The Daily News spoke to Larry Coats

The Daily News spoke to Coats about his strategy and how investors should respond to the market's gyrations on Aug. 27, 2007.

• Most people do a lot of due diligence before buying a car or investing in real estate. But investment decisions are often based on hunches at a cocktail party or what's read in a periodical.
• Think logically, be rational.
• If investors can have a long-term horizon, there are some great investment opportunities.
• Yes, there is increased volatility in the short term. In the long term, the volatility tends to be more on the upside.
• We waited and bought Oracle, eBay and Microsoft.

Direct Link - When stocks stagger, focus on the basics.

Businessweek Interview with Larry Coats

BusinessWeek's Karyn McCormack met with Larry Coats in New York on Aug. 14, and they talked about how he's navigating the market storm. Like Warren Buffett, Larry Coats of Oak Value Fund sticks with companies that are understood and valued.

I highlight some insights from this interview :

• Risk always gets mispriced. It becomes mispriced on the positive side, and then somewhere along the way it gets mispriced on the negative side. And therein lies the opportunity for people who are willing to take a long-term view.
  
• We sell for one of three reasons. Either a stock reaches our price target, we have a change in the fundamentals—which is a nice way of saying our investment thesis was wrong—or we have a better opportunity.
• We're attempting to buy a stock at 65￠ or 70￠ on the dollar, so a 30% to 35% discount.
  
• We use a discounted cash-flow model, using an 8% discount rate. The magic in that sauce is not around the discount rate, it's around the terminal multiple that you put in the valuation equation. Because at the end of year five, you have to assign something as the present value of the future cash flow.
  
• 3 basic principles of Benjamin Graham
• One is if you're going to own equities, you should own them as businesses, recognize that they're not pieces of paper, and understand the business.
  
• Two, always require a margin of safety.
  
• And know what the business is worth—the valuation discipline is important.
• People are selling things because they don't know what they're worth. This is a great time to be able to say: I know what this business is worth. It makes it a lot easier to sleep at night.
• Worry is a wonderful thing. One of the interesting challenges is people become so overwhelmed by the emotion, and by the fear (of what, they don't know).
• It's one thing to know what you don't know, but it's another thing when you realize how much you don't know.
  

Direct Link - Riding Out the Storm with Quality Stocks.

*You can also watch "MarketWatch Interview with Larry Coats (Video)".

MarketWatch Interview with Larry Coats

MarketWatch had an interview with Oak Value Fund's manager Larry Coats on Aug. 14, 2007. Larry Coats says the recent market selloff underscores the importance of investing in companies with strong balance sheets. He also talks about three financial companies trading at a discount.

Here is video link - Oak Fund : Three Financial Value Plays.
Or you can watch directly below.

• Related Links :
• Interview with Larry Coats, Oak Value Fund (Video)
  
• Oak Value Fund 2007 Q2 Investment Adviser's Review
  

Oak Value Fund 2007 Q2 Investment Adviser's Review

Oak Value Fund release their 2007 Q2 Investment Adviser's Review. I highlight some points below :

• Investment Philosophy
• Disciplined focus on buying higher quality, sustainably advantaged businesses where the risks we assume are more than appropriately reflected in the prices that we have paid.
  
• Our task is not that of completely eliminating risk or uncertainty. Alternatively, we believe that our charge is to identify, understand and price risk and to take advantage of that mispricing when we believe the rewards are attractive.
• Portfolio Review
• Portfolio Performance Contributors :
  
• Apollo Group, Fidelity National Information Services, 3M, Praxair and Constellation Brands.
• Portfolio Performance Detractors :
• eBay, Berkshire Hathaway, Omnicare, Medtronic and Viacom
• New Positions
• Medtronic, Omnicare, United Parcel Service
• Eliminated Positions
• Masco, Time Warner, Tyco International
• Update on Largest Holdings…
• Apollo Group, Berkshire Hathaway, Fidelity National Information Services, E. W. Scripps, Praxair
• About Worry
• It is human nature to worry about recent events or factors which are apparent with the benefit of hindsight.
  
• An obvious example of this “worry” is the presumption that the shares of a company contain more “risk” after a decline that has been caused by some short-term disappointment or surprise.
• The ultimate risk that we attempt to guard against is that of a permanent loss of capital.
• We believe that it is more important to “worry” about that which may happen as opposed to that which has happened and to make sure that we have reflected such in our decisions.
• It is most important that an investor “worry” about the things that are relevant to long-term business models and the valuations thereof.
  

Disclosure : I don't have any of these equities listed above.

Direct Article Link (PDF).

The Motley Fool Interviews with Oak Value Capital managers David Carr and Larry Coats

The Motley Fool had an interview with Oak Value Capital managers David Carr and Larry Coats in January 2007.

• Part-1 : Meet the Managers
  
• Part-2 : Meet the Portfolio
  
• Part-3 : More on the Portfolio
  
• Part-4 : Know the Business
  
• Part-5 : Just a Little Patience
  
• Part-6 : On the Lighter Side
  

Interview with Larry Coats, Oak Value Fund

Morningstar Justin Fuller chats with the Oak Value Fund co-manager Larry Coats. Here is video links.

• Morningstar Interview with Larry Coats - Part 1
• Morningstar Interview with Larry Coats - Part 2

Or you can watch directly below.
Part-1

Part-2

Barrons also interviews with Larry recently - A Buffett Disciple with Mixed Results .

Larry discusses some of his picks like BRK, AXP, JNJ, EBAY, ORCL, SSP, MMM etc. in these interviews.

Disclose : I don't have any of these stocks listed above.