Robert W. Gottesman
In his own words:
At the core of being a Portfolio Manager is my more than 30 years of experience as a Securities Analyst. I am “value oriented” in terms of the price I am willing to pay. I look for companies trading at a meaningful discount relative to the share price a knowledgeable and willing buyer would pay to a willing seller to purchase the entire company.
In doing my research prior to purchasing shares in a company—both for companies I am researching and for companies our Analysts have recommended—I emphasize the following:
- Thorough analysis of a business’s financial statements
- An assessment of the company’s competitive advantages (or lack thereof) versus its peer group
- An understanding of the key drivers for the company’s historical revenue growth and profitability
- Identification of key risks that could affect the company’s business or value of its assets
- Evaluating management’s track record in operating the business
- Overall assessment of risk/reward looking out over a 3 – 5 year timeframe
My objective is to identify and own “good businesses” over long periods of time. I believe in paying a reasonable stock price relative to the value of the business taking into account both the present value and how the value of the company can grow in the future. Some stocks I have purchased are companies whose longer term prospects are decent, yet current performance has either disappointed or the industry in general is out of favor. In these situations, discount to value is even greater and opportunity for above-average returns is even greater. I have also purchased companies undergoing change—either new management coming from outside the company or the company spinning off a business as a separate publicly traded company. A typical seasoned portfolio is comprised of about 25 stocks (individual positions of 3 – 4% weightings). Under the right circumstances, portfolios might have a higher weighting based on individual stock positions having appreciated over time. It has been beneficial for my clients to avoid hard and fast rules to automatically sell down a stock position once it gets to a certain percentage.
I believe that First Manhattan is the ideal place to be a Portfolio Manager; the firm is small enough to allow interaction among and between Portfolio Managers and Analysts, and large enough to give Portfolio Managers access to the full breadth of research that our colleagues are doing. Our firm’s size commands the attention of our portfolio companies and prospective portfolio companies, and ensures that we have access to the key managers at these companies.
I believe strongly in alignment of interests with my clients and view them as my co-investors along with the family accounts I manage.