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Martin Capital Management 2012 AR


giofranchi
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It is always a pleasure to read Mr. Frank Martin!  :)

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

 

mcm_2012_annual_report.pdf

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What's their 1 year, 5 year and 10 year return? It is hard to find in the AR. It is irritating to me when the return information is hard to find in an annual report of a hedge fund or a mutual fund.

 

I remember Bill Miller. It is the first things first in his report to report the return number when he beat S&P 500 15 years in a row. But, it became hard to find in his letter when he lagged the market.

 

A good manager should be equally candid on bad result and good result.

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Thanks always a good read.  However, this guy reminds me of the guy who used to write the Growth Stock Outlook.  He was a good stock picker but ended up laging the market in 1980s ands 1990s in large part because of his large allocation to cash.  I wonder if F. Martin will end up in the same camp?

 

Packer

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Thanks always a good read.  However, this guy reminds me of the guy who used to write the Growth Stock Outlook.  He was a good stock picker but ended up laging the market in 1980s ands 1990s in large part because of his large allocation to cash.  I wonder if F. Martin will end up in the same camp?

 

Packer

 

Charlie and I believe in operating with many redundant layers of liquidity, and we avoid any sort of obligation that could drain our cash in a material way. That reduces our returns in 99 years out of 100. But we will survive in the 100th while many others fail. And we will sleep well in all 100.

WEB 2012 AL

 

The key to making these investments is to be liquid, i.e., having lots of cash to take advantage of opportunities. In 2008, we had 70% of our portfolio in cash and government bonds. Currently, we have 31% in cash and cash equivalents – earning us very little money. While we suffer from short term pain by having so much cash, it gives us great options for long term gain whenever the opportunity becomes available.

- Mr. Prem Watsa 2012 AL

 

Every extremely successful businessman throughout history possessed one feature: always cash on hand, when a great opportunity presented itself. I don’t know of a single exception to this basic rule. How didn’t they end up like the guy who used to write the Growth Stock Outlook? Don’t ask me! I don’t know! It’s a secret!  :)

But, for all the differences of economic outlook and portfolio positioning, Mr. Buffett and Mr. Watsa clearly agree on what counts the most.

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

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Very interesting. Their conservatism, while appropriate in 2000 and 2007, seemed a bit excessive in 2002 and 2009.

 

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