Navigating AI and Investment Dynamics

Gary Channon is one of the UK’s better known valueinvestors. He runs a value fund, a closed-end fund and a private equity vehicle.  He runs a highly concentrated portfolio. The top 5 positions are over 50%, and he holds no more than 15 stocks.

I asked him on the podcast because he is really thoughtfulabout his process – he only buys stocks selling for <50% of intrinsic value, and if he can monitor the business performance independently of the companycommunications. He is then prepared to hold them for extended periods, as long as they remain cheap.

His framework for evaluating a stock includes parameterslike the depth of work completed and confidence levels, he has instructed his entire research team to become AI experts and he has already seen significant benefits; he thinks AI means sellside analysts will be more or less gone in twoyears; and we talked about his techniques for interviewing management which include spending 4-6 hours preparing for a 1 hour meeting.