This page lists the portfolio holdings of Ronald H. Muhlenkamp.
Stock Holdings
Ronald H. Muhlenkamp - Muhlenkamp
Period: Q2 2010
Portfolio date: 30 Jun 2010
No. of stocks: 42
Portfolio value: $473,256,000
Sector % analysis
| Health Care | |
| Information Technology | |
| Financials | |
| Consumer Discretionary | |
| Services | |
| Consumer Staples | |
| Energy | |
| Telecommunications Services | |
| Industrials | |
| Consumer Goods | |
| Technology | |
| Industrial Goods |
Articles & Commentaries
05 Aug 2010 Muhlenkamp Funds - Adviser Conference
Well, there are several [events] that are somewhat at cross purposes. We’re seeing great companies selling at good prices. I think I end the quarterly newsletter [Muhlenkamp Memorandum #95] by saying, “If we thought this was a normal cyclical recession we’d be fully invested, but we’re not.” One of the things that occurred in ’08 was good companies got cheap, and then got a whole lot cheaper. Since that time, we’ve been asking ourselves: “Who might have to sell and how much?” We believe that the prices that were reached in late ’08, early ’09, were heavily driven by people who were forced to sell—particularly hedge funds that had to cut back on their leverage, and both hedge funds and mutual funds that had to meet redemptions.
If it were a normal cyclical recession, big and good companies should be selling higher than they are. We had a conversation here [at the office] where one of my analysts said, “Microsoft, at these levels, is a screaming buy.” And I agree with that. My question is: “How did it get to these levels in the first place?” My suspicion is somebody sold it for reasons other than investment assessments; e.g. how good the company is; its cash flows; what the price should be.
We know that pension funds in this country have been moving a certain amount of their allocation from stocks to bonds for about two years now, and that we should be getting near the end of that. We know that’s been going on, which, frankly, is one of the reasons that interest rates... We think U.S. Treasury rates are below where they should be. When that turns, I’m not quite sure. Along with that, if we have major European banks cutting back on their balance sheets, that, too, would have an effect similar to hedge funds and mutual funds selling a couple of years ago; i.e. if I wanted to sell something—and if I can’t get a bid on the stocks I want to sell—I’ll sell the stocks where I can get a bid. So, that’s giving us pause...
Well, there are several [events] that are somewhat at cross purposes. We’re seeing great companies selling at good prices. I think I end the quarterly newsletter [Muhlenkamp Memorandum #95] by saying, “If we thought this was a normal cyclical recession we’d be fully invested, but we’re not.” One of the things that occurred in ’08 was good companies got cheap, and then got a whole lot cheaper. Since that time, we’ve been asking ourselves: “Who might have to sell and how much?” We believe that the prices that were reached in late ’08, early ’09, were heavily driven by people who were forced to sell—particularly hedge funds that had to cut back on their leverage, and both hedge funds and mutual funds that had to meet redemptions.
If it were a normal cyclical recession, big and good companies should be selling higher than they are. We had a conversation here [at the office] where one of my analysts said, “Microsoft, at these levels, is a screaming buy.” And I agree with that. My question is: “How did it get to these levels in the first place?” My suspicion is somebody sold it for reasons other than investment assessments; e.g. how good the company is; its cash flows; what the price should be.
We know that pension funds in this country have been moving a certain amount of their allocation from stocks to bonds for about two years now, and that we should be getting near the end of that. We know that’s been going on, which, frankly, is one of the reasons that interest rates... We think U.S. Treasury rates are below where they should be. When that turns, I’m not quite sure. Along with that, if we have major European banks cutting back on their balance sheets, that, too, would have an effect similar to hedge funds and mutual funds selling a couple of years ago; i.e. if I wanted to sell something—and if I can’t get a bid on the stocks I want to sell—I’ll sell the stocks where I can get a bid. So, that’s giving us pause...
09 Jun 2010 The Frugal Consumer... Will It Last?
Presentation by Ron Muhlenkamp on recessions, financial markets, interest rates, stocks and bonds...
...As human beings, we all want to extrapolate the recent past into the present. As a result, a lot of money poured into bonds during the last year. If there’s a bubble out there today, it’s probably in the Treasury market. We think this is similar to “Planting corn in October, because it grew so well since April!” People want to extrapolate what has worked in the recent past, rather than taking into account today’s investment values. Folks, if interest rates go sideways or go up, bonds are not safe. In the 1970s, we talked about bonds as '"certificates of guaranteed confiscation!"...
...Today, we think [stock] prices are, on average, fair. But ignore the fact that they’re up a lot, because they’re up from a nonsense base. Don’t even think of it as a base. Prices were driven to nonsense levels because of the forced selling caused by the deleveraging amongst hedge funds and the redemptions that took place in both hedge funds and mutual funds...
