“When I started the Fund in 2007 at age twenty-three, my goal was to produce a great fifty-year investment record for my clients. I’m now almost a third of the way through that time span. As of June 30th, 2021, the Fund has outperformed its benchmarks over three, five, ten years, and since inception. Despite these respectable results, I expect to do better in the future. In the early years of the Fund, I made the mistake of investing in a good number of companies that were extremely “cheap” but whose growth prospects were not so clear. The lack of growth worked against us because it took longer than I expected for the investments to work out. Today, I’m more attuned to the advantage of buying cheap stocks where the companies also have good growth prospects. Time becomes our friend in those scenarios.”
– Isaac Schwartz (RGF Q2 2021 Letter)
Additional insights in the Q2 2021 commentary,
– Stock Price vs Valuation: With regards to a key holding, Isaac discusses how “despite the nearly five-fold increase, the stock is a more compelling investment today than it was when we bought it” and why.
– Reading the Fine Print: Isaac shares that while combing through regulatory filings on insurance companies in the UK, Canada, and Japan that have subsidiaries in Asian emerging markets, there were sometimes massive inconsistencies between the parent and subsidiary when it came to the subsidiary’s earnings. “Differences of this magnitude can be an indicator of hidden value.” This thorough hands-on approach to due diligence is how Isaac finds the diamonds in the rough!
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