While many mutual fund managers have hundreds of stocks in their portfolios as a way to diversify away stock specific risk, James K. Glassman says you can get nearly the same diversification benefit with many, many fewer holdings.
Small-cap stock valuations are worrying some investors, including top fund manager Donald Yacktman.
Mutual fund manager Donald Yacktman has put up an exceptional track record for more than a decade, and in a recent interview with Canada’s Globe and Mail, he talked about his investment approach and thoughts on the current market. Yacktman says that the market is not cheap, which is the biggest risk investors face today. He recently had about 20% of his portfolios in cash. “That’s telling you how hard it is to find stocks to buy,” he says, adding that the figure would be even higher if returns on cash weren’t so low right now. Yacktman says price — buy […]
For much of the past few years, top fund manager Donald Yacktman has said high quality stocks had been trading at exceptional discounts to lower quality plays. But in an interview with WealthTrack’s Consuelo Mack, Yacktman says the spreads between high and low quality equities has narrowed dramatically. Yacktman, who focuses on high quality stocks, thus has a higher than average cash position of about 20% (he usually has between zero and 30% of his portfolio in cash). He’s still finding attractive stocks, however, including Coca-Cola, Procter & Gamble, and several “old tech” names. Yacktman also talks about his broader […]
Donald Yacktman’s funds have some of the best long-term track records one can find. And in his funds’ 2012 year-end letter, his team talks about a key part of their strategy: position sizing. “We think position sizing is one of the most important aspects of good portfolio mangement,” the letter states (hat tip to GuruFocus.com for highlighting the letter). “We generally take bigger positions in higher quality, diverse companies that we think can acceptably compound capital at attractive rates of returns or securities that are extremely mispriced due to investor perception issues. At times you may see us take surprising positions […]
As 2013 approaches, top fund manager Donald Yacktman is focusing on high-quality stocks, as well as some much-maligned contrarian plays. Yacktman tells Forbes that he likes stocks with high returns on assets, which generally means that the businesses have low capital requirements, nice market share, and the ability to fare well in good times or bad. An example is consumer goods giant Procter & Gamble, which makes such well known brands as Tide and Pampers. The firm generates tons of cash and also offers a nice dividend, two key things Yacktman looks for. “We are in an environment where PepsiCo […]
Top mutual fund manager Donald Yacktman says that the short-term “casino” mentality among most investors has actually created more opportunities for long-term value investors. Yacktman tells Morningstar that a decline in trading costs in recent years, coupled with the natural volatility of stocks, has created volatility and the casino mentality. But, he says, “The more volatile, interestingly enough, a situation is, I think, the more attractive it is for value managers, who are long-term investors, because it creates more opportunities.” Yacktman also talks about his approach to selling stocks.
Top fund manager Donald Yacktman says high-quality blue chip stocks continue to trade at incredibly cheap levels. Yacktman tells WealthTrack’s Consuelo Mack that while many high-quality stocks like Procter and Gamble were cheaper on an absolute basis in late 2008/early 2009, they are now even cheaper relative to the broader market. “The cash flows are much higher, they’re much more valuable than they were then,” he says. Yacktman says the overall investment environment is more unpredictable today than it was years ago, but that he’s able to find plenty of individual companies that are producing predicable, strong cash flows. He […]
Top fund manager Donald Yacktman says that he’s sticking with high-quality stocks. Yacktman tells CNBC that his biggest holdings include Pepsi, News Corp., and Proctor and Gamble. He also says he’d stay away from lower-quality stocks and cyclical firms. He thinks many cyclicals are selling at profit margins that may be unsustainable.
Top fund manager Donald Yacktman says that he can’t remember another time in his 40-plus-year career when he has “seen so many high-quality, profitable businesses selling at prices relative to the market this cheaply.” Yacktman tells WealthTrack’s Consuelo Mack that many stocks are trading at valuations similar to where they were in the late 2008 or early 2009, but are in much better condition today. He’s finding big values in big, steady blue chips like PepsiCo, many of which he says have very predictable cash flows despite the global macroeconomic uncertainty. He says he’s not finding it more difficult to […]
Donald Yacktman, who for more than a decade has posted one of the best track records of any mutual fund manager, is finding big value in an area he once shunned: tech stocks. “If someone had told me 10 years ago that these stocks would be in my portfolio, I would have laughed,” Yacktman, who avoided tech stocks during the Internet bubble of the late 1990s, tells BusinessWeek in reference to two of his funds’ biggest holdings, Microsoft and Cisco Systems. Yacktman keys on firms with strong, predictable cash flows, and shares that trade for less than he estimates those cash flows […]
Top fund manager Donald Yacktman says that in his 40-plus-year investment career, he has “never seen so many large, profitable businesses selling on a relative basis to other things as cheaply as they do today.” Yacktman recently told Bloomberg that PepsiCo and News Corp. are two of the most attractive large-caps he’s finding right now. He also talks about his broader strategy, and his firm’s long-term time horizon. (Yacktman’s interview begins around the 5-minute mark of the clip.)
Many investors run from a stock when it makes short-term negative headlines. But in this recent interview with Bloomberg about News Corp., one of his biggest holdings, top fund manager Donald Yacktman offers an interesting take on how a value investor like himself deals with short-term bad news. In the case of News Corp., for example, Yacktman says recent events have generated bad publicity, but haven’t had that big of an impact on the firm’s ability to generate profits. The stock’s decline has thus actually made it more attractive to him, he says.
While it’s now more than two-and-a-half years since the collapse of Lehman Brothers and the worst of the financial crisis, several top investors are still avoiding bank stocks. “We find it hard to believe the banks have cured all their bad asset problems, and they aren’t transparent enough for us to understand the risks,” Clyde McGregor, whose Oakmark Equity and Income Fund has beaten 99% of peers over the past decade, tells Bloomberg. “Can you still make money in banks? Maybe. But we can build a portfolio that doesn’t demand owning them.” McGregor says a big part of the problem […]
In an extensive interview with GuruFocus.com, Donald Yacktman, Stephen Yacktman, and Jason Subotky of the top-performing Yacktman Funds talk about their investment strategy, and where they’re finding value right now. “The most important decision is the purchase price relative to the value of the investment,” the managers say when asked what the most important indicator they look at is. “The value of an investment is a function of the future cash flows generated from the current assets and the reinvestment of those cash flows by either the investor (reinvesting the dividends) or the management. The quality of the cash flows […]