Graham & Doddsville An investment newsletter from the students of Columbia Business School Inside this issue: Issue XXXII Winter 2018 The 27th Annual Omega Advisors, Inc. Graham & Dodd At the end of 1991, following 25 years of service, Lee retired Breakfast P. 3 from his positions as a General Partner of Goldman, Sachs & Leon Cooperman, Co. and as Chairman and Chief Executive Officer of Goldman Sachs Asset Management to organize and launch an investment CFA ’67 P. 4 management business, Omega Advisors, Inc. David Poppe CC ’86 & John Harris P. 12 At Goldman Sachs, Lee spent 15 years as a Partner and one Leon year (1990-1991) as of-counsel to the Management Committee. Student Pitches P. 21 Cooperman, In 1989, he became Chairman and Chief Executive Officer of C.T. Fitzpatrick, CFA ’67 Goldman Sachs Asset Management and Chief Investment Officer of the firm’s equity product line, managing the GS CFA P. 27 Capital Growth Fund, an open-end mutual fund, for one-and-a-half years. Prior to Seth Fischer P. 35 (Continued on page 4) Editors: Ruane, Cunniff & Goldfarb Abheek Bhattacharya MBA 2018 David Poppe joined Ruane, Cunniff & Goldfarb in 1999 after a 12-year career in Matthew Mann, CFA journalism. Mr. Poppe graduated with a MBA 2018 BA from Columbia University in 1986. Adam Schloss, CFA John Harris joined Ruane, Cunniff & MBA 2018 Goldfarb in August 2003. Prior to joining David Poppe John Harris the firm, he spent two years as an analyst Ryder Cleary CC ’86 MBA 2019 at Kohlberg, Kravis, Roberts & Co. (KKR), a private equity firm based in New York Gregory Roberson, Esq. and San Francisco. Before joining KKR, he served as an analyst in the investment MBA 2019 banking division at Goldman, Sachs & Co. Mr. Harris graduated with an AB from David Zheng (Continued on page 12) MBA 2019 Oasis Vulcan Value Management Partners Visit us at: Company www.grahamanddodd.com Rolf Heitmeyer www.csima.info C.T. Fitzpatrick Seth Fischer is the founded Vulcan founder and Chief Value Partners in Investment Officer of 2007 to manage Seth Fischer Oasis Management C.T. his personal Company, an Fitzpatrick, CFA capital. Since international investment manager inception, all four headquartered in Hong Kong. Oasis was strategies have peer rankings in the top founded by Mr. Fischer in 2002 following a 4% of value managers in their respective successful seven-year career at (Continued on page 27) (Continued on page 35) Page 2 Welcome to Graham & Doddsville We are pleased to bring you the speaking with David Poppe Finally, we continue to bring 32nd edition of Graham & CC ’86 and John Harris of you pitches from current stu- Doddsville. This student-led Ruane, Cunniff, & Goldfarb, dents at CBS. CSIMA’s Invest- investment publication of Co- heirs to the legacy of Bill Ru- ment Ideas Club helps train lumbia Business School (CBS) is ane—one of the superinvestors CBS students, providing them co-sponsored by the Heilbrunn of Graham and Doddsville the opportunity to practice Center for Graham & Dodd whom Warren Buffett touted crafting and delivering invest- Investing and the Columbia Stu- in 1984. They describe their ment pitches. dent Investment Management maturations as investors, dis- Association (CSIMA). Since our cuss portfolio concentration, In this issue, we feature finalists Fall 2017 issue, the Heilbrunn and pitch two of their favorite from the NYU Credit Pitch Meredith Trivedi, the Center hosted the 27th annual stock ideas. Competition, Columbia Busi- Heilbrunn Center Director. “Graham & Dodd Breakfast.” ness School’s CSIMA Stock Meredith skillfully leads the C.T. Fitzpatrick, CFA of Pitch Challenge, and the MBA Center, cultivating strong In this issue, we were fortunate Vulcan Value Partners sits Women in Investing (WIN) relationships with some of to conduct four interviews with down with us, opining on his Conference organized by the the world’s most experi- investors who provide a variety evolution from a strict value Cornell SC Johnson College of enced value investors, and of frameworks. From scuttlebutt investor to his current empha- Business. creating numerous learning research, tactical strategies, sis on sustainable margin of opportunities for students euphoria, and sustainable margin safety. He talks about building The three finalist ideas from interested in value invest- of safety, we discuss broader partnerships with employees our classmates include: A.J. ing. The classes sponsored industry issues. Each investor and investors. C.T., as he is Denham ’19, Kevin Brenes ’19, by the Heilbrunn Center has a strong passion for studying known, keeps an MVP list of and Gili Bergman ’19—Staples are among the most heavily the history of markets and for high-quality businesses that he (SPLS) 8.5 2025 Long; Ishaan demanded and highly rated continuous personal evolution. would love to