Graham & Doddsville
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Graham & Doddsville An investment newsletter from the students of Columbia Business School Inside this issue: Issue XXXVI Spring 2019 Yen Liow, Aravt Global 2019 CSIMA Conference P. 3 Yen Liow is the Managing Partner at Aravt Global LLC. Mr. Yen Liow P. 5 Liow directs the firm´s research process and actively researches many of the investments in the portfolio. Mr. Students´ Liow was previously a Principal at Ziff Brothers Investments Investment Ideas P. 15 (ZBI) and a Managing Director at ZBI Equities, ZBI´s equity market-neutral fund in New York. Mr. Liow joined ZBI in Bill Stewart P. 24 2001 and ran a team that oversaw ZBI Equities´ investments in the media, telecom, energy, and agriculture sectors. John Hempton P. 33 Prior to ZBI, Mr. Liow was a Consultant at Bain & Company in its San Francisco, Sydney, Singapore, and Beijing offices. Yen Liow (Continued on page 5) Editors: Ryder Cleary Bill Stewart, Stewart Asset Management MBA 2019 William P. Stewart is the Executive Chairman and a Gregory Roberson, Esq. founder of Stewart Asset Management, LLC. He MBA 2019 began working on Wall Street in 1955 as an David Zheng employee on the floor of the New York Stock MBA 2019 Exchange. Subsequently he worked for Spingarn, Heine & Co. as an Investment Analyst, before going Frederic Dreyfuss on to Pyne, Kendall & Hollister, later known as Riter, MBA 2020 Pyne, Kendall & Hollister. He became a Research Sophie Song, CFA Director at the firm, then President of the MBA 2020 Bill Stewart investment banking subsidiary, and finally Chief Executive officer. Riter, Pyne grew to become the John Szramiak tenth largest NYSE member firm in the years he was MBA 2020 (Continued on page 24) John Hempton, Bronte Capital Visit us at: www.grahamanddodd.com Rolf Heitmeyer www.csima.info John Hempton is the Founder and Chief Investment Officer of Bronte Capital. Prior to founding Bronte in 2009, he was the youngest Partner at Platinum Asset Management and Head of the Financials group. He was also previously an Analyst and Executive Assistant to the Chief Executive Officer at ANZ Bank, Chief Analyst of Tax Policies in the New Zealand Treasury, and has also served in various positions at the Australian Treasury. Mr. Hempton earned a B.A. in Economics from Adelaide University. John Hempton (Continued on page 33) Page 2 Welcome to Graham & Doddsville We are pleased to bring you and W.P. Stewart and Com- ued its winning tradition at the 36th edition of Graham & pany, the latter of which was the UCLA Credit Competi- Doddsville. This student-led sold to AllianceBernstein in tion with a first-place pitch by investment publication of Co- 2013. Mr. Stewart shared why Mitchell Aulds-Stier ´20, lumbia Business School (CBS) he focuses on predictable Karthik Kasibhatia ´20, Angela is co-sponsored by the Heil- earnings, how he comes up Qin ´20, and James Shen ´20. brunn Center for Graham & with an earnings multiple, and The team won with a long Dodd Investing and the Co- what he thinks of the retail pitch on Dean Foods´ 6.50% lumbia Student Investment industry. He also discussed Senior Unsecured debt. We Management Association his views on ADP and Disney. also feature pitches by gradu- Meredith Trivedi, Managing (CSIMA). Since our Winter ating Value Investing Program Director of the Heilbrunn 2019 issue, the Heilbrunn Cen- Finally, we had an engaging students Michael Wooten ´19 Center. Meredith leads the ter hosted the 2019 CSIMA conversation with John and Tyler Redd ´19, who are Center, cultivating strong Conference. Hempton of Bronte Capital. pitching longs on Align Tech- relationships with some of John is well-known for his nology (Nasdaq: ALGN) and the world´s most experi- Our first interview is with Yen public (and accurate) calls on Carsales.com (ASX: CAR), enced value investors and Liow, founder and managing both Herbalife and Valeant. respectively. creating numerous learning partner of Aravt Capital. Yen John discusses his approach opportunities for students discussed with us the value of to finding fraudulent compa- We thank our interviewees interested in value invest- having worked under a couple nies, why switching costs for contributing their time ing. of investment legends, the matter, and the benefits of and insights not only to us, importance he places on sys- global scale. He specifically but to the investment com- tems design, and why he only discussed Mattel and provid- munity as a whole. focuses on a specific set of ed additional color on his investment opportunities to variant perception on Valeant. - G&Dsville Editors compound growth over a peri- od of years. Yen shared with We continue to bring you us a couple of his “horses” (i.e. stock pitches from current durable