We had the pleasure of interviewing Charles de Lardemelle, a founding partner and portfolio manager at International Value Advisers, based in New York City. In the conversation, Chuck provides a wide-ranging perspective on his approach to global investment opportunities.
Until 2007, Chuck was a senior vice president at Arnhold and S. Bleichroeder Advisers, and associate portfolio manager of the First Eagle Global, Overseas, and U.S. value funds as well as a variety of separate accounts and offshore funds. From 2005 to 2007, he was a director of research at ASB responsible for hiring, training and supervising a team of eight analysts. From 1996 to 2005, Chuck was a securities analyst for the First Eagle Funds and predecessors. As an analyst, he was responsible for covering a number of industries globally, including services, transportation, hotels, technology, and capital goods.
The following transcript has been edited for space and clarity.
MOI Global: We are looking forward to learning from you about investing. We’re going to cover several topics – I’m really excited about them. Before we do so, please tell us a bit about what piqued your interest in investing and how did you get involved in it?
Charles de Lardemelle: I started at an early age. I was always attracted by the stock market and so I bought my first stock when I was about twelve with Christmas money. And fast forward to business school (I went to a French business school). There was an investment club there that allowed you to basically play the stock market like a pro. So you would pick up the phone and you would be directly in touch with the French stock exchange at the time, which was still a physical trading floor, now it’s all dematerialized.
My father didn’t know what a margin call was, so when I came back home that weekend I had to explain what that was. He did not bail me out.
I had to borrow, basically to pay for business school, and there was some leftover of about FFR 10,000, the equivalent of $2,000 at the time, in today’s terms, probably closer to $5,000, and I started dabbling in the stock market.
And then I used leverage, and then I did options. I was about 20 years old at the time and I thought I was really going to make it. My father was very proud when he received a letter about six months later, and gathered my brothers around the dining table and told them “your brother got an internship at a well-known bank!” He opens up the letter and it’s a margin call.
My father didn’t know what a margin call was, so when I came back home that weekend I had to explain what that was. He did not bail me out. In hindsight, it’s the best $5,000 I spent on my education. I had just lost money that I could not afford to lose and so I decided to take a year off business school, that’s 1994, and I did different internships in various parts of the financial markets.
The first one was at DLJ in Paris. The second one was in bond origination at Societe Generale in Paris. And the last one was in New York City, where I met Charles de Vaulx and Jean-Marie Eveillard, and Charles gave me Warren Buffet’s letters to shareholders. And I clearly remember that day, I went back into my dormitory and started reading the letters, and I just couldn’t let go, and I said, “this is it.”
For the first time, I was exposed to a philosophy that resonated with me, that clearly lays out what the market is and that Mr. Market is here to serve you. And I said, “this is it, this is what I want to do.” Finally, I found my calling. And so I was lucky in the sense that I stumbled upon this early in my life.
And so I went back to France to finish business school and started working straight away in 1996 for Jean-Marie Eveillard and Charles de Vaulx at what was at the time the SoGen Funds, which was part of Societe Generale.
I worked for Jean-Marie and Charles as an analyst for the following ten years or so, then became Director of Research for a couple years, overseeing a team of ten people, before starting IVA with a number of former members of my team.
MOI: You mentioned Jean-Marie Eveillard and your heritage from France. We don’t seem to find that many value investors in France or in Europe, and you’ve ended up in New York. Tell us a bit about what it takes to really pursue this.
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