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Graham & Doddsville Graham & Doddsville An investment newsletter from the students of Columbia Business School Inside this issue: Issue XXX Spring 2017 CSIMA ARGA Investment Management Conference P. 3 Pershing Square A. Rama Krishna, CFA, is the founder and Chief Investment Challenge P. 4 Officer of ARGA Investment Management. He was previously A. Rama Krishna P. 5 President, International of Pzena Investment Management and Managing Principal, Member of Executive Committee, and Cliff Sosin P. 14 Portfolio Manager of its operating company in New York. He led the development of the firm's International Value and Student Ideas P. 28 Global Value strategies and co-managed the Emerging Markets Chris Begg P. 36 Value strategy, in addition to managing the U.S. Large Cap A. Rama Krishna Value strategy in his early years at Pzena. Prior to joining Pzena in 2003, Mr. Krishna was at Citigroup Asset Editors: (Continued on page 5) CAS Investment Partners Eric Laidlow, CFA MBA 2017 Cliff Sosin is the founder and investment manager of CAS Benjamin Ostrow Investment Partners, LLC ("CAS"), which he launched in MBA 2017 October 2012. Immediately prior to founding CAS, Cliff was a John Pollock, CFA Director in the Fundamental Investment Group of UBS for five MBA 2017 years where he was a senior member of a team analyzing equities and fixed income securities. Prior to UBS, Cliff was Abheek Bhattacharya employed as an analyst by Silver Point Capital, a hedge fund MBA 2018 which invested in high yield and distressed opportunities, as well as by Houlihan Lokey Howard & Zukin, a leading Matthew Mann, CFA investment bank best known for its advisory services with MBA 2018 Clifford Sosin respect to companies requiring financial restructuring. Cliff Adam Schloss, CFA (Continued on page 14) MBA 2018 East Coast Asset Management Christopher M. Begg, CFA, is the Chief Executive Officer, Chief Investment Officer, and Co-Founder of East Coast Asset Visit us at: Management. Prior to co-founding East Coast, Chris served as www.grahamanddodd.com a Portfolio Manager and ResearchRolf Heitmeyer Analyst at Moody Aldrich www.csima.info Partners and a Portfolio Manager at Boston Research and Management. Chris is currently an Adjunct Professor at the Heilbrunn Center of Graham and Dodd Investing at Columbia Business School, teaching Security Analysis during the fall Semester. Chris received his BS degree from the University of New Hampshire and holds a Chartered Financial Analyst (CFA) designation since 1998. Mr. Begg is a member of the Boston Chris Begg Security Analyst Society and the CFA Institute. Chris is involved in environmental conservation serving as a Corporate (Continued on page 36) Page 2 Welcome to Graham & Doddsville We are pleased to bring you the kets portfolio in Russia when the Tenth Annual Pershing 30th edition of Graham & other investors were fleeing Square Challenge in April 2017. Doddsville. This student-led the region. Windsor Cristobal ’18, Anji Lin investment publication of Co- ’18, and Isabella Lin ’18 share lumbia Business School (CBS) is Clifford Sosin of CAS Invest- their winning pitch of Yum co-sponsored by the Heilbrunn ment Partners shares his highly China (YUMC); Chris Waller Center for Graham & Dodd concentrated and long-term ’18, SK Lee ’18, and HK Kim Investing and the Columbia Stu- approach. He discusses two of ’18 discuss Alaska Airlines dent Investment Management his investment ideas in depth; (ALK); Griffin Dann ’18, Joseph Association (CSIMA). anyone following Herbalife O’Hara ’18, and Vikas Patel ’18 (HLF) or World Acceptance share Corning (GLW); Gustavo Meredith Trivedi, the Heil- In this issue, we were fortunate Corporation (WRLD), especial- Campanhã ’18, Gilberto Giuizio brunn Center Director. to speak with three investors ly short sellers, will be interest- ’18, and Thiago Maffra ’18 pre- Meredith skillfully leads the who provide a range of perspec- ed in this discussion. Addition- sent Dollarama (DOL). Center, cultivating strong tives and investment approach- ally, Cliff provides some unique relationships with some of es. All three apply variations of career advice for aspiring inves- We are honored and privileged the world’s most experi- value investing and fundamental tors. to have continued the Graham enced value investors, and research to find overlooked & Doddsville legacy, and we creating numerous learning opportunities. These invest- Christopher Begg, CFA, of look forward to reading the opportunities for students ments could be stable businesses East Coast Investment Manage- next generation of issues, interested in value invest- in turbulent geographies, misun- ment discusses the benefits of helmed by three outstanding ing. The classes sponsored derstood businesses engrossed investing in “compounders, individuals in Abheek by the Heilbrunn Center in controversy, or compounders transformations, and Bhattacharya ’18, Matthew are among the most heavily that are hiding in plain sight. workouts.” The adjunct profes- Mann ’18, and Adam Schloss demanded and highly rated sor of Security Analysis at