Unpacking Unilever and PayPal: Earnings and Compensation

This chapter explores management issues at Unilever and PayPal, emphasizing the need for change to harness untapped earnings. It also addresses the growing implications of stock-based compensation on technology companies' financials, using Microsoft and Intuit as examples to demonstrate how such practices can distort true profitability.

Transcript

chevron_right

Play full episode

chevron_right

Transcript

Episode notes

On today’s episode, Clay Finck discusses the investment philosophies and framework of Terry Smith, who is the founder and CEO of Fundsmith and also known as the Warren Buffett of Great Britain.

Smith started Fundsmith in 2010, and ever since has returned 478% to his investors versus his benchmark returning 256%. He did this using the simple framework of buying good companies, not overpaying, and holding them for the long-term.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

02:12 - Why Terry Smith only seeks to own high-quality companies.

04:52 - How investors can go about determining the quality of a business.

08:01 - How Terry Smith compares the valuation of his portfolio against that of the S&P 500.

15:15 - Why investors must be cognizant of stock-based compensation when valuing a company.

29:28 - Why macroeconomic views and opinions are irrelevant for investors in quality businesses.

46:39 Why stocks are the best long-term investment relative to other asset classes.

53:51 - What Terry Smith’s top US equity holdings are today.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Terry Smith’s Shareholder Letters.
Rebecca’s Article on Mean Reversion.
Don’t miss our review of Four Wide Moat Stocks for 2023.
Check out our takeaways from Warren Buffett's Shareholder Letters.
Follow Clay on Twitter.

NEW TO THE SHOW?

Check out our We Study Billionaires Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

River
Toyota
Sun Life
The Bitcoin Way
Range Rover
Sound Advisory
BAM Capital
Fidelity
SimpleMining
Briggs & Riley
Public
Shopify

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Learn more about your ad choices. Visit megaphone.fm/adchoices

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!

Get the app

Home Top podcasts Popular guests