Greenhaven Associates: A Long-Term Value Investor's Perspective

Greenhaven Associates, a New York-based hedge fund sponsor, has been a prominent figure in the investment community since its inception in 1988. Founded by Edgar Wachenheim, who still serves as its Chairman and CEO, the company has maintained a small-scale operation throughout its history, with a current total assets under management reaching into the billions. With a focus on long-term, value-oriented investments, Greenhaven Associates has achieved an impressive average annual return of approximately 19% between 1988 and 2017.

Greenhaven Associates' investment strategy is centered around the following key principles:

1. Long-term focus: The firm holds stocks for multiple years, allowing them to appreciate as expected. This long-term perspective helps the firm avoid the pitfalls of short-term market fluctuations and focus on the intrinsic value of companies.
2. Value-oriented approach: Greenhaven Associates seeks out undervalued companies with low probabilities of permanent loss. By investing in these companies, the firm aims to generate annual returns between 15% and 20%.
3. Highly concentrated portfolios: With only six employees, half of whom are investment professionals, Greenhaven Associates maintains a highly concentrated portfolio. Its top 10 holdings alone make up almost 90% of its total. This concentration enables the firm to focus its resources effectively and make significant investments in its chosen companies.
4. Limited use of leverage: Greenhaven Associates' investment strategy is relatively conservative, with no financial leverage used in its portfolio management. This approach helps mitigate risk and ensures that the firm's investments are not overly sensitive to market fluctuations.

Greenhaven Associates' top holdings include FedEx Corporation, Lowes Companies, Inc., Goldman Sachs Group, and JPMorgan Chase & Co., each making up over 10% of its total holdings. The firm's investment philosophy has contributed to its impressive historical performance and risk management. By focusing on downside risk, capital preservation, and highly concentrated portfolios, Greenhaven Associates has been able to generate impressive returns while maintaining a relatively conservative approach to investing.

In conclusion, Greenhaven Associates' long-term, value-oriented investment strategy has been a significant factor in its historical performance and risk management. The firm's focus on downside risk, capital preservation, and highly concentrated portfolios has enabled it to generate impressive returns while maintaining a relatively conservative approach to investing. As a long-term, long-only value investor, Greenhaven Associates continues to be a prominent figure in the investment community, with a strong track record and a commitment to its investment philosophy.