DAVID NIERENBERG

In this episode, Dan Ferris sits down with David Nierenberg and Damon Benedict to give listeners a detailed analysis on the stock they just recommended to those attending last week’s Value Investing Congress.  It’s a name you know, but one you most likely have never considered as an equity investment.  Plus, they talk about Dan’s visit to Berkshire Hathaway’s Annual Shareholders Meeting, Herbalife, solar company handouts, food stamp recruiters (we’re not kidding), and Obama’s usual double-talk.  Dan also discusses royalty trusts and addresses the question of whether our recommendations have an influence on stock prices.   Interviewed by Dan Ferris / S & A Radio

David Nierenberg is the founder of The D3 Family Funds and its largest investor.  His liquid net worth, retirement funds, and children’s funds are invested in D3.  He is a summa cum laude graduate of Yale College and a graduate of Yale Law School.  He brings several complementary disciplines: lawyer, strategic management consultant, corporate director, asset allocator, and venture capitalist.

David worked seven years at Bain & Company, a large consulting firm, where he was a partner. He has been a full time investor for 27 years, 10 as a venture capitalist.  Currently, he serves on the Washington State Investment Board, which oversees public employee retirement funds; chairs the board investment committee for Whitman College; and serves on the boards of Electro Scientific Industries (ESIO) and RadiSys Corporation (RSYS), which are D3 portfolio companies. 

From 2008 – 2012 he chaired the advisory board of the Millstein Center for Corporate Governance and Performance at the Yale School of Management.  The D3 Family Funds are long term, constructively engaged, private equity-like investors in a concentrated portfolio of public, relatively illiquid, undervalued, micro-cap growth companies, when their share prices are depressed.  Though most of the companies are domiciled in the United States and Canada, an increasing portion of their business is conducted in emerging markets, where growth is highest.  

The D3 Family Funds focuses on micro-cap stocks with a market capitalization below $1.5 billion, giving the firm better access to upper-level management, though the firm prefers “friendly persuasion” in its discussions with management over a more aggressive “activist” approach.  Additionally, micro-cap stocks are less liquid and often neglected by analysts
and the financial press, allowing the fund to make timely trades on mispriced stocks.
Damon Benedict

Damon Benedict, is a senior analyst, at D3 Family Funds.  After working as
a securities analyst for Fidelity Investments for three years.  Damon is a 2006
graduate of Yale College.  He monitors portfolio companies for D3 and
evaluates prospective investment opportunities.  Damon is a CFA charterholder.
Dan Ferris

Dan Ferris writes Extreme Value, a monthly investment advisory that focuses
primarily on great businesses trading at steep discounts.  Dan's strategy of safe
and cheap stocks has earned him one of the most impressive track records in
the industry.  Dan also writes The 12% Letter, a high-yield newsletter that
promises big returns.