Wintergreen Fund

[petey2720]

See attached 2013 Wintergreen Fund Annual Report.

2013-Wintergreen_Fund_Annual_Report.pdf

[OracleofCarolina]

David Winters on selling all of his Berkshire, via his twitter feed

 

Winters: "We no longer felt that Warren Buffett was looking out for his shareholders’ interests."Although Berkshire is still a high-quality business with a compelling valuation,"it no longer met the second principle of our three-pronged investment criteria – management working on behalf of all shareholders.

[merkhet]

I wonder how much of that is just sour grapes in that Buffett called him out pretty harshly during the Annual Meeting this year.

[gfp]

Man, when is this Buffett guy going to start working on behalf of all shareholders?  Enough is enough

 

David Winters on selling all of his Berkshire, via his twitter feed

 

Winters: "We no longer felt that Warren Buffett was looking out for his shareholders’ interests."Although Berkshire is still a high-quality business with a compelling valuation,"it no longer met the second principle of our three-pronged investment criteria – management working on behalf of all shareholders.

[CorpRaider]

Yet they still hold KO.

[Munger_Disciple]

From the report, cumulative performance since inception (10/17/2005 to 12/31/2013, approximately 8 years):

 

Wintergreen: 84.40%

S&P500: 84.99%

 

Wintergreen shareholder probably incurred more taxes in this period than index fund holders. I would also note that Berkshire shareholders had a cumulative return of 109.66% during this period.

[OracleofCarolina]

Interesting as Mr.Winters also positions his strategy as not "index hugging", yet the performance is index like

[Packer16]

He is in a very competitive part of the market and I am not surprised that he or most anyone else can outperform in the large cap portion of the market.  Given this combined with the fees he charges, the odds of him or anyone else outperforming are slim.  The efficient market hypothesis at work.

 

Packer

[muscleman]

He is in a very competitive part of the market and I am not surprised that he or most anyone else can outperform in the large cap portion of the market.  Given this combined with the fees he charges, the odds of him or anyone else outperforming are slim.  The efficient market hypothesis at work.

 

Packer

 

Bill Ackman focus on the large cap portion and seems to have done well.  :D

[bargainman]

David Winters on selling all of his Berkshire, via his twitter feed

 

Winters: "We no longer felt that Warren Buffett was looking out for his shareholders’ interests."Although Berkshire is still a high-quality business with a compelling valuation,"it no longer met the second principle of our three-pronged investment criteria – management working on behalf of all shareholders.

 

It's for publicity..  Net assets peaked years ago at 1,494, now at 1,177

[LC]

David Winters on selling all of his Berkshire, via his twitter feed

 

Winters: "We no longer felt that Warren Buffett was looking out for his shareholders’ interests."Although Berkshire is still a high-quality business with a compelling valuation,"it no longer met the second principle of our three-pronged investment criteria – management working on behalf of all shareholders.

 

It's for publicity..  Net assets peaked years ago at 1,494, now at 1,177

 

I tend to agree. I also think getting his name/fund in front of cameras was a contributing factor in his opposition to the KO compensation package.

[Munger_Disciple]

The bottom line is that Winters subtracted value for his fund holders by not outperforming the index whereas Buffett added enormous value to Berkshire shareholders.

[investor-man]

I wonder why he named his fund after a flavor of chewing gum

[EliG]

Winters is on the list of "superinvestors" @ Dataroma.

 

http://www.dataroma.com/m/holdings.php?m=WA

 

Given his index-like performance, Dataroma judgement is rather questionable.

[NoCalledStrikes]

Its uncanny how after 9 years, Wintergreen's cumulative return to investors in his fund (84.40%) is almost identical to the return from the S&P 500 (84.99%).  Technically, Winters himself did measurable better than the S&P, but all his out-performance was absorbed by his fund's not insignificant 1.85% expense ratio.  Yet, he has the nerve to claim that he knows how to look out for shareholders better than Warren.

 

What a joke, his 1.85% expense ratio on  1.25 billion in AUM = 23.1 million/year for Wintergreen. Meanwhile, the last BRK proxy I read had Warren charging his fellow shareholders only $500,000/year.

 

If David Winters is lucky, his investors aren't reading his tweets and picking up ideas on what to do with managers who aren't looking out for their shareholders.

[muscleman]

Winters is on the list of "superinvestors" @ Dataroma.

 

http://www.dataroma.com/m/holdings.php?m=WA

 

Given his index-like performance, Dataroma judgement is rather questionable.

 

This guy's portfolio is pretty concentrated. But somehow his performance is index like. What a coincidence. :)

[Munger_Disciple]

After-tax performance of Wintergreen is likely to be substantially worse than that of the S&P 500 index due to portfolio turnover.

[NoCalledStrikes]

After-tax performance of Wintergreen is likely to be substantially worse than that of the S&P 500 index due to portfolio turnover.

 

I'm not so sure, to Winter's credit, his turnover ratio is very low from 10-15% over the last 5 years.

