Chit Chat Stocks The Best Value Investor You’ve Never Heard Of (Norbert Lou Of Punch Card Management)
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Jan 17, 2024 Norbert Lou, famous for his NVR investment, discusses his unique portfolio concentration and starting his hedge fund Punch Card Management. Topics include the advantages of a smaller fund, fund manager ownership, the performance of NPR in the portfolio, and the risks and benefits of a concentrated portfolio.
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Seed Capital From His Mother
- Norbert Lou's mother gave him $60,000 of her retirement to manage while he was in college.
- He turned that capital into excellent returns and it launched his investing career.
How He Discovered NVR
- Lou found NVR after spotting a large buyback and dug into its asset-light land-option model.
- He bought at roughly $23 in 1997 and held as the position became a dominant winner.
Asset-Light Model Drives Durable Advantage
- NVR used an option-on-land approach that minimized inventory and balance sheet risk for a homebuilder.
- That asset-light model plus local scale gave it durable advantages and superior returns.