be back-end loaded so patience is one of the most important factors. The psychology of watching prices head higher and higher and being tempted to sell often keeps people from holding on. On the other side of the equation, the other problem is during those 100 baggers, you have to often survive multiple big drawdowns. So psychology plays a big part in being able to withstand the swings.
- Coffee Can Portfolio: Idea from Journal of Portfolio Management. Investor just bought a small portfolio of stocks and just didn't touch them for 10 years and performed extremely well, much better than someone who bought the same stocks but actively sold positions. Mayer named Howard Hughes (HHC) as a stock that could be an example today. He bought it in 2011 and hasn't sold any shares since. Another he likes is Fairfax Financial in Canada.
- How Do You Know: A Guide to Clear Thinking About Wall Street, Investing & Life is his new book that's not necessarily a traditional investing book but it's about how you know what you know. You shouldn't try to know or explain every single little move a stock makes.
Embedded below is the full podcast of Boyar's interview with Chris Mayer:
We also recently posted up some complimentary equity research from Boyar if you missed it. They've analyzed three stocks they feel have high upside and those reports are available for free: CHTR, BEN, STKL.
Friday, September 28, 2018
Chris Mayer Interview: World According to Boyar Podcast
Monday, April 7, 2014
Chris Mayer CherryHill Mortgage Presentation: Value Investing Congress Las Vegas
We've posted up notes from the Value Investing Congress in Las Vegas and next up in the series is Chris Mayer of Agora Financial who pitched long CherryHill Mortgage Corp (CHMI) and Kennedy Wilson Europe.
Chris Mayer's Value Investing Congress Presentation
His presentation: "Investing by the C.O.D.E."
• 17% annualized if you bought all of his capital and crisis names since 2002.
• 13% - 14% annualized off his special situations names.
• Two ideas. C.O.D.E – four points of what he looks for in an investment. C = cheap, O = owner operators, D = disclosure; E = excellent financial position (i.e. no troubled balance sheets.)
• Mortgage Servicing Rights (MSRs): Chris is not recommending a specific servicer like specialty servicers – Ocwen, Nationstar and Walter. Likes the excess servicing rights – when interest rates go up, value of excess MSR increases.
• CherryHill Mortgage Inv. Corp (CHMI) is a mortgage REIT. Partners with Freedom Mortgage Corp (private mortgage originator) – invested $20MM in the business and own 13.5% of the company. Freedom paid the listing fees for the IPO.
• IPO priced $20, BV $19ish. Freedom was started in 1990.
• CHMI has a 10.5% yield. $21.5 BV, stock trades at $19.
• It was a way for Freedom to have a cheaper cost of capital set-up.
• Cherryhill is purely an investor. Cherryhill does not have to do the bidding, they have a steady flow from freedom – have an agreement with freedom in regards to excess MSR sales – valued by a third party.
• Chris believes incentives are aligned.
• Picked up two pools of excess MSRs since the IPO.
• What should it be worth? No-pure play comps, best comp may be HLSS. Thinks upside should be in line with HLSS and other competitors – around 1.3x TBV. Low risk with decent upside.
• Second idea – macro idea, very interesting. Investing in non-performing loans in the EU. EU banks have $1 trillion in NPLs and pressure to get rid of them.
• For example, Lloyds is exiting Ireland. Last year only $90B sold. UK, Spain and Ireland are the most interesting. Over $180B in NPLs in each country, most likely higher.
• Specific recommendation for the investment through Kennedy Wilson Europe – KWE. Raised $1.7B in February, should benefit from this trend.
• Acquired a portfolio already. Kennedy Wilson invested over $200MM in the platform (is the manager). NAV is 9.77 pounds, sells for 10.40 pounds, a small premium above NAV for a compelling idea and strong management team.
• Kennedy Wilson background – 1% mgmt. fee and a performance fee. One criteria they look for is growing foreign investment. Ireland is benefiting from Companies such as Google/LinkedIn moving to the Country. Have a lot of people on the ground.
• Although KW rose in price (the asset manager) since he first recommended it in 2012, he still likes it.
• Summary – Cherryhill low risk –low downside decent upside. KWE – should benefit from NPLs in Europe, aligned incentives and trades at a small premium to NAV.
Be sure to check out the rest of the Value Investing Congress presentations.
Tuesday, September 17, 2013
Chris Mayer's Presentation on Charter Financial & Pulse Seismic: Value Investing Congress
We're posting up notes from the 2013 Value Investing Congress in New York. Next up is Chris Mayer of Capital & Crisis. He presented "People Not Personnel - The Case For Owner Operators" and pitched .
Chris Mayer's Value Investing Congress Presentation
-->
Be sure to check out the other presentations from the New York VIC here.
