Millennial Investing - The Investor’s Podcast Network

MI308: The Options Advantage For Value Investors w/ Matthew Peterson

Nov 28, 2023

01:06:34

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Matthew Peterson, a fund manager in the investment industry, discusses the powerful effects of using post mortems, the benefits of a concentrated portfolio, how to own shares at below-market prices with options, insights into his structured dividend capture system, updates on a recently exited business, and more.

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Quick takeaways

Looking beyond financial statements is crucial for finding value that others may have overlooked.

The importance of understanding separate accounts versus pooled asset vehicles and choosing the right fee structure for fund managers.

Options can be a valuable tool for long-term investors, allowing them to decrease the cost basis of owning stocks and generate income through covered calls.

Deep dives

The Evolution of Investing Style

Early investors focus on accounting and financial statements, but then start looking for value beyond the statements. Screening stocks based on financial statements can lead to type 1 and type 2 errors. Type 1 errors include firms that shouldn't be in the portfolio, while type 2 errors mean missing great opportunities. Looking beyond financial statements is crucial to find value that others may have overlooked.

Introduction

3min

The Origin Story and Advice for Starting a Fund

3min

Comparing Separate Accounts and Pooled Asset Vehicles for Managing Investments

4min

The Value of Post Mortems and Concentrated Portfolios

18min

Using Put Options in Value Investing

22min

Analyzing Sears and Sarah Tidge: From Bankruptcy to REIT

10min

Analyzing the Financial Situation and Investment Strategy of a Company

4min

Kyle Grieve chats with Matthew Peterson about his journey into the fund management industry, what potential fund managers should consider before starting a new fund, the powerful effects of using post mortems, how he used the Kelly criterion to create his concentrated portfolio, the use case for options for long-term value investors, why options can be a win-win for investors who want to own shares with cheaper entry prices than the market offers, the Seritage Growth Properties situation, and a whole lot more!

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

03:12 - Matthew’s origin story for the fund with limited assets.

05:41 - The importance of a good fee structure.

19:25 - The benefits of a concentrated portfolio.

31:35 - How to own shares at below-market prices with options.

43:29 - Insights into his structured dividend capture system.

57:33 - Updates on a recently exited business.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Read Matthew Peterson’s fund letters here.
Watch Matthew Peterson on YouTube here.

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