GMO Investment Strategy Competition
I flew up to present to GMO on spinoffs, a very Greenblatt-inspired idea. I'll try to find a way to post a copy of my presentation slides, but the meat of my strategy is as follows:
- Spinoffs / parent companies tend to improve operation metrics.
- This causes spinoffs to outperform the market in the 1-3 year time window.
- Mass institutional selling in the short-term can create attractive entry prices.
We were also treated to lunch with Jeremy Grantham. I was incredibly impressed by the breadth of his macroscopic thought, in contrast to my bottom-up stock picker's perspective. He quizzed us on a variety of topics I had never even thought of considering, such as the reasons why timber outperformed other commodities, and which discount rates would be appropriate in cost/benefit analysis of environmental action.
Unfortunately, I wasn't able to secure an internship through this process. But hopefully this success can serve as a positive signal to other prospective firms. Several classmates were confused that I was still quibbling over $100 price differences in airline tickets, and that I had no plans to spend my prize money. What can I say, I'm a value guy through and through.