Ep. 30 - Secular Cyclicals Investing with Yaron Naymark

Yaron Naymark is the Founder and Portfolio Manager at 1 Main Capital, a boutique investment firm that makes concentrated investments in high-quality, reasonably-valued businesses with long reinvestment runways. The firm also invests in special situations with asymmetric risk return profiles. Richard talks to Yaron about how he entered the investment world, what led him to start a fund and how he sees great opportunities in Secular Cyclicals.

 

To learn more about Yaron please visit www.1maincapital.com or follow him @1MainCapital on Twitter. To learn more about Richard or to request a transcript of the podcast please visit www.thinkaen.com.

Show Notes:

(1:10) Launching 1 Main Capital. Growing up in Florida with Entrepreneur parents and being a First Generation American.

(04:57) Passion for investing at young age. Getting into investing banking from Florida and how Yaron networked into a job.

(08:11) Luck versus skill as well as the interview process at investment banks and private equity. Being prepared for interviews, knowing what to say and what not to say.

(11:50) Detailed explanation between the differences in investment banking and private equity.

(15:08) Starting his own investment partnership. Personal capital and network of close contacts and former colleagues.

(18:01) 1 Main Capital’s Strategy of compounding capital and avoiding permanent impairment risk. Core Investments, oligopolies, etc. Yaron also talks about his opportunistic bucket.

(25:35) Time it takes to research a stock and then make it a real position, which varies depending on whether it’s a core or opportunistic position.

(27:07) How to think about leverage in the fund. 

(29:27) Favorite themes, introducing secular cyclicals – how opportunities can be found in cyclical industries with massive secular tailwinds.

(31:04) Introduction to Malibu Boats, large secular cyclical in the portfolio. Other top ideas to include Ricks and KKR. 

(39:09) Investing in companies that make a lot of acquisitions, what makes a good deal versus a bad one. How Yaron’s background in private equity and investment banking help him evaluate transactions.

(45:52) Speaking with management teams. Small cap companies versus the larger Googles of the world.  

(48:19) Valuable tips for aspiring investment managers.

(50:36) Wrap up and contact information.