The current portfolio of Allan Mecham as of 31st March, 2015 (From DataRoma)
||% of portfolio
||BAC – Bank of America Corp.
||CMPR – Cimpress N.V.
||DNOW – NOW Inc.
||SNE – Sony Corp.
||OUTR – Outerwall Inc.
||LUK – Leucadia National Corp.
||IBKR – Interactive Brokers Group Inc.
||Y – Alleghany Corp.
||MSM – MSC Industrial Direct
||CHEF – The Chefs’ Warehouse
||BRK.B – Berkshire Hathaway CL B
||BRK.A – Berkshire Hathaway CL A
||CPRT – Copart Inc.
||HEI – HEICO Corp.
||DSWL – Deswell Industries
There are two schools of thought among value investors who choose to talk or not to talk about the current portfolio that they hold.
Theory A: Don’t talk about the book
- Talking about the investments in the portfolio forms a stronger bias in the investor’s mind. Also reversing the position becomes tougher as it contradicts the public position taken on the stock.
- Public starts forming opinions on the investors based on the performance of the stock that the investor is talking about. It is similar to hedge fund managers facing pressure from the public on short term performance.
- Ideas are considered as proprietary material. No good reason to share them with the public. It is the product of the firm and it must protect it.
- When you recommend a stock and change your position, you might not have the time to clarify on the changed thinking and might be selling while others might be buying based on your earlier position. But few investors have the ability to sway the market’s opinion based on their stock ideas
Theory B: Talk about the book
- It actually makes you a better investor as it crowd sources opinion into your thought process and you are not under any obligation to be influenced by the thought process of others. Might also bring into consideration perspectives not considered by you in the original thought process.
- If you are in a position to influence the general market’s opinion based on your thought, it becomes a self fulfilling prophecy. I am not saying going ra-ra and marketing the stock; I am talking about showing the market the catalyst for undervaluation and add to the market’s knowledge on why they need to change their opinion collectively on the stock (Easier said than done)
- Biggest advantage in my opinion is, if you are confident about your thesis and you are a value investor who can stand out in the crowd, one must not be afraid to talk about one’s book with the right disclaimers. All perspectives can be filtered appropriately and can only enhance one as an investor.
There are investors who believe in both sides of the theories but the important thing is to be consistent about it. In between the two, there are a swathe of investors who talk about stocks at their convenience. I have seen investors who talk about only the stocks that might have gone up multi-fold in their portfolio with hardly any mention about the ones that have not. The public then bids up the securities even more making them even more successful. There are a couple of managers that I track who have disclosed ideas that have only gone up over the years and make it sound that they have never have lost money which is highly questionable as well.