John Huber gave a glimpse of his investment philosophy and shared his thesis on Tencent at Wide-Moat Investing Summit 2017. John spoke about common-sense investing and competitive moats. According to John, some types of moats have proven to be more durable than others.
A few highlights of John’s remarks:
How do we reduce unforced errors? A key is focusing on companies that are likely to be earning more money in the future than they are now. It is a simple concept to keep in mind. The trick is that cheap stocks are attractive to value investors.
Even in mega caps, you see as much as a 50% gap between the 52-week high and the 52-week low in any given year, so there are many opportunities. It is more pronounced in small caps.
The traditional gatekeepers, including publishers, cable operators, and other middlemen, no longer have the same force in market. The companies that relied on those gatekeepers are no longer as durable.
A key checklist question: Is the company really providing an attractive value proposition to the end user? If not, relying on a structural advantage will no longer work.
In the 1996 Berkshire Hathaway letter, Buffett used the term “inevitables”… Who are the inevitables today? Facebook, Amazon, Google… The Chinese inevitables are companies like Alibaba, Tencent, Ctrip, and JD.com.
About the instructor:
John Huber is the Managing Member and Portfolio Manager of Saber Capital Management, LLC, a value-focused investment firm that manages separate accounts and a private partnership. John founded Saber in 2013 as a personal investment vehicle that would allow outside investors to invest with him alongside his own investment account. Prior to starting Saber, John spent almost a decade managing a few small residential and commercial real estate partnerships. Saber’s investment strategy is to make concentrated investments in undervalued stocks of high-quality businesses that are likely to compound intrinsic value over time. John also writes about his investment approach at his website Base Hit Investing.
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