A $33 Billion Value Manager Who Has Actually Outperformed | Scott McBride

In this episode of Excess Returns, Justin and Jack sit down with Scott McBride, CEO and portfolio manager at Hotchkis and Wiley, to explore the approach that has allowed them to succeed during a time when many other value investors have failed. McBride, with 24 years at the firm, shares insights into how their team has achieved impressive results by being willing to think differently from consensus. Key topics discussed: How market sentiment and emotion create opportunities for long-term investors The importance of having the right team culture and being comfortable with contrarian positions Their approach to valuing companies beyond traditional metrics like P/E ratios Why catalysts aren't necessary for investment success if you get valuation and governance right Their perspective on international markets, particularly opportunities in Europe and the UK Thoughts on AI's impact on businesses and investment analysis The growing influence of passive investing and how it creates opportunities McBride explains why having fewer analysts covering certain stocks can create opportunities, and why focusing on business quality, strong balance sheets, and good governance is crucial for long-term success. He also shares valuable insights about maintaining flexibility in investment approach rather than being dogmatic about any single strategy. Whether you're an experienced investor or just starting out, this conversation offers practical wisdom about what works in value investing over the long term. 0:00 Introduction to Scott McBride 0:34 What makes their team successful 2:17 How market sentiment creates opportunities 3:22 The importance of long-term thinking vs short-term focus 4:49 Lessons learned from bear markets 7:57 Is the market crazier now than before? 9:48 Why fewer analysts at meetings creates opportunity 10:44 How they define value investing 13:53 Their approach to investing in tech and intangible-heavy companies 15:41 Views on portfolio concentration 20:22 Approach to valuing growth companies 22:58 Thoughts on AI and its impact 26:54 Their process for finding new investment ideas 28:19 Team approach to portfolio management 30:54 Impact of passive investing on markets 34:33 International vs US market opportunities 41:17 The importance of governance in international investing 45:49 Why you don't need a catalyst to make money 46:41 The value of being flexible as an investor #ValueInvesting #InvestingStrategy #MarketAnalysis #FinancialMarkets #StockMarket #InvestingTips