John Rogers, Ariel Investments chairman, CEO & CIO, shares his top investment ideas, with Bill Miller, Legg Mason Opportunity Trust Fund. John Rogers was on CNBC this past Friday. Rogers favorite stocks include, CBS, KKR and Gannett. The full video (along with computer generated transcript) is embedded below:
but i racial exuberance is the last term i would use. new investments. our next guest may have a stock or two. john rogers, chairman and cio of errol investment. he joins us now. good morning to you. good morning. before we even go anywhere on this, you saw what alan greenspan had to say. mr. miller is very bullish. is there anything you worry about at all right now? there’s always things to worryabout. but the things, if there was some kind of extraordinary catastrophe in the middle east that would worry me. unexpected terrorist attack. those types of really dramatic gut-wrenching things. there’s nothing else considering the next fed minutes, what the sequester is going to do. there’s nothing else we should worry about. i like how you said there’s always something to worry about. those aren’t game changeing. they will come and go and we will be back to normal. let’s talk through some of the things you do like. this is nbc universal. we are owned by comcast. and you happen to love the stock cbsp. he is an extraordinary ceo. he’s all about the content. a great job of getting things back o track after the tough time during the financial crisis. the stock has had an extraordinary run. let’s talk about that. if you look at that chart you say that’s gone on a run. so many assets. and i think you could see stock 20% higher. they are doing things to take advantage of assets they really don’t need if they are selling their billboard business. and they have other assets to take advantage of. another company you like is ginnett which is surprising. warren buffett likes newspapers too. thrilled to see in the annual report that warren is loving newspapers again. we’re a big believer. extraordinary markets. a lot of value there. a lot of strategic assets that can be monetized. private equity was one of the most unpopular when it first came out of the gate. what’s the deal? we think as more and more endowments and pension funds are having morality activities when they make investment choice these are two of the best names in the industry. we are able to take advantage in september 2011 to buy them at extremely low prices. do you have any of these things in your portfolio? we do. we like them as well. all of them? is there anything you disagree about? john had a great run with cbs and ginnett. i like stuff that’s a little more beaten up and cheaper than that. one is groupon. i’m more attracted to the stuff that has warts on it and hair. you like oupon? a lot. why? before or after andrew. he’s a little quirky but andrew is a smart guy. great job building the business. maybe it is a little too complex for a guy 31, 32 years old. the interim chairman is full on board there. probably at least to the of the year. 1.2 billion in cash. no doubt. normal addressable market. i think their data analytics are very good. folks we knew at amazon for who are there. and so the opportunity at groupon is tremendous. i think rates will be going up again this quarter. i think expectations are low. the stock is very cheap. i didn’t do it on the ipo. but you didn’t do it after andrew mason left either. cost is around $5. i mean this with respect but that’s an odd stock for you. when i think of bill miller i don’t think of groupon. the world changes. goer of jc penney. i’m agnostic. the renovated stores are apparently did. but they’re trying to change that — i know eddie lampert pretty well. changing of culture at a business is very difficult. and i think jc penney is trying to change the culture and customer base. i wish him well but i’m not there. i know you get to catch up a lot. when you sit down for a dinner, what do you end up talking about? we talk a lot about the markets. we talk about the group that takes over in different periods of the markets. how people stop doing their homework. that’s where the opportunity has come. do you like groupon? i can’t talk about groupon. our president is on the board of groupon. i can’t talk about that. so somebody there likes it. if you both had to come up with an idea what group think is now. you have to follow the trends and find it and then try to be contraryians. have a disproportionate amount of money in hedge funds. from the specific area we love health care companies. a lot of opportunity there. the stocks are beaten up because of all the health care in this country. you like charles river. yeah. that’s one of my favorite visits. i’ve been to charles river. the warehouse full of rats. the the rats are everywhere. health care testing is really important. they raise rats that have genetic issues, maybe diabetes or something. then they sell them to drug companies. every five years people protest outside the labs it’s one of the companies that’s always in the public domain even though they are trying to do good things and help us live longer. you mentioned fees upon fees. you said you like blackstone. that whole world, are you surprised most crisis now that we’re getting back into a little bit of a run here there hasn’t been more pressure on fees? i’ve been surprised. i was at an investment meeting and we were talking about that. i’m surprised there hasn’t been pressure on that whole 2 and 20 world. there’s a magic to the way that they explain it. investment communities love it. they think they’re going to get something special when they’re paying extra. i don’t quite understand that. they’ll get a big bill. that’s very special bill. what’s the last stock you sold? what did you used to love but don’t anywhere. consumer products companies. something that got very, very expensive. thank you for coming in this morning. good to see you. thank you. coming up, jpmorgan again
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