In this show we interview the manager of one of our favorite mutual fund families, Ariel Mutual Funds. John W. Rogers, Jr., Chairman, CEO, and Chief Investment Officer of Ariel Capital Management, LLC. Ariel Capital Management runs the Ariel Mutual Funds, whose creed is “Slow and steady win the race”. As if to prove this point, November marked the 20th anniversary of the Ariel Fund and Ariel Capital Management now manages over 16 billion dollars.
John believes that using a long term, patient approach to investing yields excellent returns without excess risk. He strives to invest in quality companies, defined as having high barriers to entry, sustainable competitive advantages, and predictable fundamentals. Ariel concentrates on industries they have a particular expertise in, which they believe gives them a long term advantage over investors with a “jack of all trades, master of none” approach. Finally, John and his team at Ariel focus on value. They are independent thinkers looking to invest in great companies that may be out of favor, resulting in low valuation relative to potential earnings or intrinsic worth.
Using this investment philosophy coupled with a focus on community and integrity (Morningstar gave Ariel their highest Stewardship Grade) John has built Ariel into one of the most respected fund families in the world. In this interview, John talks to Peter about:
- How his father got him interested in investing, and how to get other children interested.
- How to make money by focusing on companies that are less researched and finding pricing anomalies.
- Why you should focus on understanding a particular industry really well and investing in what you know and understand.
- How to find quality companies to invest in.
- The value of independent, contrarian thinking as investors. (And why you’re born with it or not!)
- The personal qualities that are a necessity to have in leaders of companies you invest in.
- How Ariel started and supports an amazing partnership with the Chicago public school system to teach children how to invest and supports their dreams of a college education.
- What types of investment managers will prosper in the next few years (Hint: it’s not indexing!).
We hope you enjoy this show, and until next time, here’s to your success!