TIP705: The Quiet Winners: Unveiling Hidden Value w/ Adam Wilk
We Study Billionaires - The Investor’s Podcast Network
Intro
This chapter delves into the unique investment strategies of a micro cap-focused fund that defies the norm by demonstrating that small cap stocks can indeed yield exceptional returns. The discussion highlights the investor's background in talent scouting and the critical role of research and management understanding in identifying undervalued opportunities.
On today’s episode, Kyle Grieve chats with Adam Wilk about the powers of incremental improvement, what he learned as an NBA scout about finding hidden value, why making the investing process more labour intensive has led to outperformance, the hidden difficulties of identifying quality in small-cap stocks, how to utilize aspects of special situation investments to find hidden compounders, the shared qualities found in Adam’s best investments, and a whole lot more!
Adam Wilk is the Founder and Portfolio Manager of Greystone Capital Management, LLC, leading a concentrated small and micro-cap long-only strategy. With a background in professional sports, including roles as a scout for NBA teams like the Spurs and Rockets, Adam honed skills in talent evaluation, data analysis, and risk management. His passion for value investing began in 2013, inspired by Warren Buffett’s writings, leading to a career pivot and the creation of Greystone. Adam shares his investment insights through research reports and his blog, Pound the Rock Investing.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
04:14 - How small bits of incremental progress lead to outsized returns over time.
07:51 - Key insights in finding undervalued assets that he learned from looking for undervalued talent for an NBA team.
10:00 - Why making the investing process labour-intensive creates differentiated insights.
15:48 - Why keeping costs low in a fund decreases sensitivity to market volatility.
19:58 - Why identifying quality in small caps comes with inherent difficulty compared to more discovered businesses.
20:35 - Why change in expectations is such a powerful catalyst.
31:13 - How special situations can cause underappreciation of a quality business and obscure upside.
33:55 - Insights into how to evaluate and underwrite management teams.
35:22 - Some of the biggest lessons Adam learned about management from his greatest investment mistake.
49:28 - The qualities that have shown up in Adam's biggest winners.
And so much more!
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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