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Portfolio Manager Krishna Mohanraj Finds Success with Diamond Hill's International Fund
Background and Expertise
Krishna Mohanraj joined Diamond Hill Capital Management in 2012, just as the investment firm was expanding its international expertise. With experience and abilities gained from living and working across three continents during tumultuous market periods, Mohanraj was a perfect fit for Diamond Hill's International Fund. Today, he manages the highly successful International Fund (DHIAX), which has quickly established itself as a top performer in its category, with a three-year track record placing it in the top 5% of its peers.
Active Stock Picking in the International Market
Mohanraj emphasizes the importance of active stock picking in the international market. With so many underperforming businesses, the benchmark is weak, making it an ideal place for active investors. To construct his portfolio, Mohanraj and his team thoroughly analyze tens of thousands of international stocks, selecting roughly 1000 names that they consider investable. From this list, they further refine it to just 54 highly differentiated stocks.
A Unique Approach to Portfolio Management
Mohanraj describes his portfolio as a highly curated selection of businesses that they understand very well and that they believe offer the best opportunities. One example of Mohanraj's strategy is his investment in Dino Polska SA, a fast-growing Polish grocery retail chain. Despite being relatively unknown, the company has carved out a niche market by operating in rural areas outside of large cities and focusing on areas closer to wealthy Germany. Poland's unique market, coupled with its smaller-sized housing and frequent grocery shopping habits, has contributed to Dino Polska's growth and success.
The Benefits of Differentiated Stocks
Another company that Mohanraj favors is Nintendo, the Japanese video game company known for its multigenerational appeal. Mohanraj believes that investing in differentiated stocks, like Nintendo, can lead to significant returns. While he keeps a close eye on market conditions and investment theses, he ultimately decides to sell his investments either when they have enjoyed a significant run-up or when the investment thesis doesn't pan out as expected.
A Diverse and Confident Portfolio
In addition to Dino Polska and Nintendo, the International Fund has diversified its bets across other firms, including Fairfax Financial, a Canadian holding company founded and run by V. Prem Watsa, often referred to as the "Warren Buffett of Canada." Mohanraj is confident in his portfolio's ability to outperform the benchmark and believes that these well-researched investments are crucial in times of corporate governance concerns, global geopolitics, and uncertainty.
A Passion for Learning
Krishna Mohanraj's passion for stocks started with reading Warren Buffett's letters to Berkshire shareholders. He credits his strong team for their shared interest in hunting for good businesses. Every day feels like a learning opportunity for Mohanraj and his team, who continuously test their assumptions and seek out new knowledge.
In conclusion, Krishna Mohanraj's expertise and experience, combined with Diamond Hill's International Fund's differentiated investment approach, have proven to be a winning combination. With a top-performing track record and a strong emphasis on active stock picking, Mohanraj manages a curated portfolio that offers the best opportunities for long-term growth in the international market.
Conclusion: New Business Insights from Krishna Mohanraj's Success
Hot Take
Krishna Mohanraj's success as a portfolio manager offers valuable insights for new businesses seeking to navigate the competitive market landscape. His active stock picking approach in the international market highlights the importance of diligent research, differentiation, and adaptability. By applying the principles utilized by Mohanraj, new businesses can identify unique opportunities and establish a strong foundation for long-term growth.
Lessons Learned
Mohanraj's emphasis on thoroughly analyzing thousands of stocks before narrowing down to a select few demonstrates the importance of meticulous market research. New businesses can take this approach by conducting comprehensive market analysis, identifying key trends, and understanding customer preferences. This will enable them to make informed decisions and select the most promising opportunities for their portfolio.
The Power of Differentiation
Mohanraj's success with investments in companies like Dino Polska and Nintendo showcases the benefits of differentiated strategies. New businesses can apply this lesson by identifying unique niches or target markets that are underserved or untapped. By offering products or services that stand out from the competition, these businesses can attract a dedicated customer base and achieve notable growth.
Diversification and Adaptability
Through the International Fund's diversified portfolio, Mohanraj demonstrates the importance of spreading risk and being adaptable to changing market conditions. New businesses should aim to diversify their product offerings, customer base, and revenue streams to mitigate risks and withstand uncertainties. By staying agile and open to strategic shifts, businesses can navigate challenges and seize emerging opportunities.
Continuous Learning and Collaboration
Mohanraj's passion for learning and his reliance on a strong team highlights the importance of continuous improvement and collaboration. New businesses should foster a culture of learning, encouraging employees to stay updated on industry trends and engage in ongoing professional development. By fostering collaboration and knowledge-sharing within the organization, businesses can harness the collective intelligence and expertise of their team.
In conclusion, Krishna Mohanraj's success serves as a valuable guide for new businesses. By adopting a diligent research approach, focusing on differentiation, and prioritizing adaptability, businesses can position themselves for long-term growth and success in a competitive market. Emphasizing continuous learning and collaboration can further support innovation and maintain a competitive edge.
Article First Published at: https://www.cnbc.com/2023/07/07/global-stock-pro-outpaces-peers-with-differentiated-long-term-bets-.html.svg)