compounders) in Black students at CBS. In this issue, Knight (BKI), GoDaddy we feature the winning pitch (GDDY), TransDigm (TDG), from the 2019 Pershing and Constellation Software Square Challenge where Professor Tano Santos, the (TSE: CSU). Mingming Wu ´20, Laurent Faculty Director of the Heil- Liu ´19, and K.Y. Yong ´20 brunn Center. The Center We were also lucky to profile recommended a long with sponsors the Value Investing Bill Stewart, founder of both friendly activism for Dollara- Program, a rigorous aca- demic curriculum for partic- Stewart Asset Management ma (TSX: DOL). CBS contin- ularly committed students that is taught by some of the industry´s best practitioners. The classes sponsored by the Heilbrunn Center are among the most heavily demanded and highly rated classes at Columbia Business School. Value Investing Program Class of 2019 Jan Hummel, Paradigm Capital AG, with Professor Tano Santos, Faculty Director of the Heilbrunn Center for Graham and Dodd Investing Volume I, Issue Page 2 3 Page 3 22nd Annual CSIMA Conference - February 2019 Action-packed annual CSIMA Conference schedule Best Ideas panel with Joseph Fleury ´14, Dennis Hong, and Adam Wyden ´10, moderated by Kristin Gilbertson Fireside chat with David Zorub ´03 and Ted Seides Conference attendees have a conversation Fireside chat with Susan Byrne and Jason Zweig Understanding Management Teams panel with David Simon ´85, William Thorndike, and Tracy Travis ´86, moderated by Cheryl Strauss Einhorn Page 4 SAVE THE DATE 29th Annual Graham and Dodd Breakfast A Discussion with Cliff Asness of AQR Capital Management Presented by: The Heilbrunn Center for Graham & Dodd Investing Friday, October 11, 2019 8:00 a.m. to 9:30 a.m. The Pierre 2 East 61th Street New York, NY For inquiries, please contact: [email protected] Page 5 Yen Liow, Aravt Global (Continued from page 1) Mr. Liow earned a I started working when I was to get a summer internship at Bachelor of Laws (Hons.) 14. I worked every summer Ziff Brothers Investments for and Bachelor of and took every opportunity I the remainder of the summer. Commerce from the could find to learn about Ziff Brothers really opened my University of Melbourne in business. It was mostly a lot of eyes to the professional 1994 and a Masters of manual jobs that eventually led investing world. I thought Business Administration to professional internships and hedge funds were traders, (George F. Baker Scholar) opportunities. I bought my first which was not appealing at all from Harvard Business stock when I was 14 (it was to me. What I found at Ziff School in 2001. Santos, an Australian Oil & Gas was a great group of people company) and have been who did deep and creative Mr. Liow lives in investing ever since. research. Ziff had a learning Manhattan, New York with culture in which I spent the Yen Liow his wife and two children. For my undergraduate studies, next 13 years helping to build Mr. Liow serves on the I did a double degree at the an amazing business. Eventually Finance and Audit University of Melbourne in I ran their Technology Media Committee of the Trinity Commerce and Law. I Telecom, Agriculture, and School (NYC), is a board originally started with a triple Energy groups. member of the Success degree – I also studied Charter Network and is a Actuarial Sciences for the first Ian McKinnon was the board member of We.org few years – but I wised up to portfolio manager there. He (Tristate area). Mr. Liow is the fact that it was far too was one of the greatest human an Adjunct Professor at much work and I wanted to beings, coaches and mentors Columbia Business School have some fun. one could ever wish to work and guest lectures for. Ian had a huge impact on regularly at universities After that I went to Bain & my career and remains a close around the country. Company. I started off in their friend. Sydney office and then went to Graham & Doddsville their San Francisco, Singapore While I was with Ziff Brothers, (G&D): Could you start by and Beijing offices over the I also had the opportunity to discussing your background course of five years. Bain was spend time with Eddie and how you got into this an amazing, diverse set of Lampert, who opened my eyes business? practical experiences. But the to case studies. I asked him most important part for my how he developed such an Yen Liow (YL): I´m development was the two incredible business acumen so Malaysian-Chinese Australian. I years that I spent consulting early in his life, and he shared was born in Kuala Lumpur, with Dell Computers. Dell´s with me that he spent a Malaysia, but I immigrated to stock price grew tenfold over substantial part of his twenties Melbourne, Australia in 1976 that period. I learned an and thirties purposefully when I was four years old.