Francois Rochon, President and Portfolio Manager at Giverny Capital, Interviews with The Wall Street Transcript: Patience as Key to Value-Focused Investing

Wall Street Transcript

67 WALL STREET, New York - April 22, 2013 - The Wall Street Transcript has just published its Investing in Energy, MLPs and Other Strategies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with Portfolio Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Value Investing, Long-Term Investing, High Quality Companies, Investment Strategies, Large Cap Investing, Investing in Energy, Oil and Gas

Companies include: Wells Fargo & Company (WFC), M&T Bank Corp. (MTB), Bank of the Ozarks, Inc. (OZRK), Fastenal Co. (FAST), CarMax Inc. (KMX), Walt Disney Co. (DIS), Union Pacific Corp. (UNP), Berkshire Hathaway Inc. (BRK-A), JPMorgan Chase & Co. (JPM) and many more.

In the following excerpt from the Investing in Energy, MLPs and Other Strategies Report, a portfolio manager discusses his investment philosophy and his portfolio-construction strategy:

TWST: You've said the most important ingredient to investing is patience. Tell us a little about how you apply that to your philosophy and process.

Mr. Rochon: The first part of being patient is waiting for a good price to acquire companies. Sometimes it takes many years between the time that we start to follow a company and the moment that we purchased shares. In a few cases, it was more than 10 years.

The second part, once we purchased a stock, is being patient to get the reward of our research. The way to remain patient is to consider ourselves owners of the company, so that whatever the stock does in the stock market over the short run doesn't really affect us. As long as the intrinsic value is growing, we don't mind if the stock falls or does nothing. We have had a few securities do very little for three or four years, but we knew that the intrinsic value was increasing, so we were patient.

It's really a question of attitude toward market fluctuations. We're really focused on what we think the company is worth, along with what's happening with the company's earnings prospects and its competitive advantage within the industry. As long as we believe that the company's intrinsic value increases at a very good rate, which I would define as more than 12% a year, we don't mind if the stock does nothing. If we can purchase more of a stock at an even lower ratio or at an even bigger discount to the intrinsic value, we'll gladly do it.

TWST: In your literature you mention four portfolios - Global, U.S., Canada and an Equity Fund, which you use as models for your private wealth accounts. Tell us about the portfolios.

Mr. Rochon: It's very simple. It's mostly my own accounts. The Global portfolio is the combination of all the stocks combined...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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