A Trove of Ideas from an Under-the-Radar Fund

Before we move into a weekend that promises to be full of manatees and football, I want to visit 13HF filings one more time. As expected, the rock stars of the investing world are getting all the attention: The largest hedge fund managers' quarterly moves are being watched like a hawk by the media. While I do review those filings, I find this activity less useful than I did years ago, when no one else was paying attention to them. These days, I get more value following the results from those firms that have great track records, but not as good a press agent.

One of the managers I follow each quarter is Donald Smith & Co. Mr. Smith has been a value investor for three decades, and has a style very similar to my own. The firm buys stocks trading below tangible book value that haven hidden or undervalued assets, as well as the potential for significant earning potential over the next two to four years. A little digging around the Web tells me the firm has delivered solid returns to investors over the past 30 years, and has better than doubled market returns. As with so many of my favorite managers, Mr. Smith has direct ties to the father of the value-investing discipline -- while at UCLA, he volunteered to help Ben Graham research stocks with low price-to-earnings ratios....541 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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