Summary List PlacementFund manager John Rogers predicted an epic comeback for value stocks, explained why Barack Obama would excel at investing, and reflected on beating Michael Jordan at basketball in an Institutional Investor profile published this week.
The Ariel investments CEO disclosed that his firm’s flagship mutual fund returned 78% in the 12 months to May 31. Rogers downplayed that outperformance as just the beginning of a value renaissance. He expects overpriced growth stocks to revert to historical valuations, and value stocks to become more appealing, once the Federal Reserve hikes interest rates to tamp down on rising inflation.
“We think this recovery is just a start,” Rogers said. “The wind is at our backs for the first time in a long time.”
Rogers told Institutional Investor that he met Obama through the brother of the former president’s wife, Michelle, and provided political and fundraising advice to the budding politician before he won the presidency in 2008.
Obama’s vision, competitive streak, and relentless work ethic would make him a stellar investor, Rogers said. The Ariel chief suggested Obama would hunt for growth stocks at a fair price and “wouldn’t chase the hottest stock.”
Rogers, who captained the basketball team at Princeton University, also recalled his victory over Jordan in a one-on-one game at the superstar’s fantasy camp in 2003. He ranks the win among his greatest achievements, but acknowledges he got lucky with the “first to three baskets” format.
“If it was to 10, he’d win, and if we played another 100 times, he’d probably win them all,” Rogers said.
The famously competitive Jordan wanted a rematch, but Rogers politely declined. “He did tell people he would get me back in the gym to show me what he did in the NBA, but I wouldn’t go back,” the investor said.
The Ariel boss drew a parallel between one of his investing heroes and the best of the NBA.
“People can argue whether Michael Jordan, LeBron James, or Kareem Abdul-Jabbar is the best basketball player of all time,” he said. “But Warren Buffett stands alone as the greatest investor of all time.”
Rogers continues to apply Buffett’s approach at Ariel. The fund seeks out industry-leading, high-quality companies with strong growth potential and deep moats, he said.
“Moats are the most important element,” Rogers added, referring to competitive advantages such as brands or proprietary technology. “We learned that from Warren.”Join the conversation about this story » NOW WATCH: How racism contributed to marijuana prohibition in the US
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