Seven Questions with David Samra and Dan O'Keefe
Our Manager of the Year winners share their thoughts on opportunities today.
After a brutal year, foreign equity markets are brimming with great opportunities and more than a few land mines. So far, our International-Stock Managers of the Year have proved adept at separating one from the other. I posed a few questions via e-mail to Artisan International Value (ARTKX) managers David Samra and Dan O'Keefe to see how they are tackling these challenges.
1. What makes your strategy different from the typical value manager's?
Like many value managers, we focus on buying businesses at a meaningful discount to their underlying intrinsic value. This is the most important component of what we do, as we generate the majority of our returns from the unwinding of that discount. However, we are also extremely focused on managing the potential risks to intrinsic value. We like to invest only in businesses where we believe that intrinsic value is likely to be stable at worst but in most cases growing. This means that we gravitate to companies that are financially strong, have meaningful competitive advantages, and are run by great management teams. We have a particular aversion to companies that employ significant financial leverage in their operations. We think that all these characteristics together maximize our chances of generating attractive returns and minimize our chances of permanent loss of capital.
2. What helped performance in 2008?
We are always hesitant to talk about our successes and failures over any short time frame because we don't want to mislead anyone about our approach. We think about our investment process over a long time horizon, and we want to encourage our investors to do the same. However, there are certainly a few factors that played into relative success in 2008.
Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.