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Jonathon Jacobson and Staley Cates – 25 Years of Shared Values in Value Investing

Episode 17 / May 2021

Southeastern's Vice-Chairman Staley Cates interviews highly respected peer and long-term friend of the firm, Jonathon Jacobson, Founder of HighSage Ventures and former CIO and Co-Founder of Highfields Capital.

Staley and Jonathon have a wide-ranging discussion, covering the past, present and future of the industry. They begin with Jonathon’s decision to close Highfields and return investors’ capital in 2018, amidst a backdrop of value being dramatically out of favour [4:39 – 10:44]. Jonathon then touches on the work that his family foundation, the One8 Foundation, is doing and the long-lasting impact of COVID on education [10:45 – 16:19]. Next, Jonathon shares his reflections and insights on investing after having stepped away from the computer every day [16:20 -23:30]. He discusses value vs. growth and how those traditional measures have morphed over time, touching on some of the biggest mistakes he believes value investors have collectively made [23:31 – 28:10]. Staley and Jonathon then discuss active vs. passive and how the institutional investor committee mindset has shifted [28:11 – 32:17]. Jonathon delves deeper into how his investment philosophy has developed over the last two decades [32:18 – 35:47]. Next, he addresses the recent SPAC mania and GameStop frenzy, contrasting this with the long-term value of shorting and highlighting his experience shorting Enron [35:48 – 45:33]. Next, Jonathon discusses lessons learned from setting up an asset management business, including key takeaways on getting the right structure, hiring the right talent and the need to evolve over time as a firm grows [45:34 – 49:26]. Staley and Jonathon discuss interest rates and inflation as a risk to the industry [49:27 – 53:28] and then discuss great businesses and management teams on Jonathon’s wish list, covering a few shared war stories along the way [53:29 – 58:24]. Jonathon talks about the importance of a long-term focused client base [58:25 – 1:05:10], shares some of his favorite reads [1:05:11- 1:06:26] and ends by talking about his future plans [1:06:30 – 1:08:09].

 

The information presented is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Securities identified do not represent all the securities purchased, sold, or recommended to advisory clients. The views and opinions expressed by the Southeastern Asset Management speakers are their own as of the date of the recording. Any such views are subject to change at any time based upon market or other conditions. Southeastern Asset Management disclaims any responsibility to update such views. These views should not be relied upon as investment advice. And because investment decisions are based on numerous factors may not be relied upon as an indication of trading intent on behalf of any Southeastern Asset Management product. Neither Southeastern Asset Management, nor the speakers can be held responsible for any direct or indirect loss incurred by applying any of the information presented. Mr. Jacobson’s experience is unique and any other Longleaf shareholders experiences may vary. Past performance does not guarantee future results, so your returns may be more or less than those experienced. No fee was paid to Mr. Jacobson for his participation in this podcast.