John Rogers, founder of Ariel Investments. Danny Moloshok/Reuters This story is available exclusively to Insider subscribers. Become an Insider and start reading now.
John Rogers has been one of Wall Street’s most successful stock pickers for 35 years.
His Ariel Fund thrived in the 2010’s bull market and is still outperforming today.
He told Insider about the stocks he believes in and the positions he’s building.
Investors who get their tips from Reddit, TikTok, or Twitter don’t know how good they have it.
John Rogers was already a relatively experienced investor by the time he got to college, as his father had begun giving him stocks and educating him about strategy several years earlier. Hungry for more knowledge, Rogers recalls trekking down to Princeton’s Firestone Library to review stock tips from experts like Joe Granville.
“I was trying to get rich quick and I’d get all the hot newsletters,” he said. “They were popular in the late seventies and there were so many of them.”
That led to a hot stock pick he’s never forgotten, even 40 years later. The company was called Solar Industry Colorado.
“I was all excited. Solar energy was coming,” he said, explaining why it’s stuck with him. “Within six months, the company completely disappeared from the stock pages. I lost 100% of my investment literally overnight chasing the hot concept of a solar energy stock.”
It didn’t set him back for long. Rogers would go on to found Ariel Investments, the largest minority-run mutual fund firm in the US and the operator of the best-performing mid-cap stock fund of the last bull market . That flagship fund is about to mark its 35th anniversary .
But Rogers warns that a similar fate could be in store for people who’ve made big bets on cryptocurrencies or meme stocks. He describes both as areas of excess that are going to run into trouble.
“You’re going to have a generation of investors that are going to get burned and are gonna to take their time coming back into the market because of what’s happened here,” he says of people who end up buying in asset bubbles. “They’re not producing anything, they’re not providing any service. It’s just something that is valued and goes up just because it’s been going up.”
Rogers acknowledges that under the circumstances, it’s a little more difficult to get people to pay attention to mid-cap stocks and a value approach. But when he wants them to focus, he has a 35-year track record to fall back on, and the fund is still beating more than 90% of its peers this year according to Morningstar.
Here’s what Rogers and Ariel Investments are betting on right now. (1) Gentex
The mirror maker is his newest investment, and Rogers says Gentex has excellent technology and the kind of competitive moat that Warren Buffett always says he’s searching for.
“They make traditional mirrors that are in cars, but they have extraordinary technology and are able to use mirror technology in ways that are really extraordinary from selling them to Boeing, to the major auto manufacturers as cars get to be more computer led,” he said. (2) ADT
Rogers describes ADT as a way to invest in the improving smart-home trend and benefit from rising fears about crime. He says it’s a position the firm has been adding to recently.
“There’s a lot of cool things happening as you get us really smart home,” he said. “ADT has partnered with Google and we think this will be a lot of other partnerships that will occur, that you’ll create a kind of immersion being able to protect your home, open up the garage door, and keep the temperature where you want it to be.” (3) Madison Square Garden Entertainment
Rogers has been talking up MSG Entertainment for some time, arguing that it’s both a bet on the economic recovery of New York City and on a comeback in a wide variety of aspects of the entertainment business, including sports and concerts, with future growth coming from its Sphere venue in Las Vegas.”If you believe in New York City is going to come back and the real estate is going to come back, this is a great piece of property in one of the greatest cities in the world,” he said. “They’re diversified. They own a regional sports network, they own TAO restaurant chain, they control the Rockettes.” (4) ViacomCBS Rogers makes a similar argument in support of his thesis for investing in ViacomCBS , saying it’s a highly-diversified […]
source Value investing legend John Rogers told us 4 stocks he’s been buying for the market’s next phase — and why the meme stock and bitcoin rallies remind him of a mistake he made in his earliest days