We are pleased to bring you our interview with Brian Yacktman and Elliott Savage of Austin, Texas-based YCG Investments.
MOI Global: Please tell us about the genesis of your firm and the principles that have guided you since then.
“We turn on its head the common, mechanical practice of estimating distant future cash flows, valuing those cash flows at an arbitrary discount rate, and then purchasing those cash flows at some predetermined discount to intrinsic value.”
Brian Yacktman: For as long as I can remember, I’ve grown up hearing my father talk about investments, so I think it was natural for me to develop this passion over time. As he mentored me and as I saw the results his strategy produced, I became convinced that his methodology had merit and really came to believe in his philosophy. After working with him for several years, and realizing his separate account minimum was so high (it’s over $50 million), I wanted to offer management to those who desired separate accounts but couldn’t meet the minimum. I also wanted to add upon what my father taught me by offering the “option enhancement” strategy. When I suggested lowering the minimum to my father, he basically said, “Great idea, just don’t do it here!” because their business model was focused on managing very few, large accounts. So, with his blessing, in 2007, I left his firm and created Yacktman Capital Group, the name of which we later changed to the initials YCG to avoid confusion between the two firms. Then, in 2012, with my father’s firm growing assets at $1 billion a month, it became apparent to us that they would likely need to close their funds. So, once again – I desired to offer an alternative to those who would be closed off – and the YCG Enhanced Fund (YCGEX) was born. To this day, we desire to offer the YCG strategy of protecting and growing capital in an objective manner to as many people as are interested to help them achieve their financial goals.
MOI: What are your key stock selection criteria, and what types of businesses have you favored historically?
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