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Invest Like the Best

Exploring the ideas, methods, and stories of people that will help you better invest your time and money. Learn more and stay-up-to-date at InvestorFieldGuide.com
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Now displaying: September, 2020
Sep 29, 2020

Before getting to this week’s guest, an announcement: starting Thursday we will be introducing a new series of interviews. Be sure to check this same podcast feed in two days to learn more.

My guest this week goes by the pseudonym Modest Proposal. He’s both a close friend, and one of the most respected thinkers on financial twitter. I field more inbound questions about him than just about anyone, and you’ll see why in this episode. We discuss many of the biggest themes in today’s stock market, from consumer to technology to marketplace and local home services. As always, Modest brings specific insight and general frameworks to the discussion. I talk to him as often as I can because I learn something new every time, and this discussion was no exception. Please enjoy my conversation with Modest Proposal.

 

This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. 

If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.  

 

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Show Notes

(2:37) – (First question) – How investing is about underwriting the future

(5:42) – Essential tools to underwrite the future

            (7:59) – Michael Mauboussin base rate book

(9:02) – Increasing returns to scale as the most important tool

(11:36) – Example of silly investments

(14:00) – Ideas of consumer signal and non-linear beahvior

(16:30) – Why he was blown away by ibuyer.com

(19:08) – How businesses are targeting facilitating transactions

(23:11) – Ecommerce and digital penetration in business

            (25:42) – Gavin Baker podcast episode

            (26:00) – Modest proposal last podcast appearance

(27:56) – His thoughts on the extinction of so many businesses as a result of the pandemic

(32:26) – Chart tracking Product to service against homogeneous to heterogenous

            (33:41) – The Perfect Store

            (33:49) – eBoys

(43:51) – Other features of business that fascinate him

(46:29) – Ideas that pique his interest right now

(51:20) – Case study: IAC/InterActiveCorp

(59:36) – Barry Diller’s superpowers

(1:01:17) – Why he’s spent so much time exploring IAC/InterActiveCorp

(1:02:56) – Related companies to explore

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Sep 22, 2020

My guest this week is Lauren Taylor Wolfe. Lauren is the co-founder and Managing Partner of Impactive Capital. Prior to founding Impactive she spent 10 years at Blue Harbour Group, a $3 billion activist investment firm. Our conversation is on the modernization of the activist investor playbook—how investors engage with companies to make them better and improve long term outcomes. We discuss the entire activist toolkit, focuses on what has changed the most in recent years.

I’m also very excited to announce a new initiative. After years of building, operating, and investing in software, we are launching Positive Sum, a new early stage equity investing firm. You can read a bit more at positivesumadvisors.com. Now, please enjoy my conversation with Lauren Taylor Wolfe.

 

This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. 

If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.  

 

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Show Notes

(2:31) – (First question) – Her background and how she landed at Impactive Capital

(6:25) – Impactive’s strategy vs the stereotype of the activist investor

(10:55) – Potential candidates for what they do

(13:26) – How they view the small cap tech world as the space is dominated by huge companies

(15:24)  - How capital allocation has evolved over her career

            (15:30) - The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

(17:38) – Best capital allocation strategies and mistakes that most companies make

(18:48) – The levers activists pull: cap structure; capital allocation and operating structure

(22:00) – Major lessons from earlier in her career

(23:25) – Major changes in Governance as part of the ESG strategy

(26:13) – The issue of dual-class in the space

(27:35) – Features of a pristine healthy board

(28:40) – Board’s role setting incentives and objectives for management

(29:55) – How she thinks about the E&S in ESG and how it helps shareholders

(32:56) – Applying her strategy in a real-world example

(37:40) – What they look for in a business when it comes to sum of the parts

(40:29) – Businesses that are misunderstood and what she looks for in that category

(41:39) – How she manages relationships with the boards

(45:11) – What she has learned transitioning business models

(47:08) – The rise of employee activism

(50:02) – What she’s seeing in terms of diversity and inclusion in board rooms and C-Suites

(53:32) – Best practices and ways to disrupt hiring

(57:48) – Something she doesn’t understand well today that she wishes she did

(58:59) – Kindest thing anyone has done for her

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

Sep 15, 2020

My guest today is Rory Sutherland. Rory is the Vice Chairman of Ogilvy & Mather Group, which is one of the largest and most renowned advertising agencies in the world. He’s also the author of one of my favorite recent books called Alchemy: The surprising power of ideas that don’t make sense. In this conversation, we explore many of his counterintuitive ideas about business. Rory makes you think as much as anyone, so I hope you enjoy this conversation.

