InsightsOwn Companies That Operate as Though They Were Private Enterprises

There are advantages and disadvantages to owning both private and public companies. We believe that the panacea for investors is to own public companies that operate as though they were private enterprises. Private companies enjoy the advantage of focusing on long-term rather than quarterly results and are free from the distraction of daily stock quotes, the diversion of a significant amount of management time dealing with analysts and investors and the misalignment of interests between long-term shareholders and managers who typically do not own significant equity stakes in their companies.

At BloombergSen, we seek to invest in public companies that behave as if they were private enterprises, focusing on the long term and managing their companies for the creation of long-term value. As long-term investors, we benefit from companies being publicly traded in that we can take advantage of disparities created by the emotional trading and short time horizons of our fellow market participants to invest in high-quality, well-run businesses trading at large discounts to their intrinsic value.

Moreover, many of our largest investments have a few shareholders with significant equity stakes, which allows their proven management teams to manage their companies for the long haul. We believe that we have, in large part, found the public/private panacea. Our holdings are public companies that behave as if they were private. Over time, their long-term investment horizons and minimizing of distractions should result in significant value creation.