Morningstar traveled to Pasadena for the fourth annual Value Investing Congress West this week and caught up with several hedge fund managers and academics. Not surprisingly, risk management was a top topic, with session titles including "Surviving Today to Triumph Tomorrow," "Low-Risk Bets in a Risky World," and "Surviving the Worst Case."
Jason Stipp is director of Morningstar's individual investor products.
On the topic roster, the banking industry was a close second and went hand-in-hand with the risk discussion. The managers' views on banking ranged from bearish to aggressively bearish, but even amid the gloom, some were finding pockets of opportunity, including Jason Stock of M3 Funds
, which focuses on smaller banks.
Also cautious was former First Eagle manager Charles De Vaulx
, now with International Value Advisers, whose funds are currently holding about a 20% cash stake. Despite the tempered outlook, De Vaulx is seeing some opportunities overseas. He also had some interesting insights on the declining significance of diversification as a reason to invest globally, and the increasing benefits of other factors. Specifically, he cites less efficient foreign markets as breeding grounds for interesting opportunities investors wouldn't find in U.S. markets.
We also caught up with Buffett disciple Mohnish Pabrai
, who discussed his own learnings from a rough 2008 and talked about why Berkshire
is still an attractive investment today.
Along with several other speakers, conference co-founder and Value Investor Insight
co-editor Whitney Tilson
of T2 Partners and Tilson Funds talked to us about the past year and the future of value investing in the wake of extreme market turmoil. Is value investing riskier today? Does the value investor's process need to change? Get their insights from the video reports below.
How Value Investors Got Clobbered
T2 Partners' Whitney Tilson says the macro environment turned typical value fare into value traps in 2008.
Pabrai: Value Investing in a Tsunami
Buffett disciple and hedge fund manager Mohnish Pabrai discusses value investing through the market's dislocation and how he's adjusted his own strategy.
New Trap Doors in Investing
David Nierenberg of the D3 Family of Funds discusses how some of the hedge fund firm's risk management practices have changed.
De Vaulx: Pockets of Opportunity Overseas
Former First Eagle manager Charles De Vaulx outlines today's case for venturing overseas and where he sees potential now.
Worst Yet to Come for Banks?
Soma Asset Management's Igor Lotsvin says unemployment headwinds have yet to hit banks.
Sorting the Good and Bad Smaller Banks
M3 Funds' Jason Stock describes how his firm gauges the on-the-ground health of community banks and uncovers opportunities.
When 'Low Risk' Isn't
Springhouse Capital manager and Columbia adjunct professor Brian Gaines on the faulty assumptions that created investor pitfalls.
Hedge Fund Blowup Risk Factors
Zeke Ashton of Centaur Capital Partners says the market's 100-year storm revealed the high risks of excessive concentration and leverage at some funds.
Calculating the Worst-Case Scenario
Kirkwood Capital founder Dave Rabinowitz discusses the art of downside risk management.
The next Value Investing Congress will be held in New York City on Oct. 19 and 20. Click here to learn more.