...For most of the past 40 years, velocity [of money] has been fairly stable or gradually increasing. Let me be clear: The Fed does control the money supply. The velocity of money, however, is a wild card. Velocity is a function of all the turnover and leverage that goes on in the economy by a whole lot of operators — and no party controls it. Technically, the Fed did not lose control of the money supply over the past few years, but it lost control of the combination (MV). When the Fed was trying to squeeze the economy in ’04 and ’05 by raising rates, the velocity [turnover] of money kept growing and overwhelmed the Fed’s actions. In late 2008 and early 2009, as a result of all the deleveraging and the whole credit mess, velocity fell off a cliff...
Presentation by Ron Muhlenkamp on recessions, financial markets, interest rates, stocks and bonds...
...As human beings, we all want to extrapolate the recent past into the present. As a result, a lot of money poured into bonds during the last year. If there’s a bubble out there today, it’s probably in the Treasury market. We think this is similar to “Planting corn in October, because it grew so well since April!” People want to extrapolate what has worked in the recent past, rather than taking into account today’s investment values. Folks, if interest rates go sideways or go up, bonds are not safe. In the 1970s, we talked about bonds as '"certificates of guaranteed confiscation!"...
...Today, we think [stock] prices are, on average, fair. But ignore the fact that they’re up a lot, because they’re up from a nonsense base. Don’t even think of it as a base. Prices were driven to nonsense levels because of the forced selling caused by the deleveraging amongst hedge funds and the redemptions that took place in both hedge funds and mutual funds...
...For most of the past 40 years, velocity [of money] has been fairly stable or gradually increasing. Let me be clear: The Fed does control the money supply. The velocity of money, however, is a wild card. Velocity is a function of all the turnover and leverage that goes on in the economy by a whole lot of operators — and no party controls it. Technically, the Fed did not lose control of the money supply over the past few years, but it lost control of the combination (MV). When the Fed was trying to squeeze the economy in ’04 and ’05 by raising rates, the velocity [turnover] of money kept growing and overwhelmed the Fed’s actions. In late 2008 and early 2009, as a result of all the deleveraging and the whole credit mess, velocity fell off a cliff...
25 May 2010 Muhlenkamp & Co. - May 21, 2010 Commentary
...So, my headline remains: The panic we had in the world markets and in the U.S. markets in the fall of 2008 has been relieved — but it doesn’t mean we can't have another round. And gauging the size of the next round of potential forced selling is extremely difficult.
Because of such circumstances, we've added two new questions to our checklist:
1. Will some investors be forced to sell?
2. If so, how much?
Forced selling could once again lead to some (very) good companies being sold at (very) cheap prices. As a result, we have raised some cash, (currently about 20% of our portfolio), in order to position ourselves to take advantage of such opportunities. Remember: The best time to buy stocks is when the public is fearful.
...So, my headline remains: The panic we had in the world markets and in the U.S. markets in the fall of 2008 has been relieved — but it doesn’t mean we can't have another round. And gauging the size of the next round of potential forced selling is extremely difficult.
Because of such circumstances, we've added two new questions to our checklist:
1. Will some investors be forced to sell?
2. If so, how much?
Forced selling could once again lead to some (very) good companies being sold at (very) cheap prices. As a result, we have raised some cash, (currently about 20% of our portfolio), in order to position ourselves to take advantage of such opportunities. Remember: The best time to buy stocks is when the public is fearful.
22 Apr 2010 Video: Ron Muhlenkamp on CNBC
Ron Muhlenkamp of Muhlenkamp Fund likes Financials and Tech...
Ron Muhlenkamp of Muhlenkamp Fund likes Financials and Tech...
24 Feb 2010 Driving on the Road to Wealth
Ron Muhlenkamp of the Muhlenkamp Fund on the 'new normal,' current portfolio holdings, and performance relative to historical valuations...
Ron Muhlenkamp of the Muhlenkamp Fund on the 'new normal,' current portfolio holdings, and performance relative to historical valuations...
09 Feb 2010 Clean Opportunities - Ron Muhlenkamp
We're about to see a dramatic increase in the use of natural gas in transportation. Recent improvements in drilling technology and techniques have significantly increased the amount of gas available at current prices, extending our reserves to nearly 100 years at current usage rates. And current prices for natural gas are roughly half those of gasoline or diesel for equivalent energy...
We're about to see a dramatic increase in the use of natural gas in transportation. Recent improvements in drilling technology and techniques have significantly increased the amount of gas available at current prices, extending our reserves to nearly 100 years at current usage rates. And current prices for natural gas are roughly half those of gasoline or diesel for equivalent energy...
12 Dec 2009 Video: Ronald Muhlenkamp presentation
Excellent talk and Q/A session by Ron Muhlenkamp of Muhlenkamp Funds regarding the financial crisis, current state of the economy, possible future scenarios etc...
Excellent talk and Q/A session by Ron Muhlenkamp of Muhlenkamp Funds regarding the financial crisis, current state of the economy, possible future scenarios etc...
