Word: wadhwaney
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Dates: during 2005-2005
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...contrarians like Wadhwaney, 51, investing is a matter of avoiding manias and searching instead for bedraggled castoffs that are cheap precisely because the In crowd won't touch them. "I don't buy prime merchandise," he says. "I buy stuff that's fraught with discomfort. I buy some terrible things." Terrible things that produce terrific returns. Wadhwaney's $1.9 billion mutual fund has racked up annualized gains of 23.2% since its birth 31/2 years ago--double the rise of a comparable index of non-U.S. stocks. (Alas, it's currently closed to new investors...
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. 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. That means appraising a company's existing assets and buying the stock only if those assets are grossly undervalued. Typically...
...what should the patient bargain hunter be buying in Asia today? Wadhwaney suggests looking at out-of-favor Japanese stocks like 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 other company whose stock Wadhwaney owns--is so well capitalized that Wadhwaney believes it will undoubtedly survive the downturn...
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--because the Taiwanese tech sector was crushed. 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 oil and gas royalties from the Bass Strait. The stock trades for at least 30% less than its value by his "ultraconservative" appraisal. Then there's Liu Chong Hing Investments, which owns...
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...