Morris Mark: Wally, good to speak with you again. Mark Asset Management Corporation runs long-bias and long-only hedge fund strategies through our fund partnerships and managed accounts. We are fundamental, growth-oriented investors who launched our flagship, long-bias strategy over 30 years ago and have advised long-only managed accounts for over 28 years.
Our core objective is to build value — to generate substantial appreciation. Our firm has significantly evolved over the past 30 years and I’ve spent a lot of time bringing in the right people, focusing on our processes and risk management to accomplish our objectives.
We don’t invest with a tax motivation in mind, but to the extent that we are successful, it tends to be very tax efficient. We tend to hold our positions for an average of about three years.
Our core approach is to buy great businesses, run by great managements. We particularly like companies operating within sectors of the economy where we believe there’s a great opportunity for that business to build value,
as a result of a change in structure of the industry, and/or a significant change in management or a legal development — or anything like that, which we believe establishes a longer-term trend that a really good company can capitalize on.
In terms of where we are today, I think that probably the best thing to do is to review what we said six months ago, which is the last time we spoke with you, because each of the two ideas we mentioned at that time are companies we continue to be invested in.
The first one is Apple (NASDAQ: AAPL), which we believe is the world’s leading consumer franchise, one of the most innovative manufacturers of mobile computing devices in the world.
Even though it is the biggest company in the S&P, because it does and will continue to operate on a world scale, we think it has tremendous room for growth. And when one looks at the valuation that’s placed on the stock, it’s statistically very attractive and we like the management. So the stock’s been a pretty good stock this year. It’s backed off recently because of concerns about its business in China, which we highlighted as a growth area.
We believe that the renewal of those concerns just makes the opportunity at this point even more interesting. While China’s going through an adjustment — and we’re not sure that the government has got it all right yet — we believe that over time, they will.