MI379: Quality Investing: Learnings From John Huber w/ Shawn O’Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
The Essence of Value Investing
This chapter explores the principles of value investing, focusing on the importance of buying quality companies at undervalued prices. It highlights the contrast between cyclical and stable industries and underscores the significance of intrinsic value and sustainable profitability in achieving long-term investment success.
In today’s episode, Shawn O’Malley (@Shawn_OMalley_) explores the fundamentals of, and merits in, being a long-term, quality-focused investor, using John Huber’s success and philosophy as an example to follow. Huber is the rare money manager who truly aligns incentives with his investors by using the template created by Warren Buffett back in his days before Berkshire Hathaway.
You’ll learn about what makes Huber’s fee structure special, Huber’s philosophy for investing long-term in high-quality companies, how time-arbitrage gives long-term investors a structural advantage in markets, how to blend both a focus on value and quality, the importance of assessing compounding power, how much to pay for quality companies, how changes in valuation multiples affect returns even for great businesses, plus so much more!
Prefer to watch? Click here to watch this episode on YouTube.
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
01:36 - Why John Huber used the Buffett partnership fee structure in his fund
03:44 - How time-arbitrage gives investors an advantage over time
04:55 - What it means to find investments where you can win big, and if you lose, not lose much
11:40 - How to calculate ROIC and why it matters for compounders
28:11 - What price to pay for the highest-quality businesses
32:33 - How changes in price-to-earnings multiples can affect returns over time
35:36 - How to blend both value and quality as investing styles
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
- Saber Capital Management’s website.
- Check out What Is Your Investing Edge? Article from John Huber.
- John Huber’s latest interviews on Millennial Investing (YouTube Video) and We Study Billionaires (YouTube Video).
- Follow John’s Substack: Base Hit Investing.
- Buffett’s 1987 shareholder letter discussing returns on capital.
- Check out the books mentioned in the podcast here.
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