Longleaf Funds Holds Annual Shareholder Meeting

Southeastern Asset Management, which runs the Longleaf Fund family, held its annual shareholder meeting on May 7 and had an optimistic outlook for stocks over the next five years. Bradway portfolios have investments with the Longleaf Partners Small-Cap fund, which this year has posted a gain of 13.2 percent. That's 11 points better than its benchmark, the Russell 2000 index.

Fund manager Mason Hawkins noted that the historic drop in stock prices between September and March 9 was the largest decline since 1932. While many investors panicked, Longleaf enthusiastically purchased stock in high-quality companies at very attractive discounts. “What distinguished this bear market from all others was the fact that many best-in-class industry leaders were offered at less than half of conservative appraisals,” Hawkins said. “The fourth quarter of 2008 teed them up for long-term investors like no time before.”

The fund concentrates on buying companies with strong management, a clear competitive advantage and financial strength. “We’ve never owned better companies at cheaper prices across the board in the three Longleaf Funds that we owned on March 9, 2009, and we confidently believe we have the best foundations in place to produce the funds’ best returns,” Hawkins said.

The firm believes the stock market will move much higher over the next five years.

Manager Staley Cates answered several common questions about investing in a bear market. His answers are worth reading. To read the full transcript of the report, click here. If you'd like to view the slides that accompany the presentation, click here.