TIP622: Finding Certainty in an Uncertain World w/ Joseph Shaposhnik
We Study Billionaires - The Investor’s Podcast Network
The Role of Quality Management in Business Sustainability
This chapter examines the critical importance of effective management in optimizing returns on invested capital. It addresses the risks of complacency in successful businesses and highlights the impact of management quality on long-term sustainability through real-world examples.
On today’s episode, Clay sits down with Joseph Shaposhnik to discuss his high quality investing approach. Since its inception in 2015, the TCW New America Premier Equities fund has compounded at 15.8% per year versus the benchmark of 12.0%.
Joseph is the Portfolio Manager of TCW New America Premier Equities, Global Premier Sustainable Equities, and Global Space Technology Equities portfolios. According to Nasdaq eVestment, the TCW New America fund has outperformed 99% of its peers.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
03:25 - The two types of recurring revenue.
13:37 - Why certainty is an essential part of a quality investing framework.
25:02 - How Joseph thinks about portfolio allocation by industry.
28:02 - Value accretive versus value destructive capital allocation decisions.
36:09 - How understanding incentives can make us better investors.
36:53 - Why we should ignore Buffett’s advice of buying businesses so great that an idiot can run it.
46:33 - How Joseph developed his own investment approach after working under two investment legends at Fidelity.
51:56 - Why Joseph believes that quality investing is the best approach to match his investment objectives and temperament.
58:33 - Why growth in free cash flow per share is Joseph’s number one focus as an investor.
1:00:28 - An update on a few of Joseph’s portfolio holdings
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, Kyle, and the other community members.
- Learn more about the TCW New America Fund.
- Check out Buffett’s 1996 Shareholder Letter.
- Book Mentioned: What I Learned About Investing from Darwin by Pulak Prasad.
- Book Mentioned: Big Money Thinks Small by Joel Tillinghast.
- Episode Mentioned: RWH017: Fidelity Legend w/ Joel Tillinghast | YouTube Video.
- Follow Joseph on LinkedIn.
- Follow Clay on Twitter.
- Check out all the books mentioned and discussed in our podcast episodes here.
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