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Rupal Bhansali Of Ariel On Non-Consensus Investing

By VW Staff. Originally published at ValueWalk.

ValueWalk is at the NYSSA  Annual Ben Graham Conference today. Below are notes from the speakers. Check back as we will have a lot more in the coming hours. These notes are from the following panel Opening Keynote: “Non-Consensus Investing” Rupal Bhansali, Chief Investment Officer, International & Global Equities, Ariel Investments, LLC

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Rupal Bhansali – informal notes  from the speech

Rupal Bhansali

-no payoff if your view is consensus


-correct answers worth nothing in investing if your view is consensus and wrong answers are painful and expensive


-example of tires: consensus is low value commodity and non consensus view is that it is mission critical, high tech; there are no Chinese tire! Why are tires not manufactured in China.


-Michelin was low return not because of business but because of bad management


-consensus sees tires as another auto component company;


-tires are consumable and not based on new car sales

-Japan is proverbial submerging market but many high quality companies


-investors think gdp growth is prerequisite for good companies but exmaple of China shows that gdp growth doesn’t equal good investments


-consensus was crazy about emerging markets but they were expensive and non consensus bet on Japan was a 3x return

What wise people do in beginning fools do in the end

-what people like about consumer staples is they are a staple b/c they are recurring in nature; a value investor does not overppay


-microsoft is a staple; outlook, excle, powerpoint,, it is an enterprise staple and trades at a discount to other consumer staples

WSJ article in Oct. 2016 – they dying art of stock picking but most active managers were not active ; they were closet passive; too many mutual fund players were closet indexors;

Information that everyone else has is not worth having

-these headlines always reach a crescendo at the wrong time; every time value investors chose to fail and not cheat; every time have a bull market; passive does not care about valuations or have a moral compass

-what do people get most wrong in market? quality…conventional wisdom is find quality; past performance can change; brands dont’ look interesting; people don’t want brand but want a value proposition; kirkland is a brand even though it is not branded; COMPETITIVE ADVANTAGE IS OLD SCHOOL; YOU NEED COMPANIES TO HAVE DARWINIAN INNOVATION THAT KEEP EVOLVING;

-Avoiding losers is more important than picking the winners

The post Rupal Bhansali Of Ariel On Non-Consensus Investing appeared first on ValueWalk.

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