TIP651: Value Investing in a Growth-Obsessed Market w/ Scott Barbee
We Study Billionaires - The Investor’s Podcast Network
Unpacking Value Investing Strategies
This chapter explores essential strategies in value investing, including the assessment of book value and cash flow generation. It highlights the significance of strategic thinking and research in identifying undervalued assets, especially in a market dominated by growth-oriented strategies.
On today’s episode, Kyle Grieve chats with Scott Barbee about how he managed to maintain a deep value-based strategy while it’s gone out of fashion, the three buckets of risk Scott uses to assess businesses, what a genetic contrarian is and why it can be a powerful advantage, why fossil fuels aren’t going anywhere anytime soon and why opportunities exist in that industry, how he navigated a 72% drawdown during the GFC, and a whole lot more!
Scott is the founder of the Aegis Value Fund. Which was created in 1998. Prior to Aegis, Scott worked as an analyst covering oilfield services at Simmons & Company. He also had a stint as a deep value advisor for Donald Smith & Company. He received his MBA from the Wharton School and the University of Pennsylvania. He also holds a B.S in Engineering and a B.A in Economics.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
02:41 - Some of the key lessons he learned from investing legends like Bill Ackman, Bob Robotti, Peter Cundill, and Walter Schloss
08:17 - How Scott has managed to maintain a value-based strategy when many investors have bailed to chase more expensive stocks
12:00 - Scott's three buckets of investing risk
16:10 - A breakdown of the concept of a "genetic contrarian."
17:30 - Why risk management is key to investing in businesses with high levels of uncertainty and how to take advantage of it
24:27 - Scott's views on energy and how fossil fuels are unlikely to disappear anytime soon
33:36 - The potential downsides Scott sees in super high-quality businesses
34:41 - Why lower-quality businesses with volatile earnings look very attractive right now due to a widespread de-leveraging
43:55 - How Scott dealt with a 72% drawdown during the GFC
And so much more!
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
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