Thomas Ricketts, CFA, joins the pod to discuss his investment philosophy. This episode focuses on an investment style that, according to Bill's perception, seeks to identify change and innovation before the market identifies it. Bill was initially a little skeptical of doing an "innovation episode" given how the term has been used in the financial community. However, after diligencing Tom, Bill felt comfortable having Tom on the pod. This conversation adds value to The Business Brew library. Thank you to Tom for joining the show!

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Tom's Bio
Thomas Ricketts, CFA, founder of Evolutionary Tree Capital Management (see https://evolutionarytree.com), serves as Chief Investment Officer, Portfolio Manager, and Research Analyst. Over his 27-year investment career, he developed significant expertise in portfolio management, investment research, and executive management. Prior to founding Evolutionary Tree, Mr. Ricketts was a Sr. Portfolio Manager on Sands Capital’s flagship Select Growth strategy, a $20+ billion concentrated strategy of high-quality, sustainable growth businesses. Mr. Ricketts was one of the longest-tenured investment professionals at Sands Capital. Over the years, he contributed to building and leading the research team and attracting and retaining a broad client base of institutional and high-net-worth clients.
Mr. Ricketts joined Sands Capital in 1994 as the Assistant to the President. He worked closely with founder Frank Sands, Sr. during the startup phase and early years of the firm, helping to grow the firm from less than $100 million in assets under management to approximately $40 billion in assets 22 years later. In 2008, Mr. Ricketts assumed the role of Sr. Portfolio Manager on the Sands US Large-Cap Growth strategy, working as a Co-PM to oversee the $20 billion strategy, and was a decision maker on that strategy for eight years.

Detailed Show Notes

The paper Tom mentions can be found here.

5:00 - Background

13:00 - Valuation as part of the process

18:00 - 2022's biotech opportunity

20:50 - Maintenance vs. growth spend

29:20 - nCino as an example

34:00 - Why Salesforce has an incentive not to push too hard with Force.com

39:00 - Ingredients of a successful investment

52:20 - Avoiding hype

59:30 - Risk Reducers

1:13:50 - Why to exit before maturity

1:18:52 - Lessons from Frank Sands (bet best ideas, quality will out itself eventually, invest in solutions, think long term, look for long term growth in earnings power)

Ep. 106 - Bill Payne (Part 2)