Word: wadhwaney
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Dates: during 2005-2005
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...invest in something that's popular when it's popular is the kiss of death," says Amit Wadhwaney, manager of the New York--based Third Avenue International Value Fund. Indeed, there's no more reliable way of earning dismal long-term returns than betting on what's hot. Consider some of the many ill-fated outbreaks of investor madness that have gripped Asia in recent decades: the giddiness over Japanese stocks in the late 1980s, the Hong Kong property bubble of the 1990s, euphoria over Chinese red chips in 1996-97 and the mad rise of Thai banking stocks before...
...Tempted? Probably not, if you're as impatient as most investors. But Wadhwaney doesn't mind if you don't share his enthusiasms. As he puts it, "I don't like hanging around in crowded rooms...
...what should the patient bargain hunter be buying in Asia today? Wadhwaney suggests looking at out-of-favor Japanese stocks such as Asatsu-DK Inc., an advertising agency that's "extremely cash rich," well positioned in an industry that's ripe for consolidation, and "very cheap." He also likes Nichicon Corp., a producer of aluminum capacitors?ubiquitous components in electronic products. It's an acutely cyclical industry that's deeply depressed, but Nichicon?like every company Wadhwaney owns?is so well capitalized that it will undoubtedly survive while he waits for the downturn to pass. In the meantime, he adds...
...Elsewhere, Wadhwaney has been snapping up shares in a Taiwan venture-capital firm, Hotung Investment Holdings, which trades at less than half the value of its net tangible assets. He also likes BIL International, a Singapore-listed company that owns thousands of acres in Hawaii that it may or may not succeed in developing; a hotel chain in London; and royalties from oil and gas production in the Bass Strait. Based on his "ultraconservative" appraisal of these hard-to-value assets, Wadhwaney thinks the stock trades for at least 30% less than it's currently worth. Then there...
...These days, as usual, Wadhwaney thinks the herd is heading in the wrong direction. For example, although he grew up in Bombay, the center of India's boom, his fund doesn't own a single Indian stock. "People are paying ridiculous prices on promises of the future," he says. As Wadhwaney sees it, "the future is an imponderable. Most people's prognostications are a very poor use of time." Nobody can reliably predict which way the stock market will move or what a company's earnings will be, he argues, so the key is to focus on the present, appraising...