A different approach to value investing

Looking well past the current headlines coming out of Washington helps provide a certain level of calm to Randy Dishmon, manager of the Oppenheimber Global Value Fund Ticker:(GLVAX). “Political turmoil determines the current market environment, but it doesn’t determine what a business is going to be worth on a three- or five-year time horizon,” he said. “Over the long-run the value of the business will win.” Mr. Dishmon manages his global multi-cap value fund by shunning traditional analysis and concentrating on each company’s private market value. “A lot of value managers will focus on things like price-to-book and price-to-earnings ratios, but all those accounting numbers can be massaged,” he said. “I have not seen a single number on an accounting statement that can’t be faked, and paying the wrong price is the biggest risk an investor faces.” His portfolio of 50 -70 stocks is currently 60% allocated to U.S.-based companies. The next largest country weighting is Japan at 12.5%, followed by the United Kingdom at 9%. As a bottom-up stock picker, Mr. Dishmon said “it comes down to opportunities.” “I’m finding tremendous opportunities right now and that’s part of the reason why I have the allocation I do to the U.S.,” he said. “Half the revenue of S&P [500 Index] comes from outside the United States. We’ve always looked at the world as one stock market.” That said, there are places Mr. Dishmon is not currently allocated, including the emerging markets. “I have had very little emerging markets exposure for the past two years,” he said. “I just don’t find value there.” Since the start of the year the fund is up 1.6%, which compares to a 3.4% gain by the S&P over the same period. Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry.