Paul Black, Portfolio Manager and Co-CEO of WCM Investment Management, shares insights from his remarkable journey since joining the firm in 1989. He discusses the significance of corporate culture in defining successful investment strategies and emphasizes learning from failures. The conversation dives into growth stocks, examining the complexities of international markets, particularly Japan. Paul also highlights the transformational impact of company values on performance, offering valuable lessons on perseverance and maintaining a balanced approach in investing.
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question_answer ANECDOTE
Early Investing
Paul Black's interest in investing began with a small inheritance.
He bought South African gold stocks and saw quick profits, sparking his shift from marketing to finance.
question_answer ANECDOTE
Early Career Mistakes
Paul Black learned about investing through trial and error, making mistakes like shifting clients from IBM to Digital Equipment.
This taught him the importance of not solely chasing rapid growth.
insights INSIGHT
Optimism in Growth Investing
Growth investing requires an optimistic view of the future, contrasting with value investing's more pessimistic approach.
Paul Black believes optimists are more likely to succeed in the long run.
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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.
Common Stocks and Uncommon Profits
Philip A. Fisher
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'.
My guest on today’s first meeting is Paul Black of WCM Investment Management. This show is a replay of our conversation on Capital Allocators last year, and has been one of the most listened to conversations with a manager on the show. At the time, WCM managed $26 billion and since then they’ve continued to perform and grow. Today, WCM oversees $40 billion and earlier this year announced the sale of a minority stake in their business to Natixis Investment Managers.
Paul Black is portfolio manager and Co-CEO of WCM Investment Management, a $26 billion manager of global equities that he joined when it was a $200 million boutique in 1989. His early career included positions at Wells Fargo Bank and Bank of America.
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.
Capital Allocators – Inside the Institutional Investment Industry 
