An exclusive interview with legendary value investor Jean-Marie Eveillard, who was named Morningstar’s International Manager of the Year in 2001 and received its first Fund Manager Lifetime Achievement Award in 2003. A self-described value investor for 50 years, he is known for his meticulous stock research, cautious, contrarian views and emphasis on avoiding lasting losses for his shareholders. He’s able to share his personal views on investing, the markets and strategy now that he has retired from active management and is Senior Advisor at First Eagle Funds.
WEALTHTRACK Episode #1133; Originally Broadcast on February 06, 2015
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|Click to download Searching for Rational Inventors In a Perfect Storm, Lowenstein 2004 Value Investing, [89kB pdf]||Click to download The Superinvestors of Graham-and-Doddsville, Buffett 1984 Super Investors, [8MB pdf, updated]|
First Eagle Funds
I have seen lots of headlines recently that have set off alarm bells in my head about the precarious position of the world’s financial system. This week’s winner was on the front page of Thursday’s Financial Times. It read: “It’s a rollover- World awash with more debt than before financial crisis”. What? I thought we had deleveraged after the financial crisis. As the article, based on a McKinsey report, points out some of us had. “Corporate and household debt relative to GDP has declined in only four advanced economies- the US, the UK, Spain and Germany.” But the rest of the world, China in particular is levering up and low interest rates are enticing companies, households and yes, governments everywhere else to do so as well. Just take a look at what central bankers have been doing. They are supposed to be the conservative ones. So much for that theory! The world now has more debt than just before the financial crisis, far outpacing economic growth, and at a mind-boggling 286% of global GDP.
These are unsettling times for investors. Six years after the financial crisis, market volatility is increasing. The U.S. economy is growing, but much of the rest of the world is slowing. The Federal Reserve is contemplating raising interest rates, but nearly all the other central banks in the world are cutting them.
By just about every measure stocks are not cheap and bonds are expensive. Legendary global investor Sir John Templeton once said “It is impossible to produce a superior performance unless you do something different.”
What – if anything – should we be doing that is different?
For the answer to that question I consulted another Great Investor who is known for “taking the road less travelled” to the long-term benefit of his shareholders, although they did not always recognize it at the time!
This week on WEALTHTRACK we’ll hear from legendary value investor, Jean-Marie Eveillard, now Senior Adviser to First Eagle Investment Management and Board Trustee to the First Eagle Funds.
His reputation was built during his tenure running the First Eagle Global Fund, formerly the SoGen International Fund, from 1979 until 2004 and then again between March 2007 and March 2009, when he handed over the reins to Matthew McLennan, another regular WEALTHTRACK guest.
Eveillard was named Morningstar’s International Manager of the Year in 2001. He also received its first Fund Manager Lifetime Achievement award in 2003 for several qualities: “outstanding long-term performance…aligning his interests with shareholders…the courage to differ from consensus” and the “ability to adapt to changes in the industry.”
A self-described value investor for 50 years, he is known for his meticulous stock research, cautious, contrarian views and emphasis on avoiding lasting losses for his shareholders, or as they say at First Eagle, “avoiding the permanent impairment of capital!”
In order to do so he has historically held a sizable minority position in gold and he has invested against the crowd, sometimes to his professional detriment.
I asked Eveillard to talk about why value investing is so difficult, the current state of the world’s financial system and his views on the markets.
As always, if you can’t join us to watch the show on your local public television station, you can view it on WealthTrack.com. If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Jean-Marie Eveillard, available exclusively on our website.
Have a great weekend and make the week ahead a profitable and productive one.
INVEST WITH SOME TRUE VALUE INVESTORS
|10 VALUE FUNDS|
|Average Annual Return|
|Group Average +10.8%|
|S&P 500 – .57%|
- COMMON VALUES
- Owned limited number of carefully researched companies
- Long-term orientation with low portfolio turnover
- Substantial investments in their funds
|Click to download Searching for Rational Inventors In a Perfect Storm, Lowenstein 2004 Value Investing, [89kB pdf]||Click to download The Superinvestors of Graham-and-Doddsville, Buffett 1984 Super Investors, [526kB pdf]|
EVEILLARD: PORTFOLIO PROTECTION
- Buy gold bullion
[tab] No stock mentions in this episode.[/tab]
[tab]This transcript will be available soon. More information regarding WEALTHTRACK transcripts can be found here
A COLLECTION FROM THE WEALTHTRACK ARCHIVES
Although still Senior Advisor at the First Eagle funds, legendary value investor, Jean-Marie Eveillard gave up active portfolio management at the firm back in 2009. Has his perspective about investing changed at all in retirement?