We are delighted to share with you our audio program on Jean-Marie Eveillard, who ran the SoGen International Fund, later First Eagle Global, from 1979 and handed it to Matt McLennan in 2008, part of the Great Investors podcast by Latticework. Each program in the series is an hour-long narrated profile of one investor, drawn from MOI Global’s archive of interviews and conference sessions and from the investor’s published work. We make these programs so that members can learn how a great investor thinks and works, through the decisions he made and what he said about them at the time. Your feedback on what was useful, and on which investors to cover next, shapes what we produce. We start with who he is:
Jean-Marie Eveillard finished at HEC Paris in 1962 and went to work for Société Générale that fall. In the summer of 1968, bicycling in Central Park with two French students, he heard the name Benjamin Graham and bought The Intelligent Investor. He spent ten years trying to convince the bank to let him run money on Graham’s ideas. Early in 1979 it let him, with the SoGen International Fund, then $15 million, and for seven years he ran it alone. He handed the fund to Matt McLennan in 2008. First Eagle announced his retirement as senior adviser on July 1, 2020.
Value investing, he says, makes sense and works over time, and the reason so few practice it is almost entirely psychological. Most professional investors think six to twelve months ahead. A value investor thinks five years or more and accepts in advance that now and then he will lag. At an MOI event in 2015, asked what to look for in a young fund manager, he named the willingness to suffer. His example was the late 1990s: “I was not losing money, but I was making much less money than more aggressive fund managers. After one year, my shareholders were disappointed. After two years, they were really upset. After three years, they were mad at me. After three years, they were gone, basically.”
Graham abroad meant small stocks in continental Europe in the 1980s, where the fund was among the first to invest in a major way. A Paris money manager told him a small French stock would never go up if the French did not buy it. It would go up, he said, if it deserved to. Gold as insurance is how his January 2004 letter put it, and the letter counted the cost: the premium was much more expensive with gold at about $400 an ounce than near $250. The patience to look wrong is Tokyo. He sold his last Japanese stock in mid-1988, eighteen months and 30 percent too soon, and the market peaked at the end of 1989.
The program opens in New York in 2012, with the Tokyo market of the late 1980s. It goes back to Central Park in 1968 and to the Berkshire Hathaway letters that illuminated him again in 1978. It follows the fund into continental Europe and to a dinner with Walter Schloss before Enron. It reads his letters through the late 1990s and the December 2002 letter on the two meanings of risk. It ends with the Austrian school, gold, his analysts, Japan and India, his farewell letter, and Hayek’s Pretense of Knowledge.
MOI Global, the community behind the Best Ideas conference and the Latticework summit, recorded the New York conversation in 2012 and had him back at its summits. At the Asian Investing Summit in April 2014 he said the bank had sent him back to New York late in 1978, probably because it had tired of his complaining. At the European Investing Summit in October 2015 he called continental Europe more inefficient than the British market, and more attractive for that reason. At the Asian Investing Summit in 2017 he took the other side from Charlie Munger on China against India.
The complete program runs sixty-four minutes.
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Transcript
The transcript is available for download to members only.
