Barron\'s - 02.09.2019

(Axel Boer) #1

September 2, 2019 BARRON’S 21


Photograph by Theo Stroomer


Mutual Funds


required to generate eight new ideas a


year. That enables them to dig deeply


into their research.


Hinmon, who is also chief investment


officer of Motley Fool Asset Manage-


ment, or MFAM, has a more conven-


tional résumé. He began his career in


2003 as an analyst for three separate


money-management businesses run out


of the same office in Naples, Fla. One


was a wealth management firm where


some client portfolios had holdings for


20 or 25 years; another was a private-


equity firm that often invested in small


businesses. This taught Hinmon that


“the numbers don’t always tell you ev-


erything. You’re making bets on people


and on strategy.” He ran a hedge fund


during the financial crisis, from 2007


until 2010, where he learned the distinc-


tion between poorly run companies and


years, its 8.6% annualized return has


beaten 88% of its peers in Morning-


star’s World Large Stock fund cate-


gory; over the past decade, 92%.


But how do you find companies in a


universe of thousands of stocks, without


using screens? Hinmon’s solution is his


diverse staff—six analysts and co-man-


ager Anthony Arsta, who don’t all come


from the financial world. “My team has


educational backgrounds in pharmacol-


ogy, mechanical engineering, education,


law, banking, computer science, and


then finance,” he says. “The intersec-


tion and interaction of those back-


grounds really lead us to a place where


we achieve unique insights.”


Hinmon employs a concentrated


strategy; the $487 million fund owns 40


to 50 stocks and holds them for several


years. The eight team members are


TalkingWithBryanHinmon


PortfolioManager,


MFAMGlobalOpportunities


Team


Diversity


Fuels


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ByLewisBraham


MOST MONEY MANAGERS, EVEN THOSE


who consider themselves hands-on,


“kick the tires” types, usually start


with a computerized quantitative screen


of their entire stock universe to narrow


down potential investment candidates.


Not Bryan Hinmon. “If we started from


a quantitative place, we’d end up in the


same place as everyone else,” the man-


ager of the MFAM Global Opportuni-


ties fund says. “We’re interested in


running portfolios that have a chance of


outperformance.”


Hinmon’s logic makes sense: If you


want to beat the market and competi-


tors, you have to discover the unique


qualitative advantages in companies


that a quant screen or a factor-based


fund can’t detect. MFAM Global Oppor-


tunities (ticker: FOOLX) has benefited


by this approach. Over the past five

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