FidelityNow: Celebrating 10 years: Fidelity North American Equity Class
Fidelity Portfolio Manager Darren Lekkerkerker shares the investment philosophy that has guided the fund's success over the last 10 years.
Transcript
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So you mentioned, Darren, part of your investment philosophy that's
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credited to the success of the fund, knowing what you own and investing in high
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quality companies. If you can expand a little bit on that for the advisors on
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the line.
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So, I like to invest in high quality companies, so number one, I focus
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on the quality of the business.
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Is this a great business?
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Does it have a competitive mode? Is it going to be durable or can it
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expand over time?
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Management team. Everyone says they like good management.
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What does that mean? So, one, we interview them as part of the process, and we
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do so regularly, as I just did before
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coming here as I mentioned. To management on Like how much
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skin do they have in the game? Do they own a lot of shares?
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Like how many shares do they own?
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Versus like what they get paid like I want them to go home and think about
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increasing the share price not increasing their annual comp Right and
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then to capital location house management down at capital location
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What do they plan to do? We want them?
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To focus on doing the highest risk return adjusted thing
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for capital location which is investing the excess free cash flow of the
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company whether that's in M&A or Share buybacks or
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higher dividends and then three valuation
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pricey pay is important, and it has a big determinant on the return going
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forward. Having said that, I prefer a wonderful business at a
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reasonable price than a reasonable business at a wonderful price.
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So that's the kind of thing I'm doing.
