That's not to say Martin doesn't see any companies that are good investments. A true value investor, he looks for bargains. In the early 1990s, one that he found was Toll Brothers. Now he thinks builders are too obvious of a play with the pick up in some housing markets, but some suppliers might be good bets. "One of the nice things about the Lowes or the Home Depots is that they supply both new construction and renovation, the updating of older houses," he says. "If there's something going on in housing that involves capital spending, whether it's new or used houses, they are likely to be involved."
Another example of a company he keeps his eye on is Gentex Corp., an auto parts maker whose stock was punished after missing second-quarter earnings estimates by 1 cent but saw 15 percent revenue increases. Martin likes Gentex's business model and believes the company has great managers and sustainable advantages that in part come from working with every major car manufacturer in the world.
In reflecting on what kind of investor would find the Martin Focused Value Fund appealing, Martin says it would likely be someone who thinks like a retired farmer -- in fact some from Indiana's corn country have already invested in the fund. "He doesn't know what instant gratification is," Martin says. "He's someone who can understand that there's a little difference from when you plant until when you harvest."
-Dorothy Hinchcliff