05 Aug 2010 Yacktman - Q2 2010 Commentary ( Portfolio )
We like businesses that sell products in well-established, slowly changing markets like beverage, household products, personal care, and food. These “consumer staple” products typically sell at low price points and are consumed and repurchased frequently.

Category leaders like Coca-Cola in soft drinks or Tide in laundry detergents may continue their dominance for generations, making it easier to predict the future prospects of these businesses.

The media companies we own are largely subscription businesses, which we also like. Comcast gets paid predictable monthly fees from its customers for providing cable television, internet, and telephone services. News Corp and Viacom receive recurring monthly fees for the cable content they provide to pay television providers. Even in a challenged economy, pay television is one of the last items to be cut by households.

Identifying great companies is not especially difficult. Appraising the future prospects of a business and paying an appropriate price are far more critical to managing risk and generating attractive returns than just picking leaders.

Economic issues may cause short term pressure on the earnings of some of the companies in our funds, though we think we are being sufficiently compensated for that possibility by current valuation levels. We are optimistic and patient, and believe that owning securities at attractive prices and adhering to high quality standards will allow us to the endure bumps in the road that may lie ahead.