Q&A with Mason Hawkins 2006

Sub-advisor to the Masters’ Select Equity and Masters’ Select Value Funds

The opinions and conclusions expressed herein are those of Litman/Gregory Fund Advisors, LLC and Mason Hawkins at the time the material is written and may not be reflective of current conditions.

Mason Hawkins is a sub-advisor in the Masters’ Select Equity and Value funds. He is the lead portfolio manager for the segment of the funds’ assets run by Southeastern Asset Management, Inc. (“Southeastern”). Hawkins has been in the investment business for more than 30 years and founded Southeastern, which he controls, in 1975. He has managed the Longleaf Partners Fund since its inception in 1987.

What first attracted you to the investment business?

My Dad gave me copies of Ben Graham’s "The Intelligent Investor and Security Analysis" when I was in high school. They were persuasive.

How did your investment philosophy develop?

It evolved from reading Graham early and often as well as observing, discussing, and reading Warren Buffett’s investment addendums.

Can you briefly discuss the key elements of your stock picking discipline?

Business, People and Price. Margin of safety with all candidates qualifying both quantitatively and qualitatively.

What factors have been most important to your success?

Discipline and patience.

How do you and your team work together and how do the research efforts of the team contribute to the portfolio you run for Masters’ Select?

All investments require team consensus.

As you and your team research companies, what are the most important sources of information?

Public data such as 10Ks and 10Qs; discussions with competitors, managements, board members and trade journals.

How does running a very concentrated portfolio that is part of a diversified fund differ from running a more broadly diversified portfolio? How do you choose the 8 to 15 stocks you hold for Masters’ Select from your more diversified portfolios?

We allocate to the 8-12 most attractive price-to-value relationships with a qualitative overlay.

Neither the information contained herein or the opinions expressed shall be construed as an offer to sell or a solicitation to buy any securities mentioned herein. Click here to view the most recent portfolio holdings of the Masters’ Select Equity Fund. Click here to view the most recent portfolio holdings of the Masters’ Select Value Fund.

The term price to value describes the relationship between the market price of a security and the intrinsic value assigned to that security by an investor.  

The Fund may invest in foreign securities, which exposes investors to economic, political and market risks and fluctuations in foreign currencies. The Fund may invest in the securities of small companies, which subjects investors to additional risks, including security price volatility and less liquidity than investing in larger companies.

The Fund is non-diversified, which means it concentrates more of its assets in fewer securities than a diversified fund.

To obtain a current prospectus for the Masters’ Select Funds at no charge, please click here or call 1-800-960-0188. The prospectus contains more complete information with respect to the risks, costs and expenses of investing in the Funds. Please read it carefully before investing.

For industry terms and definitions, click here.