own and steps in Bhatia ’19, Ryan Darrohn ’19, classes at Columbia Busi- when the time is right. and Victoria Gu ’19—First ness School. Leon Cooperman, CFA ’67, Data (FDC) Long; and Aditi the founder, Chairman, and Seth Fischer, the founder and Bhatia ’19, Lisa Chen ’19, Victo- CEO of Omega Advisers, Inc, CIO of Hong Kong-based ria Gu ’19, and Aleksandrina discusses his battle with the Oasis Capital Management, Ivanova ’19—FleetCor Tech- SEC, passive management, and discusses his early education in nologies (FLT) Long. his relationships with other in- global arbitrage as well as his vestment managers. He shares recent forays into activism in As always, we thank our inter- details about what is important Asian companies. He explains viewees for contributing their to him outside of investing, per- how he mixes tactical and time and insights not only to sonified by a song written about fundamental approaches to us, but to the investment com- him from a charitable group he investing, why frauds in China munity as a whole, and we is passionate about. aren’t like frauds in the West, thank you for reading. and why, for an activist, this Professor Bruce Greenwald, We also have the privilege of time is different in Japan. the Faculty Co-Director of - G&Dsville Editors 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. Bruce Greenwald and Mario Gabelli ’67 David Abrams and Bruce Greenwald at prior to the keynote address and the 27th the 27th Annual Graham & Dodd Annual Graham & Dodd Breakfast Breakfast VolumePage I, Issue 3 2 Page 3 Columbia Business School Events: 27th Annual Graham & Dodd Breakfast TBU TBU The keynote topic was the future of value investing—heavy stuff CBS Professor and Co-Director of the Heilbrunn Center Bruce for breakfast conversation Greenwald, keynote speaker TBU TBU Attendees of the 27th Annual Graham and Dodd Breakfast Columbia Business School Dean Glenn Hubbard TBU TBU William von Mueffling ’95, President and Chief Investment Officer, A riveted crowd listens attentively to Professor Greenwald Cantillon Capital Management, addresses the crowd reassure them that value investing is here to stay Page 4 Omega Advisors, Inc. (Continued from page 1) those appointments, Lee American Jewish Doddsville spoke with you, it spent 22 years in the Committee (AJC) Wall was the fall of 2011. What has Investment Research Street Human Relations surprised you the most since Department as Partner-in- Award, the 2006 Seton then? charge, Co-Chairman of Hall Humanitarian of the the Investment Policy Year Award, the 2009 Boys LC: I would say at Omega we Committee and Chairman & Girls Clubs of Newark have been on the right side of of the Stock Selection Award for Caring, and the the market. Our basic view is Committee. For nine 2009 UJA-Federation of that every recession leads to consecutive years, he was New York’s Wall Street the next economic recovery, voted the #1 portfolio and Financial Services and every recovery ultimately strategist in Institutional Division Lifetime leads to the next recession. It Investor Magazine’s annual Achievement Award. In was predictable to come out of Leon “All-America Research 2013, Lee was inducted the 2008 recession. I believe in Cooperman, Team” survey. into Alpha Magazine’s the symmetry of cycles, so the Hedge Fund Hall of Fame length and duration of an CFA ’67 As a designated Chartered and was honored by the upcycle probably bears some Financial Analyst, Lee is a AJC at their 50th relation to the length and senior member and past anniversary with the duration of the downcycle. We President of the New York Herbert H. Lehman Award had the most severe recession, Society of Security for his professional so having a longer—not Analysts. He is Chairman achievements, necessarily stronger, but Emeritus of the Saint philanthropic efforts, and longer—recovery than average Barnabas Development longstanding support for would probably make some Foundation, a member of AJC. In 2014, Columbia sense to me. the Board of Overseers of Business School awarded the Columbia University Lee its Distinguished But the growth of passive Graduate School of Leadership in Business management is greater than I Business, a member of the Award, and Bloomberg would have predicted six or Board of Directors of the Markets named him to its seven years ago. I understand Damon Runyon Cancer fourth annual “50 Most what’s behind it, but it’s Research Foundation, a Influential” list (one of only something I would have member of the Investment ten money managers thought would have passed by Committee of the New globally to be so honored, now. I look at it as being Jersey Performing Arts selected “based on what transitory. There’s a role for Center, and they’re doing now, rather passive management, but I Board Chairman of Green than past achievements”).