Donald Yacktman Quotes
110 Donald Yacktman Quotes
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[In August 1995.] I like to own stocks a long time.
Donald Yacktman
[In August 1995.] A manager has five options for the cash that a business generates. First, you can reinvest it in the business – research and development, marketing and so forth. After that, the good, profitable businesses usually have four options: One is to make acquisitions, which are tricky – like trading baseball players. Another is to buy back stock, and I like to see a company willing to do this, particularly on price weakness. Or you can pay down debt – which most very profitable companies don’t have much of anyway – or increase the dividend, which I’m not especially enamored of because it’s double taxation for a tax-paying shareholder.
Donald Yacktman
[In August 1995.] I want a stock that sells for much less than its private market value, which is what a rational person would pay to buy the whole company.
Donald Yacktman
[In August 1995.] The typical large company’s stock will vary by 50% from its low to its high each year.
Donald Yacktman
[In August 1995 on what the hard part is in investing.] The big ingredient that’s necessary is patience. A lot of people in our business are driven by short-term results. They may realize what they should by doing, but they use what is affectionately referred to as the momentum strategy.
Donald Yacktman
[In August 1995.] Value investing requires not only knowledge about the company but patience as well. You must have a high degree of confidence in the businesses you invest. Then when they come down in price, you can build a large position. For example, when Nike sank to $50 per share, you couldn’t give it away. At $76 today, everybody loves it.
Donald Yacktman
[In August 1995.] Slowly you develop your own comfort index in individual businesses that you’d love to own when the price is right. And when they reach those prices, you nail them down. The advantage to this is that even if you’re wrong about these businesses, you can almost always at least break even.
Donald Yacktman
[In August 1995.] There’s very low risk in owning large companies. It’s hard to kill a company that is making profits of more than $100 million per year.
Donald Yacktman
[In August 1995.] What I pay most attention to is a stock’s discount to the private market value. If we can buy a stock for 50% of what it’s worth, that’s more relevant than whether the economy is going up or down by 1% or the stock market is going up or down.
Donald Yacktman
[In August 1995.] If you start with the macro, top-down approach, there are so many decisions to make before you get down to the merits of specific stocks that it dilutes the whole process.
Donald Yacktman
[In August 1995.] There’s a narrow difference between being stubborn and being determined.
Donald Yacktman
[In August 1995.] I’ve always tried to focus and improve what I do.
Donald Yacktman
[In August 1995.] When you start with all cash and buy things that are out of favor, they don’t suddenly go into favor, especially in a rising market…
Donald Yacktman
[In August 1995.] The race is not over. After all, this is a marathon, not a sprint.
Donald Yacktman
[In November 1995 on RJR Nabisco shares keeping on falling even as Nabisco’s earnings rise.] It’s just like a beach ball being held underwater.
Donald Yacktman
[In March 1996.] Technology stocks are like Roman candles. They go up like rockets and flare out. Very few have withstood the test of time.
Donald Yacktman
[In March 1997.] The key is to find great businesses at good prices. We won’t touch mediocre businesses.
Donald Yacktman
[In December 1998.] Buy 20 or so mostly large growth stocks when they are out of favor on Wall Street, then hold on patiently until their prices rise.
Donald Yacktman
[In January 2000.] Just because we're down doesn't mean we're out. I believe that we are well positioned for things to turn around for us.
Donald Yacktman
[In January 2000.] We just look bad because we haven't participated in the market's technology-driven rally
Donald Yacktman
[In January 2000.] We're going to look very bad at times because we're focused, but we're also going to look very good at times. I believe that time is coming.
Donald Yacktman
[In March 2000 on ‘Fruit of the Loom’.] I look back and say I should have never done it. It was a big brand name, and it’s hard to believe a company with this kind of market share could get killed like this.
Donald Yacktman
[In July 2000.] We'll have other periods where we will look like rocket scientists, I'm sure. But, hey, right now we look like dummies.
Donald Yacktman
[In May 2001.] Five new investments in half a year. For me, that’s a lot.
Donald Yacktman
[In July 2002.] We like good businesses.
Donald Yacktman
[In July 2002 on having bought into Tyco International Ltd.] The market treated the company as if it were an Enron. We felt the problem was more with the managers than with the businesses.
Donald Yacktman
[In May 2003.] A good business has one or more of the following characteristics: 1) Earns a high return on assets; 2) Has a high market share; 3) Has relatively low capital requirements; and 4) Has a unique franchise.
Donald Yacktman
[In May 2003.] Good businesses have managers who know how to use money well. That means being ‘good capital allocators’ and using cash to: 1) Put back into the existing business to improve and grow the ‘crown jewels’; 2) Make acquisitions that fit with the overall business without overpaying; 3) Buy back shares; 4) Pay down debt, if the firm is over-leveraged or to reduce debt and improve its credit position; and 5) Pay dividends.
Donald Yacktman
[In August 2004.] What happened in ’99 is that speculators made a killing, and we got hurt holding Altria, the old Philip Morris.
Donald Yacktman
[In August 2004.] I look for good businesses run by people who are oriented toward shareholders and whose stock can be bought relatively cheaply.
Donald Yacktman
[In August 2004 on not overpaying for a business.] A low price hides a lot of sins.
Donald Yacktman
[In August 2004.] If you do a good job reinvesting profits, the business will grow and you’ll get more cash earnings in the end.
Donald Yacktman
[In June 2009 on his investment strategy not changing much.] It hasn't changed dramatically; it's just that we have been able to refine it more. I think our batting average has improved and that comes from our number crunching and refining the process.
Donald Yacktman
[In May 2010.] The danger of talking to [company] managers is that they tell you what you want to hear, not necessarily what you want to know
Donald Yacktman
[In May 2010.] When we buy something, we try to look at it as if we were buying a bond.
Donald Yacktman
[In May 2010 on crashes.] When you have a disruptive period, think of it as a fruit tree that is shaking. Some of the fruit will drop to the ground. You can examine the fruit and see which ones you want.
Donald Yacktman
[In March 2011.] There are three things that we've stated as goals. No. 1 is protecting our client's money. We make an investment with the intention of making money. No. 2: Make an adequate return, a double-digit return, while holding on for five to 10 years. And then the third thing is, over a cycle, beating the S&P 500 -not necessarily year by year, but over a cycle.
Donald Yacktman
[In March 2011.] It does require patience. It does require a long-term focus.
Donald Yacktman
[In March 2011.] This business boils down to what you buy and what you pay for it. The market level is incidental to us.
Donald Yacktman
[In March 2011.] Most technology I'm just leery of, because it changes so fast - and it is hard to predict the future.
Donald Yacktman
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