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
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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