Transcript Ginsberg Family Trusts - JACOBS INVESTMENT MANAGEMENT

August, 2010
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Research-driven investment philosophy.
Focus on intrinsic business value.
Multiple approaches to valuation.
Bottom-up portfolio construction.
Disciplined decision process.
Independent thinking can lead to better
investment performance.
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Investment Philosophy
Three key attributes:
1. High-quality businesses trading at a discount to
intrinsic value.
2. Businesses whose value will grow over time.
3. Honest, capable management teams that think
and act like owners.
Would you want to own the whole business? If
not, don’t buy the stock.
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Price and Value Converge Over
Time
VALUE
Value
140
120
PRICE
Value grows over time.
100
Stock rises as price/value gap closes.
80
60
40
Identify stock at a
discount to value.
20
0
Time
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Example: Accenture (ACN)
Information as of 7/31/10. Not intended as a recommendation.
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High returns on capital.
Strong free cash flow due to low capital needs.
Consulting business attracts “best and brightest.”
Outsourcing business has global workforce, low
cost structure.
• Buying back 15-20% of stock over 5 year period.
• $4b in cash, virtually no debt.
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Portfolio Management
• Avoid over-diversification by holding 20-30
securities.
• Full range of market capitalization, no artificial
limits.
• Weightings reflect risk, confidence in outcomes.
• Long-term time horizon reduces turnover.
• Asset allocation based on needs of client.
• Conservative bond portfolio reduces credit and
interest rate risks.
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Representative Equity Portfolio
Industry holdings are based on clients portfolios as of 7/31/10. Holdings are subject to
change and are not intended as recommendations.
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Financial Planning
Investments
Employee Benefits
Estate Planning
Insurance
Retirement Planning
Education Planning
Jacobs Investment Management provides advice in all
areas above but does not sell insurance or provide service
in any area other than investment management. Financial
planning fees are based on an hourly rate, but there is no
fee for investment clients.
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