一切源自增長

在坊間經常聽到闕於Growth Stock Investing, 其中代表人物有Peter Lynch, Philip Fisher.如果能夠掌握固中聽精要及發揮得宜,它的威力確是非常強大的.以下轉戟了一篇精采訪問,大家不妨看看這位高手的演譯,比較一下和大家心目中的有否出入.

隨意想到的公司可能是阿里爸爸,安踏體育…

-------------------------------------------------------------------------------------------------------

Jack Laporte has been managing the $6.3 billion New Horizons Fund at T. Rowe Price since 1987 The New Horizons Fund is one of the largest and most respected small cap funds in the world. In his reign, Laporte has delivered an 11.8% yearly return, 1.6 points better than the S&P 500 and 5.5 points better than the Russell 2000 Growth Index.

Michael Moe: Jack, How long have you run the T. Rowe Price New Horizons Fund now?

Jack L: I've been running the New Horizons Fund since 1987, so 18+ years, I've been at T. Rowe Price for 29 years, so I've been around here a long time.

As you probably know, New Horizons is T. Rowe Price's 2nd oldest mutual fund; it goes back to 1960. Mr. Price, a lot of people call him the father of growth stock investing, first started with a concept that large-cap growth companies were the best place to invest, whereas back in the '40's and '50's, most people only believed that they could own common stocks if they had high dividend yields, Mr. Price said you ought to own companies that can compound their earnings and compound their dividends at above average rates.
Then, in 1960, when New Horizons was started, he came out with a new idea which is that small companies could have higher sustainable growth and that investors ought to look at small cap growth companies, so that was the genesis of how the New Horizons Fund started.

MM: Jack, as you look at companies that you invest in, what are some of the key characteristics that you are looking for?

JL: I'm looking for companies that I can invest in and own for a long period of time. And because I'm taking that longer-term focus, I'm looking at a number of different characteristics. Generally, for a successful, rapidly growing small-cap company, I'm looking for a founder who is a visionary and entrepreneurial CEO who's come up with a unique, industry-changing business strategy. I'm looking for companies that have decent cash flow and hopefully can finance the majority of their growth internally.
I don't like capital-intensive companies. I like companies that operate in very large fragmented industries where there's an opportunity to gain share over time. I like businesses with high recurring revenues. I like companies with above-average profitability in terms of ROE or ROIC and I like sustainable, organic sales and earnings growth. Those are some of the characteristics.


MM: How important is the management team to an investment decision, and secondly, how do you evaluate a management team?

JL: Well, the second question is the trickier one. The management team is critical in investing in small cap companies. What I've found is an excellent management team in a small company can do well operating in a mediocre industry category. One that comes to mind is 10 or 15 years ago I invested in several small steel companies that had a unique business model which was a non-unionized mini-mill, less capital intensive business model for the steel sector, and they took incredible share...

MM: Oregon Steel?

JL: Oregon Steel, Birmingham Steel, there were a number of them, and what you found was a great management team operating in a mediocre business at least for a period of time could take a significant share and the stockholders were well rewarded. The flip side is also true in that a management team that doesn't have its head screwed on right can mess up the best of businesses and fritter away shareholders' capital.

That's why the management team is critical I said earlier that in the real long-term, most major long-term growth winners of tend to have visionary, entrepreneurial CEO's. Oftentimes, however, those companies need to make a transition to a management team that can manage the growth beyond the evolution of the business idea, and there's a need to turn the management over to a more professional management team from the entrepreneurial one that created the business to begin with.


MM: When you look at some of the big winners you've had in the past, what are some examples that you would point out?

JL: Some of the big ones, starting with the more recent, Apollo Group was certainly a major winner, which we invested in on the IPO back in December of '94, and while the company has struggled for the last 18 months, it's still up almost a hundred times since the IPO. If I can digress for a second, that gets to the heart of what I'm trying to do in running the New Horizons Fund and something that I think distinguishes the way I look at managing a small-cap growth fund from how others invest.

