One of Canada's most influential value investors stood at
a podium in front of a few hundred people at a conference in
Las Vegas last month to deliver his next compelling
Four times in the previous two years he had stood at that
podium, presenting a total of six stock picks. All six have
been winners, producing an average return of
His name is Guy Gottfried. Few people know his name outside of
the couple hundred devoted followers who shell out $4,000 to
hear him and other top hedge fund managers speak at the
Value Investing Congress. But with each winning stock pick,
his reputation grows.
Gottfried is the founder and manager of Rational Investment
Group, a value-oriented investment fund based in Toronto.
The fund employs a risk-averse, research-intensive
value methodology to uncover securities exhibiting
material upside potential along with minimal risk of
capital impairment. Prior to launching Rational, Gottfried
was an analyst at Fairholme Capital Management - a fund
managed by Bruce Berkowitz.
subscribers will recall that Berkowitz is the manager of the $8
Fairholme Fund (
At the time Fairholme was a top-performing fund,
earning Berkowitz the prestigious U.S. Equity Fund
Manager of the Year award from Morningstar.
The mutual fund was also a top performer in our portfolio,
returning 51% between February 2009 and June 2011.
Berkowitz was renowned for his Warren Buffett-like investing
approach, uncovering great companies at reasonable
valuations. His strategy helped Fairholme outperform the
S&P 500 for six straight years. Now, one of
Berkowitz's disciples is achieving the same kind of success
using Buffett's principles.
What's remarkable - and somewhat baffling - is how little
Gottfried is in the spotlight despite his growing celebrity.
He doesn't do TV interviews - you never see him on CNBC,
Fox News or Bloomberg. There is almost nothing about
him on the Internet. He hardly even promotes his own
But he does appear twice a year at an exclusive investment
conference. Professional investors flock to the Value
Investing Congress to hear presentations from the likes of
Bill Ackman, Leon Cooperman and David Einhorn. Lately,
this reclusive, little-known manager from Toronto
has outperformed them all.
I witnessed Gottfried's rising popularity first hand at a
recent Value Investing Congress in New York. During the
break after his talk, I noticed a crowd of people gathering
around him to discuss his presentation.
When I asked another attendee what all the fuss was about, he
explained that while Gottfried may not be a household name, he is
one of the conference's main attractions. People have taken
notice not only of the performance of his picks, but also the
depth and consistency of his analysis.
Six consecutive winners and 80% average returns tend to get
investors' attention. Especially when you consider that the
average holding period for those recommendations is just 13
Value Investing Congress attendees are lucky: he
only shares his favorite investment ideas at
this exclusive biannual conference. I was captivated by
Gottfried's research analysis. The quality of his investment idea
was the best of the 20 presentations I heard.
Gottfried obviously has a talent for managing money. And I
like the fact that this long-term value investor presents
his very best stocks at this exclusive conference.
His Rational Investment Group fund is averaging 28% annualized
returns. That kind of performance would attract an influx of
investors in the U.S. But the firm remains small and off the
radar, thanks to its location in Canada and Gottfried's desire to
In my mind, Guy Gottfried is on a path to becoming the Warren
Buffett of Canada. While he's still early in his career with just
four years of track record, his 28% return is outpacing
Buffett's average 19.7% return.
In my latest issue of the
, I present a stock that was recommended by Gottfried just last
month at the Value Investing Congress. The stock fits perfectly
into our investment portfolio and strategy, and could be another
Sometimes it makes sense to invest alongside one of the best
performing and most overlooked money managers in the world.