The speed to gain information is critical in the investor world where minutes can equal thousands of dollars. Few money managers have been around as long as Bill Nasgovitz, longtime chairman and portfolio manager for Heartland Value Fund, who remembers what investing was like before the internet.
“Just to get an annual report you had to call the company or write for it and they’d send it out,” Nasgovitz said.
Nasgovitz was the keynote speaker at the May 13 Secure Futures Investment Conference that brought about 550 members of the investment community to the Baird Center.
Nasgovitz discussed recent market trends, tariffs, cryptocurrency, and his best (and worst) deals.
Here’s some of what he had to say:
How to invest during tariffs and uncertainty: be calm, stay focused
When President Donald Trump announced dozens of tariffs were being placed on countries, and then weeks later reduced those tariffs, it created whiplash in the stock market.
“It certainly made the headlines and scared the heck out of people and forced stock prices down,” Nasgovitz said. “At Heartland we just sat on our hands.”
Investors need to be calm and remind themselves about the original motivations of putting money behind a company, he said.
“To be an successful investor you have to sit back and understand what you own,” Nasgovitz said. “You do own a piece of a company, not just a piece of paper. Even if its 100 shares, you own a slice of that pie. Why did you buy it? What did they do? Did their products disappear because he put on tariffs?”
What should investors do about ‘meme stocks’ and crypto?
In 2020, GameStop shares rocketed when online investors bought shares to combat a short position against the company. For those who got in early, there was real money made with that trade.
Other companies like Milwaukee-area headphone maker Koss Corp. were caught up in the trading.
It was a moment that put the market and investors like Nasgovitz on notice.
“A local company went from not earning any money to $5 a share to $50 a share,” Nasgovitz said. “The insiders cashed in. They sold stock… so it’s really crazy. Again it comes down to the value of the company.”
Cryptocurrency is another area that has gotten the attention of investors. Last year the State of Wisconsin Investment Board put $187 million into crypto funds managed by BlackRock.
Nasgovitz sounded skeptical of the staying power of some crypto coins.
“Forget Bitcoin, which might be with us for a very, very long time,” Nasgovitz said adding other coins like Dogecoin might not be worth long-term investments.
“They have unlimited coins, they’ll issue as many as you want for 30 cents or whatever the price is per coin,” Nasgovitz said. “But people are still speculating with their hard earned money in this marketplace. It’s hard to imagine. They have no idea what they’re doing, in my view.”
Nasgovitz says Midwest Express airline was a solid investment
Milwaukee-based Midwest Express was small and its in-flight chocolate chip cookies were worth the price of a ticket.
“Great airline. I wish it was still around,” Nasgovitz said adding Heartland bought into the company twice.
The first time the firm got a call, it bought 550,000 shares at 99 cents per share.
“Midwest Express, a number of years later, was bought out at about $15 per share,” Nasgovitz said. “So that one worked out really well.”
Saying it “worked out really well,” might be an understatement as the initial $544,000 investment turned into $8.25 million.
His worst deal: an investment in an (unnamed) ATM company
Nasgovitz isn’t afraid to say:
“We’ve had a number of worst investments.”
While not getting into specifics, Nasgovitz said he remembered investing in a ATM company that didn’t work out.
“We all make mistakes, things happen,” Nasgovitz said. “The key is to recognize it early and to move on, especially if your balance sheet is impaired or becomes impaired.”
