Jason Stipp: To what extent do catalysts factor into your evaluation of companies? You are a long-term holder of companies. Your turnover is very low. You're a very patient investor. Do you have a list of potential factors that you think might cause the market to realize the value that you are seeing in companies that the market hasn't seen in companies yet? Do you think about that and how does that factor into your sell discipline?
David Winters: Well, we like catalysts. They're not always easy to predict. Often times, it takes a while for a company to either come around to the idea, and then – they especially like it when it was their idea to restructure or spin off an asset or change the way they're doing something. And sometimes it's very obvious that if a company did one or two things, the market value would improve. Sometimes there are catalysts that occur that you didn't expect.
In terms of selling, there's a couple of ways we sell. Again, we try to be very intellectually honest with ourselves, and say, "Did something change?" And if it's changed – if the company isn't as good or management's not what we thought, we might sell the asset. The other thing is, let's say, it becomes fully priced, and our inclination would be to start scaling out and to sell it.
And the third thing that we've done quite a bit of during this period of time that's been so difficult for everyone, we call it upgrading. And we've been able to find, let's say, a company in an industry that we like better than another company and that we think has better assets, better management and a better price, our inclination would have been to sell the like asset for another like asset that's better. And I can give you an example, if you'd like.
Stipp: Sure. I'd love to hear that.
Winters: We're intrigued with the natural gas business and we own Chesapeake Energy. And then we came across a company called Birchcliff in Canada, which is growing its NAV at a substantial rate on an annual basis, is very oriented towards its shareholders and making money for its shareholders and we do think trades at a material discount to asset value. So, our inclination was to sell the Chesapeake, which has its challenges. So we sold it all. And now we own Birchcliff, and we're happier, and we think it improves the portfolio.
So, even though we've got low turnover, which we think is the right way to run money, there are times where it makes sense to sell a security and find another security. And that said, we are very enthusiastic about our portfolio. We're just back from three and a half weeks in Asia and we've visited a lot of companies that we own and other companies, and we feel that our portfolio is undervalued and the prospects are bright over time.
Stipp: David Winters of Wintergreen Fund, it's always a pleasure to catch up with you. Thanks for joining us today.
Winters: Have a great day, sir.
Stipp: For Morningstar, I'm Jason Stipp. Thanks for watching.