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By Katie Rushkewicz Reichart, CFA | 06-18-2014 02:00 PM

Danoff: The Benefits of Being Big

Will Danoff, manager of the $100 billion-plus Fidelity Contrafund, says that with the fund's size comes valuable research resources, influence with company management, and the necessity of taking long-term positions.

Katie Reichart: I'm Katie Reichart with Morningstar. I'm here with Will Danoff of Fidelity Contrafund. Thanks for being here, Will.

Will Danoff: Thanks for having me, Katie.

Reichart: You and your Fidelity analysts meet with hundreds of CEOs each year. What do you look for in company management, and what gives you pause.

Danoff: Katie, it's really fun to be at Fidelity. It's very exciting; it's sort of like a big-city hospital. We do see a lot of companies come in, and I'm really looking for managements that are very knowledgeable about their companies, knowledgeable about their industries, who are excited about their businesses. Often these are entrepreneurs and founders, who really have seen an industry and watched it or may be even been part of the creation of the industry. And, I just want to try to have them talk about the future, where they see the biggest opportunities, where their highest priorities are. And then the beauty of Fidelity is that we can monitor their progress and check in, six months later, three months later, a year later.

I talk to these companies, I do keep my notes, and then I try to understand what they've done and where they've fallen short. Everybody makes mistakes. As you know the world was not built in one day, issues happen so just how they handle their issues, how they handle different competitive responses. As we talk about often, the best insights are when managements talk about their competition or talk about bigger issues like China or what's happening in the government. By asking the right questions, in many ways, you and I are in the same industry. What's the right question to ask? And hopefully if you ask good questions, you can engage with management and try to get them off of a script.

So it's fun, and very often you see its lucky, because you meet a lot of smart people. They've gotten to the top because their passionate about their business, and you can learn with them. In some cases you can really, over a long period of time, feel like you are a student to a great business person and get insights into a particular industry.

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