Neil J. Hennessy is portfolio manager and chief investment officer at Hennessy Funds, where he personally manages or co-manages the following funds: Cornerstone Growth Fund, Cornerstone Mid Cap 30 Fund, Cornerstone Large Growth Fund, Cornerstone Value Fund, Total Return Fund and Balanced Fund.
Q3 hedge fund letters, conference, scoops etc
He has nearly four decades of financial industry experience. Neil began his career as a financial advisor, and in 1989 he opened his own broker-dealer firm. In 1996, Neil founded his own asset management firm and launched his first mutual fund. Neil has a successful history acquiring asset-management companies and starting mutual funds, and today he oversees the entire family of Hennessy Funds.
Neil is a recognized and respected asset manager, ranking among Barron’s Top 100 Mutual Fund Managers for many years, and he is a frequent guest/contributor in national financial media. Neil’s unique strength comes from employing a consistent and repeatable investment process, and combining time-tested, stock selection strategies with a highly disciplined management style. Neil leads his investment team to manage portfolios for the sole benefit of their shareholders, never straying from this core value.
Neil graduated from the University of San Diego.
I spoke with Neil at the Schwab IMPACT conference on October 29.
When we last spoke a year ago, you said it was time for advisors to prepare their clients for a market correction. Are we seeing that correction now? Please put the recent market declines and volatility into perspective.
Volatility can cause investors to overact and do things that they shouldn’t, and that’s what we’re experiencing. This will be the 20th correction since 2010, with the largest one being a drop of 15.75%.
I’ve been trying to get to the advisor community to advise them that they should tell their clients that the correction is coming. I’m not sure what the impetus is for what’s currently happening; a lot of people don’t understand that once the pendulum swings one way too far, something’s going to happen.
The asset management industry has moved from active investing to passive investing. When you have that much money in passive investments or index funds, and they start to sell, then they’re all selling the same companies at the same percentage at the same time. It has nothing to do with the individual companies or the stock market. It has to do with this move to passive investing in today’s market.
How does this market compare to the bull market of 1982 to 2000?
I see similarities. The headlines focus on the fact that this has been a nine- or 10-year bull market, but it’s not the longest bull market in history. From 1982 to mid-2000, we experienced 18 years where the market was up each year, with the exception of 1990 when the market was down 0.5%. That was in an environment with 21.5% interest rates, 18% inflation, the crash of 1987, banks and savings and loans going under in 1989 and 1990 and the dot-com craze – the whole nine yards.
Read the full article here by Robert Huebscher, Advisor Perspectives