I'm looking to invest in companies that I can own for a long period of time, 3-5 years, or in many cases even longer. In Apollo's case, it's over 10 years. Many of my top ten holdings I've owned for 5-10 years and the benefit of that is when you find a great company that can compound their earnings at well-above average rates, really the shareholders benefit if you hold it for a long period of time.
The way the math works when I look at what growth investing is, it's really taking advantage of the power of compound earnings growth. That, in a nutshell, is what it's all about. As you know, if you own a company whose earnings can grow at 15% a year for 10 years, after 10 years, the earnings will have quadrupled, so if the P/E stays the same, the stock would quadruple. If you can find a company that can grow its earnings 20% a year for 10 years, those earnings will be up 6 fold over 10 years, and so the stock at a constant P/E is going to be up six fold.

So to transfer that into Apollo's case, Apollo's earnings compounded at around 40% a year for 10 years, the P/E expanded a little bit, and lo and behold, that turns into a 100 factor. Where I think most growth investors, so-called growth investors, fall down is they don't think about the power of compound earnings growth. Rather, they focus on trading into the latest fad or the latest sector that is showing above-average growth.
The thing that distinguishes New Horizons is that the average turnover rate in the portfolio is about 25% a year now, meaning that I hold a stock for an average of 4 years. The turnover rate according to Morningstar of Lipper in the small-cap growth category is about 125% so what that says is that I hold a stock on average for 4 years and the average manager of a small cap growth fund holds a stock for less than 1 year.
I don't see how you can do well as a growth investor just churning the portfolio so rapidly. I think it's a fruitless exercise because growth investing is all about finding great businesses, great managements, and investing in those companies over a long period of time.
MM: What are some of the mistakes you've made, and what have you learned from them?

JL: Certainly, a mistake that I've made a couple of times, including in the case of DaVita back in the late '90's, I was investing in a very attractive business with a management team that I thought was only ok. And it turned out the management team was less than ok and they almost ran it into the ground.
Thinking that a business is so attractive that it will offset the fact that the management team was not an "A" management team, is a mistake that I've made. Another mistake is not being willing to pay what you should for a truly unique outstanding growth company. If you think about what I said earlier about the power of compound growth, if you find a company that can grow their earnings at 20% a year for an extended period of time and have a high degree of confidence that that can happen, you should be willing to pay a very high P/E on current earnings.

I think I fall under the trap sometimes of saying, "Ah, this is a great company with a great management, but it's too expensive." Well if it really is a great company with a great management, you should want to look through the current price which might look a little bit expensive on current earnings and realize that if you're buying it on the basis of earnings out two or three years, it's actually very cheap. That's a mistake that most growth investors make.

MM: How much time, if any, do you spend evaluating the valuation of the overall market or how aggressive you should be buying stocks or not?

JL: Well, it's not my job to make a market call on the whole market. I think investors in New Horizons Fund want to have exposure to small, growth companies and they're making the asset allocation decision themselves. They don't' want me going to 50% cash because I think the sector might look a little overvalued.

I tend to run my portfolio pretty fully invested at all periods of time with reserves rarely getting over 5% of the portfolio. I'll go back on what I was saying about mistakes that investors make which would be not being willing to pay enough for a great growth company and not holding their great stocks long enough. The best example of that for the New Horizons Fund, way before I even joined T. Rowe Price, was Wal-Mart. New Horizons Fund bought Wal-Mart on its IPO back in 1970.
We held the stock, although we trimmed it along the way, until 1983. We made a ton of money, it was a very successful investment., but we finally sold it because it could no longer be called a small company, that was in 1983. When I look back at that sale and had my statistician go back and look at that sale, about 15 years later, what we found was that if we had held our maximum Wal-Mart position, it would have been bigger than our whole fund! There was a real lesson in that.

I learned not to sell your great companies too soon, which is a reason I've held onto winners as they've grown well out of the small cap area into the mid cap stage. It is hard enough to identify true growth companies. Once you do, don't make the mistake of selling them too quickly.