Forester Moves Into AutoZone, Exxon

Stipp: We have seen a lot of volatility throughout the late summer, and now into the fall. What has that meant for the activity of you at the portfolio level? Have you been more active than you normally have been, just because we're seeing potentially what could be some mispricings in there. The market can't seem to figure out what the value of these companies are, it's up and down by a percent or more on any given day?

Forester: Sure. It's hard to catch those because they are so fast, but we have made some changes. We've moved out of some of the more volatile names, if you will. One addition that we made this last quarter was AutoZone. And what I like about that is, if things get softer, people tend to move towards used parts or do their own work on their car, that sort of thing. So that's a tailwind for [AutoZone]; that helps them.

But the other thing is they're moving from just a strictly retail shop to moving into supplying garages. So, if you take your car to your local mechanic, the parts they put on might be AutoZone parts. So, to me that's kind of a no-brainer for picking up, kind of, free business, if you will, because you don't add infrastructure, and you add revenue, which falls to the bottom line very fast.

So, we've added names like that. We've also taken some risk out of the portfolio on the oil side. We sold Marathon, which was a great name for us. It did quite well this year, and we moved into something that's a lot less volatile: Exxon. So, we feel like that's a great positioning move for us.

Stipp: So, still exposure in energy, but a different kind of company.

Forester: Exactly.

Stipp: Okay. Well, Tom thanks so much for your insights on the economic situation as well as the portfolio changes that you've made recently, and for joining me today.

Forester: Thanks so much, Jason.

Stipp: For Morningstar, I'm Jason Stipp. Thanks for watching.