 

This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. 

If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.  

 

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Show Notes

(2:12) – (First question) – Why spreadsheets and logic kill magic

(5:42) – What a product/service is vs how it’s delivered and makes people feel (regular moonshot vs psychological moonshot)

(13:22) – Psychological anomalies - doing things faster, better, cheaper (Red Bull vs Coke)

(19:54) – Swiss army knife that companies should avoid

(22:50) – Don’t design for average

(24:39) – How do people approach improving their business through marketing

(27:30) – Case for direct mail

(29:22) – Turning your weaknesses into a strength

(34:29) – The seven deadly sins and how useful they are as guideposts

(37:38) – Most powerful sin for marketing

(39:14) – Reaching intelligent answers from dumb questions

(43:25) – Why the opposite of a good idea can sometimes be a good idea

(47:30) – Kindest thing anyone has done for him

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

Sep 8, 2020

My guest this week is Michael Seibel. Michael is a Partner at Y Combinator, and the CEO of YC's startup accelerator. He was the cofounder and CEO Justin.tv, which eventually became Twitch, and Socialcam. In this conversation, we discuss all Michael has learned reviewing thousands of applications to YC, interviewing countless new entrepreneurs, and watch young companies begin to grow and, occasionally, find product market fit. Listeners will also enjoy when Michael traps me big time in my thinking about AirBnb and his framework for great problems to solve. Enjoy this great conversation with Michael Seibel

 

This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. 

If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.  

 

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Show Notes

(2:22) – (First question) – Emerging trends among founders

(6:00) – The long-term impact of Covid on business

(7:16) – What an application to YC looks like and what stands out for him

(11:46) – What he wants to learn in the interviews

(13:54) – Poise in the interviews

(15:40) – How the YC experience has evolved and improvements they’ve made

(18:38) – How he defines technology

            (18:50) – Every Company is Becoming a Software Company

(21:12) – His thoughts on non-software companies and how they play into what YC does

(23:48) – Why frequency and intensity of the problem matter to him

(28:32) – Serving the supplier and building the demand

(30:38) – Bravery in founders

(36:07) – Partnerships and collaboration in venture capital investing

(37:58) – Second time founders focus on distribution

(39:23) – Coaching the psychological component of being a founder

(44:16) – Learning as a founder vs the education system

(46:08) – Customer vs investor focus of founders’ mindset

(48:16) – How teams know they are really onto something

(52:38) – His being a founder trainable or innate

(54:08) – Kindest thing anyone has done for him

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

Sep 1, 2020

My guest this week is Michael Mauboussin, the head of consilient research at Counterpoint Global. Michael is an all-time favorite guest here on the show, and this is his fourth appearance. We discuss one of the biggest topics in the world of investing: the shift from public to private markets that has taken place over the last several decades. We explore the reasons for this shift, the biggest overall changes in capital markets, and what the future may hold. Along the way we explore other fascinating topics like the rise of intangible asset investments, employee-based compensation as a form of financing, and more. If you enjoy this conversation I urge you to read Michael’s paper on the topic which will be linked in the shownotes. Please enjoy this conversation with Michael Mauboussin.

 

This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. 

If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.  

 

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Show Notes

(2:27) – (First question) – Motivation for writing the book from public to private equity

            (2:28) – Public to Private Equity in the US: A Long-Term Look

            (3:02) – The Incredible Shrinking Universe of Stocks

(4:48) – Size of the public vs private markets

(7:20) – History and changes in the public to private markets

(12:00) – Public market vs venture capital returns

(16:48) – Persistence of returns

(20:01) – Role of price and EBIDTA on the returns of a buyout

(23:31) – How buyout forms are sourcing the debt

(29:31) – Transition to businesses relying on intangibles

            (29:42) – Capitalism without Capital: The Rise of the Intangible Economy

            (30:13) – Endogenous Technological Change

            (30:36) – Should Intangible Investments Be Reported Separately or Commingled with Operating Expenses? New Evidence

            (34:18) – Explaining the Recent Failure of Value Investing

(36:21) – Superstar firms and increasing returns

(42:38) – Role on monopolies in creating network effects

(4:52) – The allocators perspective in these investments

(49:16) – How does this all impact public market active management

(51:54) – Advice to young people getting into the investment industry

            (52:30) – Jeremy Grantham Podcast Episode

(53:30) – Other areas he is researching/looking into

(55:44) – How investment work and Santa Fe research influence eachother

(56:54) – Investors to learn from

            (57:15) – John Collison Podcast Episode

 Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

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