GLENN CHAN, 29
Includes shares in Liberty Media Corp., Altisource Portfolio Solutions SA and warrants on Kinder Morgan Inc.
About two years ago, Glenn Chan decided to "really understand" the mining industry. He dove deep - even to the point of studying textbooks on mineral exploration and mine development.
With the S&P/TSX Venture Index then trading at half its 2008 peak, he looked for bargains among junior miners. Instead, he found inflated assets, promotional hype, unreliable disclosure and weak investor protection.
How he invests
Mr. Chan is not so keen on the mining sector any more. He now focuses on finding "wonderful businesses at a fair price." Wonderful businesses can be identified by their "high, unleveraged returns on capital." If the founder is "a self-made billionaire who still runs the company," that's even better.
Liberty Media Corp., controlled by John Malone, trades at a discount to net assets even though these assets largely comprise stakes in two "wonderful" companies: satellite-radio company Sirius XM Holdings Inc. and cable firm Charter Communications Inc.
Altisource Portfolio Solutions is part of the U.S. mortgage-servicing empire of William Erbey. Its software enhances the operations of companies that collect payments from delinquent homeowners, mainly by arranging mortgage modifications that make it easier to pay.
Kinder Morgan, run by U.S. multibillionaire Richard Kinder, owns pipelines and storage terminals. It collects tolls on shipments of natural gas and crude oil from virtually every producing basin in North America.
He bought put options (the right to sell a stock at a specific price) in 2009 on tech firm STEC Inc. shortly after the CEO sold a large block of his shares in a secondary offering. The shares later took a hit after the company announced some bad news.
Investing in Qiao Xing Mobile Communication. Its shares were delisted from the NYSE in 2012 after it failed to meet reporting requirements.
Stick with great businesses and managers with solid track records.
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