In today’s episode, Shawn O’Malley (@Shawn_OMalley_) discusses the concept of hidden compounders, where some of the most boring businesses can make the best long-term investments. Compared to well-known compounders like Apple and Amazon, which have well-known track records in compounding returns for investors, there are loads of lesser-known companies with less obvious competitive advantages that operate in less exciting industries with equally impressive track records in recent years.
You’ll learn what it means to be a hidden compounder, why many hidden compounders have invisible moats, what to look for in finding hidden compounders, what makes companies like Old Dominion and Teqnion so successful, why intangible assets can provide more enduring advantages than physical assets, why Peter Lynch loves boring businesses, plus so much more!
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IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
03:13 - What is a hidden compounder, and how to think about their invisible moats
03:43 - Why Peter Lynch loves boring businesses
06:44 - What signs to look for in identifying hidden compounders
31:36 - What the Lindy effect is, and how it relates to hidden compounders
32:27 - How Warren Buffett has set the standard for investing in boring, hidden compounders
37:48 - Why intangible competitive advantages can be the most enduring
40:17 - Morgan Stanley’s conclusions on investing in compounders
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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