MiB: Fidelity Contrafund’s Will Danoff

This week, we speak with Fidelity‘s Will Danoff, who manages the firm’s storied Contrafund. The large-cap growth fund has $139 billion in assets under management. During Danoff’s 30-year tenure, the Fidelity Contrafund has outperformed the S&P 500 in 100% of rolling 10-year time periods; it has outperformed the S&P 500 Index by an average of 3.21 percentage points per year over those three decades.

Danoff regales us with a variety of stories about how he selected and held onto such outsized winners as Netflix, Home Depot, Starbucks, Amazon, Shopify, Facebook, Google, Walmart, Costco, Apple and Microsoft.

He discusses his revelation about why you have to “go big.” Warren Buffett suggested

Why own 1000 stocks in a portfolio? If you do that, you might as well just buy an index. Then there are the sorts of companies that you end up saying “I wish I owned more of those.” If you like a stock as an investment, he says you should to own it in size, with more of a concentrated portfolio.

Example: He tells the early 2,000s story of seeing a presentation by the Ask Jeeves new CEO, discussing natural language search. During the course of his conversation, the company discussed their plans to raise market share from 1% to 5%, and why Google was “crushing everybody” with a 55-60% market share (40% web +15% AOL search). Danoff asked why Google was doing so well, and the CEO of Ask Jeeves explained why Google’s algorithm was so vastly superior to the rest of the industry, and were likely to gain even more market share. Danoff went back to his office, did more research into Google and was a big buyer during the August 2004 IPO, and added even more during the years afterward.

Danoff explains why “Fidelity is a great place to manage money;” He has worked with Peter Lynch, Joel Tillinghast, Jeffrey Vinik, Ned Johnson,

A list of his favorite books are here; A transcript of our conversation is available here Monday.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Doug DeMuro, one of the most popular online car reviewers. His YouTube channel has 3.7 million subscribers; his videos have been streamed 1.1 billion times, with each video averaging 2 million views. He conceived of and co-founded the uction site Cars & Bids. He is he author of two books: Plays With Cars, and Bumper to Bumper.

Stitcher embed to come