Francois Rochon – The Compounding Machine

Investing

I’ve previously written about Francois Rochon, founder of Giverny Capital, but now I’d like to announce that Francois Rochon has joined the Capital Compounders Club on Facebook (join now!). I met Francois in December, 2016. He’ll be in the sequel to my book – Market Masters. Please join and welcome Francois, the Compounding Machine, to the group!

Francois Rochon founded Giverny Capital (est. 1998), a money management firm located in Montreal (Old Town), QC. Assets Under Management (AUM) are over $500 million. His investment philosophy comes down to “owning outstanding companies for the long term”, which means that Francois selects, and invests in outstanding ‘Capital Compounders’. See a list of Giverny Capital’s 13F holdings on Whale Wisdom: https://whalewisdom.com/filer/giverny-capital-inc….

The Rochon Global Portfolio has achieved a 15.9% annualized rate of return since inception, clearly beating the index. That means $100,000 invested in 1993, with Rochon, would have compounded into over $3,180,000 by the end of 2016. (source: http://www.givernycapital.com/…/Rendements-Rochon-global-en…). Francois is a Compounding Machine.

Here are Francois’ key points on investing, that he re-posted recently in the Giverny Capital 2016 Annual Letter:

  • We believe that over the long run, stocks are the best class of investments.
  • It is futile to predict when it will be the best time to begin buying (or selling) stocks.
  • A stock return will eventually echo the increase in per share intrinsic value of the underlying company (usually linked to the return on equity).
  • We choose companies that have high (and sustainable) margins and high returns on equity, good long term prospects and are managed by brilliant, honest, dedicated and altruistic people.
  • Once a company has been selected for its exceptional qualities, a realistic valuation of its intrinsic value has to be approximately assessed.
  • The stock market is dominated by participants that perceive stocks as casino chips.
  • With that knowledge, we can then sometimes buy great businesses well below their intrinsic values.
  • There can be quite some time before the market recognizes the true value of our companies. But if we’re right on the business, we will eventually be right on the stock.

More Reading:

8 Keys to Successful Investing- https://static1.squarespace.com/…/The_Keys_to_Successful_In…

Column in the Montreal Gazette-
http://montrealgazette.com/…/francois-rochon-special-to-the…

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