Mark Asset Management is a New York City-based hedge fund, founded back in 1985 by now renowned investor – Morris Mark. The very beginnings of his professional career were law oriented as he graduated from Harvard law school, and the beginnings of his career in investing were at First Manhattan where he was an institutional analyst. Later on he went on to join Goldman Sachs where he was senior analyst and a member of the risk arbitrage department. During his long investing career, Morris Mark was voted on to Institutional Investor magazine’s “All-America Research Team” for 15 consecutive years. He is the current President, CEO, CIO, and Managing Partner at Mark Asset Management Corporation, co-running the investment development and research team, and is in charge of risk decisions and portfolio management. Besides holding JD from Harvard Law School, he also earned a BA in Economics from Brooklyn College.
In a recent interview for Value Investor Insight, Morris Mark shared his views on the market, several companies, and some principles his fund is guided by. He explained that the most important things for analyses of a potential stock to buy are its “industry structure, its management quality and what its future looks like”. Contrary to the popular belief that the market is more efficient than it was many years ago, Morris Mark finds it just very rational. He further clarifies this by presenting the fact that “The collective thinking of millions of people can be incorporated into share prices in milliseconds”, which, according to him, reveals us only how much is something worth at the moment, but it is not telling us anything about its future value. And there is nothing more important to investors than forecasting a stock price.
Morris Mark’s fund even though is not limited to it is more attracted to bigger companies such as Amazon (AMZN), for example; for which he said its appeal lies in its practice of seeking ways to enhance its business, and its management quality. As for The Coca-Cola Company (NYSE:KO), whose stock Mark Asset Management doesn’t own anymore, he said that it needs to either invent a new version of Coke or something else that would answer to the current massive consumer needs which are more healthy-oriented. Seeing that his grandchildren don’t drink it at all, he understood that the company doesn’t have a bright enough future with new generations to come, in spite of having a high-quality management team and still being a great brand franchise.
Mark Asset Management relies on its four core investment strategies, those being – Focus Strategy, Long-Biased Strategy, Long-Only Strategy, and Growth and Income Strategy. Its investment philosophy turned out to be very wise, as the fund reported outperforming the S&P 500 by an average 140 basis points annually since inception, whereas its Long-Only strategy brought back a net annualized 13.5% since its inception in 2003, also beating the S&P 500, which posted gains of 9% over the same period. Its flagship long-biased hedge fund strategy, Mark Partners LP, returned 38.80% in 2013, 1.10% in 2014, 5.79% in 2015, 1.70% in 2016, and 28.45% in 2017. Last year through October it brought back 10.37%. Mark Partners LP had a total return of 4730.66% for a compound annual return of 12.37%, while its worst drawdown was 76.22. According to its plain brochure, at the end of 2016, the Mark Asset Management held around $456.81 million in assets under management on a discretionary basis.
At the end of the fourth quarter of 2018, Mark Asset Management’s equity portfolio was valued at $369.86 million, down by 12.47% from the previous quarter when it held a value of $422.57 million. During the quarter the fund added and dumped 11 positions, having 55 positions in total at the end of it. The biggest position was in already mentioned and praised Amazon.com, Inc. (NASDAQ:AMZN), which seemed to have been appreciated by many smart money investors seeing that it was the second Most Popular Stock Among Hedge Funds in Q4 of 2018. The fund held 17,140 Amazon’s shares, with a value of $25.74 million, accounting for 6.96% of its 13F portfolio.
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Out of the 11 positions the fund decided to dump during Q4 2018, the biggest ones were in Micron Technology, Inc. (NASDAQ:MU), Electronic Arts Inc. (NASDAQ:EA), and Las Vegas Sands Corp. (NYSE:LVS). Mark Asset Mangement said goodbye to 20,000 Micron’s shares, that were valued $905,000, 3,469 Electronic Arts’ shares with a value of $297,000, and it also dropped its position in Las Vegas Sands Corp. that previously counted 5,000 shares, worth $297,000
Click here to read the rest of the article and if you are interested to take a look at some other important Mark Asset Management’s holdings at the end of 2018.
This article is originally published at Insider Monkey.