don‟t take controlled posi-tions. We don‟t try and
force things to happen any-more.
Activism is the newbuzzword. What do youthink about it?
There is nothing newunder the sun. We used
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Mr. Price began his ca-reer in 1973 when he joined Max Heine at Mu-tual Series. In 2001, heleft the firm to begin hisown fund, MFP Investors,LLC. He earned aBachelor in Business Ad-ministration from Uni-versity of Oklahoma.G&D:
You have been in-volved in distressed and spe-cial situation investing for along time. How has yourstrategy evolved and what isthe mix today?
Michael Price (MP):
Ithas evolved indeed. As asmall mutual fund at MutualSeries, we had no say. Wehad small amounts of stock.We could not influenceproxy fights. We always hadvalue and we always hadsituations involving corpo-rate control. When thefunds got bigger, we realizedthat we could use our signifi-cant influence for the better-ment of our position, andthat of all the other share-holders. We did that for awhile, and then I got out of the fund business. Now I amback to a small, family office
kind of fund, where we don‟t
have that clout, but we tryand influence directors andofficers just because of ourpoint of view that we think iswell thought out. That ishow it has evolved. We
“It Is The Judgment That Counts” —
“Big Companies In Small Industries” —
Paul Johnson managesNicusa Capital, a long-term concentrated fun-damental value hedgefund. He began his ca-reer as a sell-side analystat several Wall Streetfirms. He has previouslytaught Security Analysisand Value Investing atColumbia BusinessSchool as an adjunct pro-fessor.Mr. Johnson holds a B.A.from UC Berkeley andan M.B.A. from Whar-ton.G&D:
Tell us a little aboutyour background and howyou got into value investing.
Paul Johnson (PJ):
In theearly part of my career, I wasa sell-side technology analyst.I worked for various firmson Wall Street for twentyyears. I was one of the sen-ior technology analysts onthe Street during the techbubble of the late '90s andwatched that market crash,which had a big impact onmy thinking. That experi-ence reinforced how criticalthe intrinsic value of the un-derlying company is to theultimate performance of astock. One can try to playthe game of outguessingwhere a stock price is going,
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Spring 2011Issue XI1
Editors:Garrett JonesMBA 2011Daniel KaskawitsMBA 2011Anna BaghdasaryanMBA 2012Joseph JaspanMBA 2012
Inside this issue:
Pershing SquareCapital Challenge
2010 Graham &Dodd Breakfast
Michael PriceContact us at:
Visit us at:
Graham & Doddsville
An investment newsletter from the students of Columbia Business School