investmd Posted August 30, 2017 Share Posted August 30, 2017 Francis Chou's semi-annual letter is out http://choufunds.com/pdf/SEMI-AR%202017%20vF%20%28with%20cover%29.pdf Review of holdings shows ability to analyze companies and buy them at deep value with numerous "winners" up > 3x (BRK, Nokia, Citi, JPM Warrants and Wells Fargo Warrants). However, the same thoughtful, erudite, value investing analytic pathway resulted in losses of >50% in Valeant & Resolute Forest Products, with Sears being down >80%! End result is 10 yr returns of 4.3%/yr and 15yr returns of 6.6%. Without a couple of the big losses, his fund would be hitting it out of the park. Is there something that Chou can (vs. will) do to avoid these huge losses? I see no evidence of change in "style" . Finally I don't agree with his "math" that 10 & 15 year returns can be skewed by one bad year and that's just the way it is. He's mentioned this before and I'm surprised to see him bring it up again. One expects there to be some bad years and some very good years. However, over any period of time, it should average out. Ten years is a good period of time. Link to comment Share on other sites More sharing options...
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