Neil Hennessy, president and portfolio manager of Hennessy funds, takes a client centered approach to the mutual fund business.
"All of our employees, including the executives, answer the phone and talk to shareholders", Hennessy tells the MFWire
At Hennessy, benchmarks are obsolete, the real measure of performance is whether or not they are making money for their shareholders, period.
In that effort Hennessy funds has been very successful, since the company's inception in 1996, there has only been one down year (2002). Even then the funds were down only about a quarter of what the actual market was down.
Hennessy's approach to investment strategy is simple, "we follow a disciplined, non-emotion approach to investing," he says, "volatility in the marker is due to emotion".
Examples of this, says Hennessy, is when the market experiences a significant downturn one day due to inflation fears and then a few days later hits a record high. The inflation has obviously not gone away in the span of a few days, decision were based on the emotion of fear.
Hennessy Funds also follow strict formulas that recreate the passive strategy of an index but are not pegged to any index in particular.
He also believes that the people in the company make the difference, "always hire people smarter than yourself," is his motto.
As far as the future of the market, Hennessy breaks from the Wall Street crowd who are currently predicting it can go no higher and must soon come back to earth.
"In the third year of any president's term the market always ends the year up", Hennessy explains. History
agrees with his point.
The formula for growth at Hennessy funds hinges on a price to sale ratio of 1.50 The current price to sale ratio of the Dow is 1.27. Hennessy also uses this ratio to point out that in 2000, the ratio was at 1.86 meaning the Dow still has some room to grow.
Hennessy funds manages 6 different funds and has $2 billion under management. The business was built acquisition of assets and funds from other businesses from September 2003 to July 2005.
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