In this episode of Excess Returns, Justin and Jack sit down with Scott McBride, CEO and portfolio manager at Hotchkis and Wiley, to explore the approach that has allowed them to succeed during a time when many other value investors have failed. McBride, with 24 years at the firm, shares insights into how their team has achieved impressive results by being willing to think differently from consensus.
Key topics discussed:
How market sentiment and emotion create opportunities for long-term investors
The importance of having the right team culture and being comfortable with contrarian positions
Their approach to valuing companies beyond traditional metrics like P/E ratiosWhy catalysts aren't necessary for investment success if you get valuation and governance right
Their perspective on international markets, particularly opportunities in Europe and the UK
Thoughts on AI's impact on businesses and investment analysis
The growing influence of passive investing and how it creates opportunities
McBride explains why having fewer analysts covering certain stocks can create opportunities, and why focusing on business quality, strong balance sheets, and good governance is crucial for long-term success. He also shares valuable insights about maintaining flexibility in investment approach rather than being dogmatic about any single strategy.
Whether you're an experienced investor or just starting out, this conversation offers practical wisdom about what works in value investing over the long term.
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