Great piece on seeing value where others fail to. By Jon Birger, Fortune senior writer.
..”Now, normally I don’t recommend a stock based on the premise of a lone fund manager. So why then did I make an exception for Olstein? Well, Olstein is an independent thinker in a business overpopulated with sheep. He’s also a stickler for accounting rigor and disciplined financial management – someone who’ll ask tough questions when he sees a disconnect between earnings growth and cash flow, for instance.
“At least that’s how I rationalized it in my head. In reality, the clincher was something more amorphous: Olstein was sure he was right. It’s rare to hear a top fund manager express an extremely high level of conviction about any one stock. The typical money manager is so eager to be quoted in Fortune that if you crinkle your nose at one of his picks, he’ll happily shift the conversation to the next. But when I raised doubts with Olstein about RadioShack (“Bob, have you been in a RadioShack lately?”), Olstein chewed me out.
“What I was chiding you about was this,” Olstein now says. “Everybody wants to deal only with what they see, and what they saw with RadioShack was problems, problems, problems. Fact is, the only way you can get really good value is when everybody sees what they see, and you see something else.”