[randomep]

Interesting as Mr.Winters also positions his strategy as not "index hugging", yet the performance is index like

 

It is a coincidence as he is a international investor. Funny how he compares himself to S&P500 when it makes more sense and probably looks better if he chose a MCSI EAFE index.

[Guest wellmont]

mid life crisis?

[Packer16]

If you look at his performance on Morningstar he is below the 50th percentile in terms of performance for the past 5, 3 and 1 years.  You have a great point about fees.  This guy is paying himself crazy fees for underperformance.  This is not an isolated case amongst large cap managers.  For these managers, I think the efficient market has caught up with them.  Some of the others in this camp include Oakmark, Sequoia, Longleaf, Tweedy Browne, Mutual Shares and Davis.  It is not that these folks do not have discipline and process, it is the field they are playing is filled with opponents as skilled as they are.  The only way I have seen to do well in the large cap space is to concentrate like Fairholme but you also get increased volatility. 

 

If you have not, I would read some good books on mutual funds like Bogle on Mutual Funds or the Boglehead Guide to Investing to get some perspective on the challenges mutual funds face.  I differentiate what mutual funds are trying to (get a return all the time) versus the more opportunistic approach practiced here.  The opportunistic approach focuses on few well researched situations where most other folks are not going.  The get a return all the time game is much more difficult if not impossible to game to play and win. 

 

Packer

[Guest]

Packer,

 

To be fair, Sequoia has done a good job for shareholders. While the fund has only done a bit better than a .5% annual than the S&P 500 over the past 10 years, it's done so with less volatility (that matters to a lot of people). The results would have looked a lot better if we looked a year ago. It's underperformed the market by almost 11%. It's actually edge out Berkshire (share value, not bv) over the past 10 years (but not 15). But it has beaten the S&P 500 over the past 15 years by almost 3.5% annually. That outperformance is actually right about the average vs the S&P 500 since inception (14.55% vs 10.96%).

 

Oakmark has actually done even better but with a lot more volatility. I'll admit longleaf has been pretty terrible and the guys at Davis have been pretty nasty too (though at least their fees are low).

[CorpRaider]

I could probably think of 20+ funds i would buy before this one, including just about every fpa fund, dodge and cox, tweedy, oakmark maybe half a dozen vanguard funds, etc.  It is fair to say that an msci developed or all world index is probably a fairer benchmark for this fund and some of the tweedy's.  W/r/t the EMH, we should of course be mindful that we are in a period following an epic bear run; one which has resulted in even the WEB underperforming of late; leading to the usual cyclical questions about his and other value investors' alpha.  I suspect many of them will look better five years hence.

[thepupil]

If you look at his performance on Morningstar he is below the 50th percentile in terms of performance for the past 5, 3 and 1 years.  You have a great point about fees.  This guy is paying himself crazy fees for underperformance.  This is not an isolated case amongst large cap managers.  For these managers, I think the efficient market has caught up with them.  Some of the others in this camp include Oakmark, Sequoia, Longleaf, Tweedy Browne, Mutual Shares and Davis.  It is not that these folks do not have discipline and process, it is the field they are playing is filled with opponents as skilled as they are.  The only way I have seen to do well in the large cap space is to concentrate like Fairholme but you also get increased volatility. 

 

If you have not, I would read some good books on mutual funds like Bogle on Mutual Funds or the Boglehead Guide to Investing to get some perspective on the challenges mutual funds face.  I differentiate what mutual funds are trying to (get a return all the time) versus the more opportunistic approach practiced here.  The opportunistic approach focuses on few well researched situations where most other folks are not going.  The get a return all the time game is much more difficult if not impossible to game to play and win. 

 

Packer

 

Winning the Losers Game is a good book on this topic. It is also a great book to recommend to people who are not into finance that want advice on how to manage their money. If they read it, the conclusion is clear: don't pay high fees for diversified tax inefficient mutual funds!

 

[Packer16]

Packer,

 

To be fair, Sequoia has done a good job for shareholders. While the fund has only done a bit better than a .5% annual than the S&P 500 over the past 10 years, it's done so with less volatility (that matters to a lot of people). The results would have looked a lot better if we looked a year ago. It's underperformed the market by almost 11%. It's actually edge out Berkshire (share value, not bv) over the past 10 years (but not 15). But it has beaten the S&P 500 over the past 15 years by almost 3.5% annually. That outperformance is actually right about the average vs the S&P 500 since inception (14.55% vs 10.96%).

 

Oakmark has actually done even better but with a lot more volatility. I'll admit longleaf has been pretty terrible and the guys at Davis have been pretty nasty too (though at least their fees are low).

 

But I don't hold an equity mutual fund to reduce my volatility (I will hold bonds or equivalent for that).  My point is that just about all of these guys when they have beaten a banchmark it is not by much and have done so by not being invested in a sector, tech in 1999/2000 for example.  Do these guys deserve the 1% fees for just having me avoid an overvalued sector I would have avoided in any case?  Why not by an index fund for 5bp or a value tilted one (that would have avoided the overvalued sectors) for 10bp to 30bp (VSIIX or PRF for example) and call it a day?

 

Packer