I can bet that most of you would not have heard of Francis Chou. He is one of the most successful fund managers in Canada. I recently saw a series of video talks on the website of the Richard Ivey School of Business at the University of Western Ontario. Among these videos, I found Francis Chou. Its a must see. He is such a simple man and speaks simply and elegantly.
His story is simply remarkable. Francis came to Canada from Allahabad, India at the age of 19 in 1976. He only had a 12th standard education. He was working in Bell Canada as a telephone repairman. Not satisfied with this career, he wanted to do more with his life. He came across an articles about Ben Graham and read the Intelligent Investor. He then became enamored by Value investing and read everything he could about Graham, Value Investing, Buffett and so on.
He then started an investment club with about 50,000 dollars with contributions from 5 other co-workers. In 5 years, he had turned it to 1.5 million dollars. Later on, he converted it to a mutual fund called as the Chou Funds. He had two funds for a long time. The Chou associates fund has a 15 year plus track record. Annualized 11%. The Chou RRSP fund has 12% annual return over 15 years. Later in 2000’s he added 3 more funds ( Asia Fund, Europe Fund, Bond Fund). In 2010, he started two funds in the US. Chou Equity Opportunity fund and Chou Income Opportunity Fund. See http://chouamerica.com/
In 2008, his fund performance suffered like most investors. However, he was confident that his style of investing – the value style would work. He did well in 2009 but I dont have exact numbers.
He has three strategies. The first one he practiced is the typical Graham method of net-nets. An excellent website for net-nets is http://stocksbelowncav.blogspot.com/
Another strategy is special situations. He did not talk much about this in the videos. He mostly talked about net-nets and his favorite style.
The one that he likes the most is the Buffett style which is to buy quality companies at cheap prices.
Another aspect that blew my mind is that he has another job and manages his funds pretty much on the side. He works with Prem Watsa at Fairfax Financial. Prem Watsa is a renowned value investor and is considered as the Buffett of Canada.
I was certainly motivated to learn about Francis Chou and hear him. Maybe one day, I will meet the kind man.