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They say the Berkshire Hathaway (NYSE: BRK-B ) annual meeting is "Woodstock for Capitalists." I'd say that's a fair comparison save for a few small differences: Charlie Munger and the lack of hallucinogenic drugs being the main ones.
But what about "the Super Bowl of Value Investing"? That's what the folks at CNBC have dubbed the Value Investing Congress, an annual event that pulls together value investing thought leaders from the world over. But while I'm expecting more sport coats and power jeans than pads and pom-poms, count me among those looking forward to this year's spectacle.
Toby Shute and I will be covering the Value Investing Congress this week via articles here on Fool.com, real-time news on Twitter via @TMFInsideValue, and serving up heaping helpings of takeaways for our premium members at Motley Fool Inside Value. We're going the extra mile this year so Fools don't have to. And with good reason: This year's speaking docket is value-star-studded with the likes of Pershing Square's Bill Ackman, Greenlight Capital's (Nasdaq: GLRE ) David Einhorn, Mohnish Pabrai of Pabrai Funds, and Centaur Capital Partners' Zeke Ashton. And, of course, conference co-founder and T2 Partners' Whitney Tilson.
But what to expect of this year's gathering of the value minds? As with any value investing revival, there'll be plenty of Benjamin Graham idolatry and Warren Buffett quotes. But there's a great deal more on the line than that. Namely, stock ideas.
With that, here are my five predictions for the stories and investing themes of this year's Value Investing Conference:
- A push on blue chips: The buzz in the value community right now is that high-quality dividend payers Wal-Mart (NYSE: WMT ) , Microsoft (Nasdaq: MSFT ) , and Johnson & Johnson (NYSE: JNJ ) , among others, are on sale. Not that seeking out wide-moat businesses trading for no-moat prices should ever be out of style, but I expect more than a couple of speakers to argue the case for great businesses with strong yields and attractive relative valuations.
- Bonds are a bubble: Speaking of yields, I'd be floored if many speakers don't wax on the bond bubble we're all basking in the warmth of. Junk bonds are hot, Microsoft and IBM are issuing three-year notes yielding about 1%, and the Fed has all but promised to upholster Americans' living room sets with Benjamins. Even the Mexican government is taking advantage, recently selling 100-year bonds with a forehead-slappingly low yield of 6.1%. Sure, deflation isn't outside the realm of reason, but if it walks like a bubble and talks like a bubble...
- Inflation versus deflation: The cases for inflation (think huge fiscal deficits and aggressive Fed policy) and deflation (think a weak consumer and a still-floundering housing market) will each be made in full force. I expect to hear convincing arguments and investing plays for both sides, though it'll take quite a bit to nudge me from my bent toward an outlook of near-term deflation and long-term inflation.
- A case for gold: I personally find the idea of investing in a commodity whose price is disconnected from its cost of production a little surreal, but there are plenty of value investors who covet gold these days. Among their ranks include the savvy Einhorn, and I've little doubt at least a couple inflation-wary speakers will make the case that gold glitters.
- An activist case (or two): The Value Investing Congress is as perfect a place as any for an activist investor to make his case, and I wouldn't be shocked to hear a few such pitches this week. Likely candidates include two businesses that Ackman recently made two big pushes into: J.C. Penney (NYSE: JCP ) and Fortune Brands (NYSE: FO ) . Fortune, with its mish-mash of quizzically paired brands ranging from Jim Beam to Titleist, seems ripe for an activists' case. My inner (and now former) investment banker would love to hear Ackman walk the crowd through his vision for how Fortune's management could unlock shareholder value.
Want to join us?
We know that you probably can't swing attending this year's Value Investing Congress – that's why we're going for you. Follow along with our coverage here on Fool.com and in real-time on Twitter via @TMFInsideValue. And for you Inside Value members, stay tuned for next week's full-featured VIC special report!