Fund Manager Herro said this to Barron's regarding their investment: "But the market was completely missing the turnaround at Mercedes-Benz Autos as well as the commercial vehicles. Investors have been solely focused on Chrysler. Chrysler is certainly having its issues, but one could argue that Chrysler is in a slightly a better position than Ford and GM. Yet, a healthy Chrysler is less than 20% of Daimler's value. This is a big company and it has a lot of different aspects to it and shareholders of the world have been ignoring that Mercedes' operating margin has gone from 1% or 2% to 7%. A similar expansion has taken place in profitability on the commercial-vehicle side. There are some real changes taking place at Mercedes in design and, more importantly, quality. You can see it in the sales numbers. There is a new S-class that came out, and that is a very important product for Mercedes because they sell a decent amount of them and they are high-margin. They have a new C-class coming out in about two months. The only new product that doesn't seem to be doing well is the R-class, which is a cross between an SUV and a minivan. Chief Executive Dieter Zetsche has done a good job getting this company focused on its business."

Fund manager Herro likes banks that have an asset management business as well.

In a 2/19/07 interview with Barron's, Oakmark manager David Herro was quoted as saying: "The old and busted growth-blue-chips, whether they are in the U.S. or based internationally, are the most attractively priced equity assets out there. This is where there is value. For example, GlaxoSmithKline [ticker: GSK] stock is trading at the same level it was in the mid '90s, and yet its earnings power is substantially higher. There has been a massive de-rating that has happened in such industries as pharmaceuticals, media, and consumer nondurables."

Fund manager Herro likes banks that have an asset management business as well.

As quoted in Barron's: "We've added HSBC [HBC]/Hong Kong Shanghai Bank, which looks like a stock that hasn't done much. Its local shares are trading at 919 pence. But this is a company that has good exposure to Asia and to the emerging world. They have a huge franchise in the greater Hong Kong and Southern China area. North America, including Latin America, is almost one-third of their business. One-third is Europe and one-third is Asia."

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Herro believes that demographics and the growing number of luxury car buyers will benefit this company greatly.

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