Co- ’18. We want to thank Abheek, classes at Columbia Busi- A. Rama Krishna, CFA, of lumbia Business School shares Matt, and Adam for their com- ness School. ARGA Investment Management his thoughts on Sherwin- mitment and dedication to discusses the application of value Williams (SHW) and other high Graham & Doddsville. investing globally, especially in quality businesses that are emerging markets. His time sometimes overlooked. Chris As always, we thank our inter- working with valuation-focused also emphasizes the benefits of viewees for contributing their firms helped inform ARGA’s multi-disciplinary learning, both time and insights not only to approach and the goal to find for life and for investing. us, but to the investment com- value anywhere. Rama discusses munity as a whole, and we the challenges and opportunities Lastly, we continue to bring thank you for reading. of this strategy, including the you pitches from current stu- decision to invest nearly a quar- dents at CBS. In this issue, we ter of ARGA’s emerging mar- feature ideas from finalists of - G&Dsville Editors Professor Bruce Greenwald, the Faculty Co-Director of the Heilbrunn Center. The Center sponsors the Value Investing Program, a rigor- ous academic curriculum for particularly committed stu- dents that is taught by some of the industry’s best practi- tioners. Student volunteers at the 20th annual Bruce Greenwald with keynote speaker CSIMA Conference, February 2017 David Abrams of Abrams Capital (right) Volume I, Issue 2 Page 3 20th Annual CSIMA Conference — February 3rd, 2017 Keynote speaker David Abrams, Abrams Capital Samantha McLemore, LMM, and William von Mueffling ’95, Cantillon Capital Management, speak on the Behavior Finance panel Thomas Russo of Gardner, Russo & Gardner, speaks on Attendees networking and discussing stocks after the the “Finding Value: a Global Perspective” panel Best Ideas panel From left: William Strong of Eschaton Funds, Dominique Mielle of Canyon Partners, Andrew Wellington of Lyrical, and Ryan Heslop of Firefly Value Partners offer their best ideas. Ellen Ellison of University of Illinois Foundation (right) moderates Page 4 10th Annual Pershing Square Investing Challenge — April 19th, 2017 The first-place team, which pitched Yum China, poses The Yum China team (from left): Anji Lin ’18, Isabella with Bill Ackman (left) and the other judges Lin ’18, and Windsor Cristobal ’18 The second-place team, which pitched a short on J.M. Last year’s winning Couche-Tard team (from left): Smucker, poses with the judges Melody Li ’17, Joanna Vu ’17, and Thais Fernandez ’17 Students and alumnus discussing the pitches (from left): Vik Patel ’18, Mahmud Riffat ’14, Eric Laidlow ’17, and Lilia Noack ’18 Page 5 A. Rama Krishna (Continued from page 1) Management, where he A. Rama Krishna (ARK): investment decisions. First, as was Chief Investment Until I went to business school investors, we think of investing Officer and Head — in the 1980s, I didn't know that in companies, not stocks. Institutional and the role of an investment Second, we think the value of International, and research analyst even existed. companies is determined by represented the asset Then I learned you actually get their long-term earnings power management business on paid to analyze and critique and dividend-paying capability. the Citigroup Management other people's businesses. Third, our research analysts Committee. He also Well, that seemed like a lot of focus on understanding long- directly managed the fun—and I wanted to apply the term company fundamentals, Global Emerging Markets many useful learnings from not analyzing investor Equity strategy. Prior to business school in an sentiment. And fourth, our A. Rama Krishna Citigroup, Mr. Krishna was intellectually rigorous portfolio construction reflects Director of International profession. the magnitude of the discount Equity Research, Portfolio to fair value at which we buy Manager, International I started out on the sell side in, as well as the risk that the Equities and Chief because I wanted to forecasts may not be correct. Investment Officer, understand businesses. After Emerging Markets Equities about five years, one of my By incorporating these at AllianceBernstein in clients—now concepts into ARGA’s New York, London and AllianceBernstein—asked me valuation-based investment Tokyo. He has also worked to join them to help build their process, we take emotion out at Credit Suisse First research and manage of investing. The process often Boston, first as an Equity portfolios in global, results in our investing in Research Analyst and international, and emerging currently unpopular companies ultimately as Chief market strategies. Based first and industries. The long-term Investment Strategist and in New York, then in Tokyo benefits of this contrarian Director — Equity and London, I built and led approach have been Research, in New York, Alliance’s international documented by a number of Tokyo and Singapore. research team, along with studies. Mr. Krishna earned a joint managing investment M.B.A./M.A.
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