Hortz: How have you deployed your thinking into Goodhaven portfolios since you became sole portfolio manager at the very end of 2019? Can you give us some examples?
Pitkowsky: During the market crash surrounding Covid-19 in February and March of 2020, we used that period to upgrade the portfolio, adding capital to some new and existing high-quality growing companies, all purchased at prices significantly below our conservative estimates of intrinsic value. This list includes: KKR, Berkshire Hathaway, Progressive Insurance, Bank of America and more.
In addition, we have maintained a material weighting in energy given our view of the unusual circumstances present in that industry today. We also previously increased our holdings to companies that might benefit from higher interest rates, ahead of the recent moves up in interest rates. Finally, we have tried to be aware of the macro backdrop, but not let it hinder us from searching for new investments. All of this appears to have served us well given our results since early 2020 versus comparable indexes and peers.
Other changes in the last few years include a smaller weighting in gold, less cash on average, portfolio holdings that are less levered, and additional businesses that have sustainable competitive advantages and attractive tailwinds.
I would like to add that it is significant that GoodHaven’s anchor investor and largest minority partner since inception is Markel Corp based in Richmond Virginia. In 2019, Markel materially added to their assets managed by GoodHaven fully supporting GoodHaven’s continuing evolution.
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