This week’s guest is Will Thorndike, an author and investor whose book The Outsiders is an all-time favorite of mine. Our conversation is in two parts. First, we dive deep into the lessons of his 8-year research project studying CEOs who were master capital allocators. These CEOs include Henry Singleton, John Malone, Tom Murphy, Katherine Graham, and Warren Buffett. We discuss how these CEOs tended to be contrarians on topics like dividends, buybacks, acquisitions, and the use of debt. As we go through each of the tools in the capital allocators toolkit, you’ll hear several useful lessons for running or evaluating a business.
In the second part, we cover Will’s career in private equity. Will founded and continues to run Housatonic Partners, investing in buyouts, recaps, and search funds. Will has been one of the most active search fund investors for decades, and given how much time I’ve spent in past episodes on the searchers or operators in the micro-cap, permanent equity space, it was great to get the perspective of an experienced LP. As always, we also take time to survey the dangers and opportunities in today’s private equity market.
For comprehensive show notes on this episode go to http://investorfieldguide.com/thorndike
For more episodes go to InvestorFieldGuide.com/podcast.
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My guest this week is Josh Wolfe, co-founder and managing partner at Lux Capital. I had Josh on the podcast last year which was one of the most popular episodes in the shows history. This is a continuation of our ongoing conversation about investing in the frontiers of technology. My favorite thing about Josh and the way that he invests is the mosaic that he and his team at Lux are constantly building to understand the world and where new companies may fit in. We cover a crazy variety of topics from business model innovation, roles of a CEO, the military, the death of privacy, and arrows of human progress. Please enjoy round two with Josh Wolfe.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
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Show Notes
1:22 - (First Question) –Ability to tackle massive scale problems
4:05 – Key roles of leaders and his checklist for evaluating them
5:55 – Common traits among founders that make them incredible storytellers and leaders
10:22 – The concept of ill-liquidity
14:53 – Thoughts on the types of companies going public
16:41 – Most innovative business models
19:14 - Advice for LP’s
23:51 – Common devil
24:01 – The True Believer: Thoughts on the Nature of Mass Movements
25:09 – Big internal debates at his firm, starting with price discipline
28:45 – The value debate internally
33:34 – CRISPR from an investment standpoint
36:50 – Edge cases they are looking at
46:52 – How they target ideas in a single concept
50:01 – The Coast of Utopia: Voyage, Shipwreck, Salvage
51:04 – New theses that they chase
56:31 – Recent adventure with special operations guys
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Katherine Collins, who is the head of sustainable investing at Putnam Investments, a portfolio manager on two of Putnam’s sustainable investing funds, and the author of the book The Nature of Investing: Resilient Investment Strategies through Biomimicry.
Our conversation is on the ins and outs of ESG and impact investing, a young but increasingly common topic in the investing world. This is challenging ground for me as a quant, because the data available is so new and limited—so Katherine’s perspective was very helpful as we continue to learn. Given the importance of this topic, I’m also searching for more guests with both positive and negative views on the role of ESG in an investing framework, and welcome suggestions for future guests. Please enjoy my conversation with Katherine Collins.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:29 - (First Question) –Mechanical vs human judgement processes
4:21 – ESG, and the non-utility portion of it.
7:11 – Data behind the objective function that is different from returns
12:34 – What are the most interesting data sets
16:04 – How does she determine what factors to target
19:31 – Why do we know that diversity of experience/opinion/background is good for a company
21:30 – The social vertical and how it plays into her investing system and better returns
25:51 – Corporate Sustainability: First Evidence on Materiality
27:00 – Environmental factors and the issues that jump to mind
29:48 – Importance of signing the UNPRI and is it just box checking
32:33 – Data for companies on the solution oriented companies
34:53 – Why doesn’t the market recognize the Alpha
36:17 – LP interest in ESG investing
38:25 – How other groups of investors approach ESG
40:03 – Best practices at business making an impact in ESG
44:01 – Unique or interesting tactics in environmental
46:33 – Who is the biggest opponent or position in opposition of ESG
47:37 – Most interesting edge
48:20 – Playbook for business managers thinking about social for the first time
49:59 – Measurements vs principles/values
51:21 – Advice to quants trying to use ESG in how they gather data
53:04 – Most memorable encounter with a company through the lens of ESG
53:53 – Where to learn more about ESG
54:50 – How much role regulation plays in the future of business sustainability
56:30 – Any more lessons from her research into natural systems
57:05 – Kindest thing anyone has done for her
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week Geoffrey Batt and the topic of our conversation is how to earn transformational returns in very hard markets. In his case, that means Iraqi equities which we cover in detail. He now runs a large pool of capital in Iraqi stocks through his firm Euphrates, but the journey was arduous to say the least. This is one of my favorite boots on the ground contrarian investments stories thus far on the podcast. I hope you enjoy the story and the lessons that Geoff has to offer.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
1:15 - (First Question) – What does it take to earn transformational returns
4:43 – How he deals with LPs, especially given the volatility of the market he invests in
10:26 – Why LPs have to think about the other investors in a fund
1:17 – How Geoffrey got interested in the Iraqi market
16:15 – Factors he was considering when exploring Iraq
16:53 – Harvey Sawikin Podcast Episode
19:20 – Visiting companies in Iraq
22:30 – Most memorable meeting with a company on his first trip
27:18 – Size and nature of Iraqi market when he first got interested
30:44 – A specific allocator in Iraq
34:37 – Does price reflect the work over there
37:51 - What does he perceive as his role in the changes to Iraq’s equity market
40:12 - How do Iraqi equities look today compared to when he started and is the opportunity still interesting
44:14 – How businesses perceive him now that the market has opened up more
47:28 – Scale of potential return and where it comes from
49:51 – Advice for younger aspiring investors exploring frontier markets
52:16 – Kindest thing anyone has done for Geoffrey
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
My guest this week is Brian Singerman, a partner at the venture capital firm Founders Fund. Founder’s Fund is widely considered one of the top VC firms and its partners are known to have diverse investment strategies.
Brian invests across industries and focuses on backing exceptional founders. You’ll hear right off the bat that he cares about moat, market, and strong execution. I love his point that the only way to become a good investor is to do a lot of investing. He describes himself an investor who uses his gut a lot, which took me a while to get used to in our conversation. But I have to say that at the end of this episode I felt refreshed and generally excited to keep putting in reps in my own way, both in the podcast and the quant research settings. I hope you enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notesd
1:28 - (First Question) – What Brian looks for when evaluating companies
2:38 – What a moat looks like in investing
3:11 – Most memorable initial moat
4:17 – How he evaluates a potential market
5:28 – Attributes they look for in founders
6:24 – Most significant technological changes and how they have impacted his investment strategy
8:57 – The sourcing of his deals
13:00 – Qualities he likes at various stages of deal sourcing
13:46 – How he evaluates the teams he may fund
15:17 – His take on the pricing landscape for deals
16:13 – How he allocates his time as a board member
17:16 – Thoughts on long term stock exchange
18:26 – How much research does he do on an industry in order to stay on top of his investments
20:10 – Outside information he follows
21:20 - Other investors he’s learned a lot from
23:12 – What values does Peter Thiel instill in the partners
24:05 – Process of StemCentrics
26:03 – Other places holding his interest today
26:57 – His interest in e-sports
31:44 – Interactions with LP’s
32:51 – What they look for in recruiting new partners
34:32 – How geography impacts the opportunity for new ideas
36:24 – Opportunities in public companies and other investment types
37:57 – Aspects of overseeing a startup venture
39:26 – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag