Two of Controlled Greed.com's most popular posts over the past year were those calling attention to Francis Chou, a value investor in Canada. (You can read them here and here.)
Chou doesn't pop up in a lot of press reports. But when I found this one I wanted to pass it on you this blog's readers:
"We're value investors, and we're having a hard time finding bargains anywhere any more," says Francis Chou of Chou Associates Management Inc. in Toronto, portfolio manager of the globally-oriented Chou Associates Fund. "Back in 2000, high-tech was expensive, but you could go somewhere else to find value, like the financials. Now all the sectors are fairly valued."
"Other guys have been doing much better than us lately," Mr. Chou adds, "because they've been playing with oil and gas and metals, and we don't do that." Nor does he fancy the prospects in emerging countries. "We've looked at emerging markets and the numbers don't make sense," he says. "We also have concerns about the regulatory environment."
As a result, Mr. Chou is sitting back and waiting for further developments. "We actually do well during bad periods, like in 2000, 2001 and 2002, when the markets were negative," Mr. Chou says. "During those years our returns were all positive. We know that eventually, if we're patient we'll find bargains again, so that [sitting back and waiting] is what we're doing."
I largely agree with all that. You read me post the other day that I hadn't bought anything since last September. And the only portfolio action recently was selling the entire Molson Coors position.
There still appear to be nice spin offs out there. I think you mentioned SBH that looks like a nice buy, Mueller came down to below $14 at one point, I bought there. Check out AIMC (Altra) I think it's still a decent stock pickers market but people need to be patient and obviously very value oriented.
Posted by: Amit Chokshi | February 14, 2007 at 09:37 AM
Amit: Agreed. Special situations, such as spinoffs, look to be the few value plays out there. And patience is needed now.
Posted by: John | February 15, 2007 at 12:05 AM