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Intrepid Capital President Mark Travis on why investors’ portfolios can benefit from the consistent cash flows from companies that make products suc...
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So when you hear all this worrisome news about JPMorgan and Europe touched just want to curl up in your underwear drink here.
It's a pop quiz what do.
Beer underwear and -- which is throwing shoes have in common the answer is the strategy behind the intrepid capital fund.
Mark Travis is this is the perfect mix for times like this he's the president lead portfolio manager of intrepid capital spending the last hour of trading with us.
Beer shoes and underwear.
Why -- these work at a portfolio right now.
Well I think they'll always -- I think you're talking about businesses many times have very consistent cash flows their boring as some people overlook them they generate enough cash where they don't -- an investment banker.
And -- -- -- -- -- analyst coverage so it they that are out there for us to dig upn and value.
And down.
You know they have a consistent in demand and you wouldn't they've seen recently in an article I read about low volatility.
Equity shares outperforming and I think we've -- -- -- that with our process.
Well okay so let me just wave to the viewers right now tell you why you weren't listening to him.
Over the past three years is annualized returns are 14%.
-- he's not BBS and over time you have proven yourself to do very well along these choices how do you pick a stock.
Well again we look for a business the first question we ask ourselves of trap that is houses because it's gonna do recession and I feel comfortable -- -- a lot of issues.
If nothing else if you if you don't drink beer.
You know so we want -- -- -- consistent in demand low financial leverage a lot of free cash flow results of their equity market cap.
And -- -- we -- -- rather punitive discount rate in our discounted cash flow calculation.
And we wanna buy at a discount from that valuation so.
We tend to be counter cyclical we tend to by women volatility is high and prices are moving around a lot.
I'd like -- that I'd like your reasoning behind why you should look for company.
That has a low level of debt Clinton because you the shareholder you say it should be paid before the bankers are.
Absolutely not I try to remind our shareholders that bankers the first anybody has a lot of debt to capital structure so the bonds are going to be paid the preferred to -- -- before the equity hole so.
We don't want anybody before waited and done -- -- -- we have have very little financial leverage or no leverage whatsoever -- -- your top holdings but coming up.
Markets went to name some of the names that fit perfectly into his list of how to pick a stock he's finding opportunities.
For the rest of the year in these names and we will pick them -- part coming.
