MI380: Hidden Compounders: The Best Stocks Hiding In Plain Sight w/ Shawn O’Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
Discovering Hidden Compounders
This chapter explores the investment potential of 'hidden compounders', focusing on overlooked companies like Murphy USA that demonstrate exceptional returns despite being in unglamorous markets. It emphasizes the significance of strong relationships and disciplined strategies in unlocking value for investors.
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!
Prefer to watch? Click here to watch this episode on YouTube.
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.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
- We Study Billionaires episode 295 with Mohnish Pabrai | YouTube Video.
- Millennial Investing episode 373 on Monster Beverage | YouTube Video.
- Millennial Investing episode 379 on quality investing for the long-term | YouTube Video.
- Read One Up On Wall Street by Peter Lynch.
- Check out Invisible Moats blog post from Chris Mayer.
- Guy Spier’s interview with Mohnish Pabrai on Hidden Moats.
- Check out Teqnion stock explained, YouTube interview for We Study Billionaires.
- Morgan Stanley’s 2016 report on the value of equity “compounders”.
- Check out the books mentioned in the podcast here.
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