23 Nov 2009 Muhlenkamp Funds - Brief letter to investors
By the economist’s definition, the current recession is probably over. By the media’s implied definition (GDP is still well below its prior peak and unemployment is well above its prior trough), the current recession will last a while, as it always does. By the investor’s definition (a chance to buy good companies cheap), the current recession has been fulfilled. The 50% rebound in the stock market since March is a sizable move by any definition.
In most respects the credit markets are back to functioning rather well. Some of the money the federal government put into the banking system has been returned – with interest. Other programs will take a while to work out, but we knew that going in. The “Cash for Clunkers” program has ended, but some subsidies for housing remain. Inexplicably, some congressmen are back to pushing for subsidies to help more low-income people buy too much house.
Since the beginning of 2009, consumer spending has been basically flat. So now the question is to what extent consumer spending resumes growth or stays subdued. If spending resumes, then providers of discretionary goods should do well, as they did following the 2001 recession. If consumer spending stays subdued, (and consumer savings grow), then providers of financial services should do well, as they did following the 1990 recession.
Frankly, I think people should rebuild their savings. Savings are necessary to weather the normal swings of economic life and the unplanned emergencies which are part of that life. As a group of people, we’ve dissipated our savings habits over the last twenty years.
By the economist’s definition, the current recession is probably over. By the media’s implied definition (GDP is still well below its prior peak and unemployment is well above its prior trough), the current recession will last a while, as it always does. By the investor’s definition (a chance to buy good companies cheap), the current recession has been fulfilled. The 50% rebound in the stock market since March is a sizable move by any definition.
In most respects the credit markets are back to functioning rather well. Some of the money the federal government put into the banking system has been returned – with interest. Other programs will take a while to work out, but we knew that going in. The “Cash for Clunkers” program has ended, but some subsidies for housing remain. Inexplicably, some congressmen are back to pushing for subsidies to help more low-income people buy too much house.
Since the beginning of 2009, consumer spending has been basically flat. So now the question is to what extent consumer spending resumes growth or stays subdued. If spending resumes, then providers of discretionary goods should do well, as they did following the 2001 recession. If consumer spending stays subdued, (and consumer savings grow), then providers of financial services should do well, as they did following the 1990 recession.
Frankly, I think people should rebuild their savings. Savings are necessary to weather the normal swings of economic life and the unplanned emergencies which are part of that life. As a group of people, we’ve dissipated our savings habits over the last twenty years.
27 Aug 2009 Video: Ron Muhlenkamp on CNBC
Legendary value investor Ron Muhlenkamp shares his stock picks given the current market valuations...
Legendary value investor Ron Muhlenkamp shares his stock picks given the current market valuations...
11 Jun 2009 The Signposts of Change: Economics, Rules, Markets
Excellent Video/slides presentation by Ron Muhlenkamp of Muhlenkamp & Company Investment Management discussing the current economic downturn and the markets (Requires Windows Media Player).
Excellent Video/slides presentation by Ron Muhlenkamp of Muhlenkamp & Company Investment Management discussing the current economic downturn and the markets (Requires Windows Media Player).
16 Apr 2009 Ron Muhlenkamp's review of events that impacted the markets during Q1 2009
We believe that, long term, stock and bond prices reflect economic values. But for shorter periods of time, prices are set by market supply and demand, much like any other auction...
We believe that deleveraging by hedge funds and redemptions at both hedge funds and open-end mutual funds were at the center of the forced selling...
While forced selling was taking place, there was no forced buying. There may have been as much as $1 trillion of forced selling in ’08, but there was not enough buying to offset it. For those who did buy in ‘08, further price declines made it painful, so buying was quickly discouraged. Further, any buying by banks and insurance companies was discouraged by “mark-to-market” accounting...
We find it interesting that, as of mid-March ’09, we’re seeing forced buying. The various programs coming out of the federal government are beginning to spend money by buying mortgage-backed securities and Treasury bonds. The latest initiative, TALF, states that it will buy securitized non-mortgage-backed type debt, including credit card debt and auto loans.
In summary, I think that the combination of forced selling ending, and forced buying beginning, along with the alleviation of mark-to-market accounting changed the game in terms of short-term supply and demand...
We believe that, long term, stock and bond prices reflect economic values. But for shorter periods of time, prices are set by market supply and demand, much like any other auction...
We believe that deleveraging by hedge funds and redemptions at both hedge funds and open-end mutual funds were at the center of the forced selling...
While forced selling was taking place, there was no forced buying. There may have been as much as $1 trillion of forced selling in ’08, but there was not enough buying to offset it. For those who did buy in ‘08, further price declines made it painful, so buying was quickly discouraged. Further, any buying by banks and insurance companies was discouraged by “mark-to-market” accounting...
We find it interesting that, as of mid-March ’09, we’re seeing forced buying. The various programs coming out of the federal government are beginning to spend money by buying mortgage-backed securities and Treasury bonds. The latest initiative, TALF, states that it will buy securitized non-mortgage-backed type debt, including credit card debt and auto loans.
In summary, I think that the combination of forced selling ending, and forced buying beginning, along with the alleviation of mark-to-market accounting changed the game in terms of short-term supply and demand...