Part 1 - Richard Oldfield - Insights from London Value Investor Conference, 9 May 2013

Sunday, May 12 2013 by
22

I attended most of the London Value Investor Conference last week. It's very much the Rolls-Royce of the investor conference market, not least because the tickets are pricey at £658 (although the £30k profit went  to a children's charity called Place2Be), but also because the speaker line-up is top-notch - e.g. Anthony Bolton, Howard Marks, James Montier, etc. So some serious & high-achieving names, most of whom have run £ multi-billion funds.

I took copious notes, but rather than regurgitating the speeches verbatim, which would take much too long, I've decided to skip through the speeches to give a general flavour, but to stop and highlight the key insights from each speech which really stuck in my mind as being useful.

I arrived, as planned,  during the mid-morning coffee break, because my day started, as usual with me writing up my morning small cap report here. So I missed the speeches from Michael Price, Gary Channon, and David Harding.

This article is Part 1, and covers the speech from:

 

Richard Oldfield of Oldfield Partners

Their value investing ethos is nicely summarised here.

Oldfield wrote a value investing book called "Simple Not Easy" in 2007, and in a self-deprecating speech, joked that he had been rash to publish it just before the GFC (Great Financial Crisis). He also indicated that his funds had under-performed recently, so he had therefore decided to use this speech to focus on his mistakes.

A number of examples were given, including the market crash of 1987. Oldfield had been on holiday at the time, and when the market crashed 25% he felt it was a wonderful buying opportunity. However, his big mistake was going back into the office, where in barely a couple of hours he had become infected by the mood of panic amongst his colleagues. In that critical time when they should have held their nerve, and been buyers, they made the terrible mistake of going 40% liquid after the crash.

So the lessons he learned from this episode were;

1. To keep a cool detachment from day-to-day market movements & background noise (he doesn't have a Bloomberg terminal on his desk) in order to think clearly.

2. That large asset allocation changes are nearly always disastrously wrong, as they are too emotionally charged. So only…

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7 Comments on this Article show/hide all

Paul Scott 3rd Sep '13 1 of 7
1

Hi,

As a post-script to this article, it turns out that Richard Oldfield was absolutely right to be bullish on Nokia.
A deal has just been announced for Microsoft to buy its mobile handset business, and Nokia shares are currently up to 420 in Finland, when they were 282 at the time of Oldfield recommending them in May 2013.

So he was right, and investors who followed his idea on this one are now 49% up in just 4 months. Who said elephants don't gallop? This one did!

Also, I started reading "Simple But Not Easy", Oldfield's book on investment, and it's excellent, very accessible to non-experts as well as useful for experts, so it comes highly recommended. Full of interesting experiences & anecdotes from his investing career.

Cheers, Paul.

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djpreston 3rd Sep '13 2 of 7

Good post Paul. can't wait to hear your review of James Montier..

Fund Management: European Wealth
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Edward Croft 3rd Sep '13 3 of 7

Montier was at his acerbic best, though I didn't feel he added anything beyond his excellent books. I have some slides somewhere - will share the best ones with you when I can.

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djpreston 3rd Sep '13 4 of 7

Cheers Ed

His books are essential reading to understand, or at least to try and understand, investor psychology/bias but nothing quiet beats the first "live" performance and seeing the collective lightbulb moment...

D

Fund Management: European Wealth
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Paul Scott 3rd Sep '13 5 of 7

Hi,

I was rather tired by the time Montier did his speech, and remember being irritated that he was just regurgitating stuff from his book, "The Little Book of Behavioural Investing", so didn't really take many notes during his bit, hence no write-up on it from me unfortunately.

But basically if you read the above book, then you'll get the gist of what he has to say, and it's very interesting.

Cheers, Paul.

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PhilH 3rd Sep '13 6 of 7

Just to say that Place2Be is a fantastic charity that works with the most marginalised and disadvantaged kids in some of the toughest areas. They offer them a space where they can talk and be listened to without prejudice. The founder of Place2Be and Kid Company (Camila Batmanghelidjh) is one of the most inspirational advocates for disadvantaged young people and I find her to be one of the most inspirational speakers I've encountered.

Professional Services: Sunflower Counselling
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Paul Scott 7th Sep '13 7 of 7

In reply to post #76820

Hi Phil,

Indeed, there was an excellent short speech from a representative of Place2Be at the Value Investing conference, and I think the event raised about £35k (from memory) for the charity, so very worthwhile.

Cheers, Paul.

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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