Mason Hawkins Quotes
102 Mason Hawkins Quotes
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Superior long-term investment performance can be achieved when financially strong, competitively entrenched, well-managed companies are bought at prices significantly below their business value and sold when they approach that corporate worth.
Mason Hawkins
We only want to buy when we can pay less than 60% of a conservative appraisal of a company’s value, based on the present value of future free cash flows, current liquidation value and/or comparable sales.
Mason Hawkins
We’re looking for two things to line up. The first is that management consists of capable operators focused on generating the most free cash flow possible, and that once they generate that cash flow they redeploy it in a value-generating way.
Mason Hawkins
When a company is selling at a big discount to a conservative appraisal of value, the default option – against which other uses of capital should be compared – is typically buying back shares, which creates value per share and increases our percentage ownership in the business.
Mason Hawkins
We’re looking for the types of competitive advantages that produce sustainably high returns on capital and free cash flow that can grow.
Mason Hawkins
Time horizon. A company reports a bad quarter, which disappoints Wall Street with its 90 day focus, but that might be for explainable temporary reasons or even because the company is making very positive long-term investments in the business. Many times that investment increases the likely value of the company five years from now, but disappoints people who want the stock up tomorrow.
Mason Hawkins
From the third quarter of 2008 through the first quarter of 2009, we were given an opportunity to own best-in-class companies at price levels I’ve never seen in my experience.
Mason Hawkins
We’ve always pursued opportunities regardless of geography.
Mason Hawkins
We sell for four primary reasons: when the price reaches our appraised value; when the portfolio’s risk/return profile can be significantly improved by selling, for example, a business at 80% of its worth for an equally attractive one selling at only 40% of its value; when the future earnings power is impaired by competitive or other threats to the business; or when we were wrong on management and changing the leadership would be too costly or problematic.
Mason Hawkins
[In August 2010 on their sale of Berkshire Hathaway in the first quarter.] We sold it when the company’s entry into the S&P 500 index pushed the stock up over 20% and it approached our appraisal.
Mason Hawkins
Sticking to our sell discipline can force us to end even brief partnerships with our most admired corporate partners.
Mason Hawkins
Given the tax implications of selling, the cost of trading, and the challenge of getting two appraisals right, John Templeton used to have what he called the 100% rule, meaning the upside should be at least twice as high before swapping out one position for what you consider a more attractive one.
Mason Hawkins
[On selling a cheap stock to buy an even cheaper stock.] We… want to improve our position materially when we trade an undervalued business.
Mason Hawkins
[In August 2010] The mark-to-market of 2008 wasn’t fun to experience, but my enthusiasm doubled because it was the opportunity of a lifetime to buy the types of companies we did at those kinds of prices.
Mason Hawkins
When I was in high school, my dad gave me the first edition of the Intelligent Investor and the second edition of Security Analysis. Like most teenagers, investing was not my primary focus, but I did read the intelligent Investor and much of Ben Graham’s three main tenets resonated with me.
Mason Hawkins
[On developing an interest in investing.] The most significant catalyst for me occurred in the bear market of 1970. During my senior year at the University of Florida, I went through the entire S&P stock guide and recorded companies selling below net-net, identified those selling below their net-cash and bought a few, literally buying dollars for fifty cents. That experience hooked me for my career. There were no computer screens at that point.
Mason Hawkins
[On who influenced his investing style.] Chronologically, my Dad, Ben Graham, John Templeton, Warren Buffett and my partner, Staley Cates shaped my investment thinking.
Mason Hawkins
We clearly remind our associates that you’re right because of your facts and reasoning, not because someone agrees or disagrees with you.
Mason Hawkins
We’ve established inflation plus 10% as our absolute investment goal…
Mason Hawkins
There’s not a lot of solace in being down 20% when the market is down 30%. Investing should lend itself to risk avoidance.
Mason Hawkins
We’re focused on nailing down our evaluations so we can use them to make significant long-term investment commitments when sellers are under duress or traders are consumed with ephemeral short-term issues.
Mason Hawkins
We strive to know as much as we can about our prospective CEO-partners. We want to understand their business acumen and their personal histories.
Mason Hawkins
We believe it’s impossible to do a good deal with a bad person.
Mason Hawkins
Business is tough, and the more realistic the manager is the more likely he’ll be successful.
Mason Hawkins
If the company is not reasonably predictable and competitively entrenched, we are very careful about using DCFs.
Mason Hawkins
We’ve made a lot of money in net-asset investing. There are companies that have significant asset values that don’t produce any earnings.
Mason Hawkins
[On Warren Buffett] I think Mr. Buffett’s a very, very able investor, if not the most talented long-term investor…
Mason Hawkins
Mathematically, you can diversify about 80% of your individual company risk with a dozen names in different industries. You can eliminate some 90% with 18 to 20 companies.
Mason Hawkins
You want to have your money in your most attractive quantitative and qualitative qualifiers to give you the best opportunity for returns.
Mason Hawkins
It does not make sense to own your 30th best qualifier when you can concentrate in your top 15. You reduce your return potential as you add names.
Mason Hawkins
We are all very mindful that the investment succeeds or fails based on the facts.
Mason Hawkins
If an important question can’t be addressed adequately, the idea fails.
Mason Hawkins
We assign a devil’s advocate to each investment idea.
Mason Hawkins
[On how long they think about a new investment idea for.] It can be 5 minutes, or it can be 5 months.
Mason Hawkins
If we’re buying a company that’s selling below the cash on it’s balance sheet, it can be done quickly.
Mason Hawkins
[In 2010] We’ve averaged less than 20% turnover over the long run, which means our average holding period is over 5 years.
Mason Hawkins
We sell businesses when they approach intrinsic value and there’s no longer a margin of safety.
Mason Hawkins
John Templeton called it the 100% rule. He wanted a 100% improvement in his position to make a change. If a stock was at 80% of appraisal, he wanted to buy one that was about 40% of value to make the switch. That’s because taxable investors have to pay taxes, and you have to be right on the appraisal of the company you’re selling and the company you’re buying.
Mason Hawkins
Buying good businesses is critical to profitable long-term equity investing.
Mason Hawkins
There are three components of an equity investment’s return. One if the discount to intrinsic value. The second is the growth in intrinsic value. And the third is the rapidity at which the gap between price and value closes.
Mason Hawkins
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