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Spring 2012

Graham & Doddsville, issue 15 · 64 pages

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Interviews

• p. 1 ↗ Jim Chanos Kynikos Associates Starts on the cover, continues on p. 16

  One of the best-known short sellers on his early career, what it takes to short well, and his bearish views on Chinese real estate, US natural gas and for-profit education.

  Short sellingAccountingAsia
• p. 1 ↗ Tom Russo Gardner Russo & Gardner Starts on the cover, continues on p. 31

  Tom looks for managements with the 'capacity to suffer' through early hits to reported profits to build an advantage. He talks about Nestlé, Mastercard, Martin Marietta, Brown-Forman and E.W. Scripps.

  Companies: Nestlé, Mastercard, Martin Marietta Materials, Brown-Forman, E.W. Scripps Quality compoundersInternationalJudging management
• p. 1 ↗ Julian Robertson Tiger Management Starts on the cover, continues on p. 53

  Tiger's founder on mentoring the Tiger Cubs, why analysts should focus on strong management, and why he expected Apple and Google to keep outperforming.

  Companies: Apple, Alphabet Judging managementCareer advice
• p. 1 ↗ Alex Roepers Atlantic Investment Management Starts on the cover, continues on p. 44

  Alex went from 'Mr. Divestiture' at an industrial conglomerate to his own firm. He keeps a very concentrated portfolio inside his circle of competence and explains Joy Global and Owens-Illinois.

  Companies: Joy Global, Owens-Illinois Portfolio constructionSpecial situations
• p. 2 ↗ Robert Luciano VGI Partners Starts on the cover, continues on p. 58

  'Concentrate capital in your best ideas.' Robert's approach follows Buffett closely; he explains his theses on Oracle and WD-40.

  Companies: Oracle, WD-40 Quality compoundersPortfolio construction

Student pitches

• p. 6 ↗ Long Avon Products By Anna Baghdasaryan and Rohit Dhingra 2012 Pershing Square Challenge, winner

  An iconic $11 billion beauty company near its historical low valuation, with a big distribution network in fast-growing emerging markets.

• p. 8 ↗ Long Ingersoll-Rand By Jonathan Au, Arjun Bhattacherjee and Rory Ellison 2012 Pershing Square Challenge, 2nd place

  An activist pitch with a $58 target and operating and cyclical catalysts over the next 12 to 18 months.

• p. 10 ↗ Long Legg Mason By Rod de Crayencour, Jake Lubel and Grant Smith 2012 Pershing Square Challenge, 3rd place

  At $26, the team argued the market was pricing Legg Mason's past and ignoring the value of its tax credits.

• p. 12 ↗ Long H&R Block By Robert Fournier, Ian Holmes and Kartik Nehru 2012 Pershing Square Challenge, finalist

  11 times earnings and an 11% free cash flow yield, held down by fears about cannibalization and its old subprime business.

Also in this issue

• p. 4 ↗2012 Pershing Square Challenge
• p. 14 ↗Trip to Omaha