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| Tom Pence, Wells Capital Management |
On Monday, November 9, 2015, nearly 200 students attended a presentation by Tom Pence and Tom Askey in Marquette University’s Alumni Memorial Union. Tom Pence, CFA, is the Managing Director and Senior Portfolio Manager of Wells Fargo’s Fundamental Growth funds in Indianapolis. Tom Askey, CFA, Research Analyst for Mr. Pence’s team, also spoke to the students. The title of their presentation was “Generating Growth Alpha in a Slow Growth World.”
In addition to
talking about the Wells Fargo Asset Management Analyst program, Mr. Pence
addressed some timely investment topics, including: Short vs. Long-Term Focused
Investing; Investing for Growth in a Slow Growth World; and Building a
Portfolio that will last through the cycle.
The content of the
talk touched on the importance of analysts developing the discipline to develop
long-term thinking and to not get overly focused on a firm’s quarterly
earnings. Mr. Pence emphasized that the most reliable alpha requires a
commitment to longer-term thinking and encouraged students to find situations
where there is a “change dynamic” taking place. He said for the students to “be
early to find and identify change.”
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| Marquette Finance Students at the Pence Presentation |
Mr. Pence
identified an interesting investment decision marking model that he noted was
based on the work of Herbert Simon in his publication The New Science of Management Decision. Examples of firms that are
on different parts of the wave of change brought the point home to the students
– including discussions about Apple, SEIC, WOOF, and BFAM – companies that are
at interesting points on the ‘change wave.’
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| Tom Askey, Wells Capital Management |
Noting that
identifying growth in the post-2008 financial crisis world is more challenging,
Mr. Pence told the students to utilize Porter’s 5 Forces and to screen for
companies with pricing power, wide moats and strong cash flow. He also
discussed factor analysis and observed that over the past several years growth
has not been rewarded --- emphasizing that balanced portfolio construction is
important to prosper across the business cycle.
Dr. David Krause,
AIM program director, and Mr. Pence summarized the talk and were available to
answer questions afterwards. The presentation offered the finance majors an
opportunity to hear from one of the nationally recognized thought leaders in
the world of equity investing. Krause added, “It was a pleasure to host Tom
Pence and to continue to expand our relationship with Wells Capital. Ryan Woo,
a member of the AIM Class of 2016, will be joining the Pence team full-time next
summer and we are hopeful to add a summer intern to the Indianapolis-based
team. It was wonderful to see Tom and his research assistant, Tom Askey, on
campus.”
