Paul Black, Co-CEO and portfolio manager at WCM Investment Management, shares his journey from a small boutique to managing $26 billion in global equities. He discusses the art of identifying growth stocks, emphasizing the importance of company culture and competitive advantages. Paul delves into lessons learned from past mistakes, navigating financial challenges, and the contrast between growth and value investing. He also highlights resilience and disciplined decision-making, while reflecting on the importance of work-life balance in today’s fast-paced environment.
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question_answer ANECDOTE
Early Investing Success
Paul Black's interest in investing began with a fortunate investment in South African gold stocks during college.
This early success, driven by gold's price surge, influenced his career shift to finance.
volunteer_activism ADVICE
Sustainable Growth
Focus on sustainable growth, not just rapid growth.
Rapidly growing companies can be risky and destroy capital, as seen with Digital Equipment Corporation.
insights INSIGHT
Optimism in Growth Investing
Growth investing requires an optimistic outlook on the future, unlike the more pessimistic nature of value investing.
Optimists tend to succeed in the long run, aligning with the idea of never betting against great growth companies with strong cultures.
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In 'Common Stocks and Uncommon Profits', Philip A. Fisher outlines his investment philosophy, which focuses on identifying and investing in high-quality growth companies. The book is renowned for Fisher's '15 points to look for in a common stock', which include evaluating a company's products, management, sales organization, research capabilities, and long-term growth prospects. Fisher advocates for a qualitative approach to investing, emphasizing the importance of understanding the business and its management rather than relying solely on quantitative metrics. The book also discusses when to buy and sell stocks, the role of dividends, and the pitfalls of short-term thinking in investing.
The intelligent investor
Jason Zweig
Benjamin Graham
Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.
The Culture Cycle
How to Shape the Unseen Force That Transforms Performance
James L. Heskett
In 'The Culture Cycle', James Heskett presents a framework for understanding and managing corporate culture, demonstrating how it can significantly impact organizational performance. The book highlights the 'culture cycle' as a tool for shaping effective cultures, linking culture to strategy, and quantifying its economic value through metrics like retention and referrals.
Paul Black is Co-CEO and portfolio manager at WCM Investment Management, a $26 billion manager of global equities that he joined when it was a $200 million boutique in 1989. With so much of the institutional world, including my own training, focused on value investing, I was pleasantly surprised to learn about a large, high performing growth stock manager located in a non-descript building in Laguna Beach, California. Our conversation starts with Paul’s trial-by-fire entry into the business and turns to growth stock investing, including defining a great growth company, searching for widening moats, assessing a culture tied to competitive advantage, creating a positive culture, learning from mistakes, identifying tailwinds, and protecting the downside. Paul embodies the principals he preaches and offers some tasty food for thought. Learn More Follow Ted on Twitter at @tseides or LinkedIn Subscribe to the mailing list Access Transcript with Premium Membership
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