Value After Hours S06 E05 John Huber on deep value stocks, compounders, neversell and concentration
Feb 13, 2024
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Guest John Huber discusses topics such as value in small and mid-cap companies, ESG impact on stock valuations, fiber optic cables, downhill skiing, diversification in investing, and successful investment in Japan using borrowed funds. The chapter highlights the importance of valuation, effective capital allocation, and finding undervalued companies.
Consider time horizons when making investment decisions and align strategies accordingly.
Diversification level varies based on personal preferences, risk appetite, and ability to research and monitor investments.
Find the right balance between long-term perspective and the need to reassess investments when necessary for consistent returns.
Deep dives
The Importance of Time Horizons in Investing
Investors need to consider their time horizons when making investment decisions. Short-term optimization may require taking more risks, while longer-term optimization may require a more conservative approach. The idea of ergodicity highlights the importance of aligning investment strategies with time horizons.
The Dilemma of Diversification
Diversification is generally beneficial, but the level of diversification depends on personal preferences, risk appetite, and the investment opportunity set. While more diversification is usually better, investors must also consider their own ability to research and monitor a large number of investments.
Balancing Never Sell and Punch Card Mentalities
Investors must find the right balance between the never sell mentality and the punch card mentality. While adopting a long-term perspective is important, it's also crucial to reassess investments and make changes when necessary. The key is to hold investments that have long-term potential and generate consistent returns.
Buffett's Approach to Investing
Buffett's investment decisions are based on time horizons and the expected returns of different opportunities. He focuses on high-quality businesses but is not afraid to sell and reallocate capital when necessary. Buffett's ability to adapt his investment strategy demonstrates the importance of being flexible in an ever-changing market.
The Value of Patience and Adaptability
Patience and adaptability are vital qualities for investors. Holding investments over the long term allows for compounding and taking advantage of opportunities that may emerge. However, being adaptable and open to reassessing investments ensures that investors can make changes when circumstances change or better opportunities arise.
Value: After Hours is a podcast about value investing, Fintwit, and all things finance and investment by investors Tobias Carlisle, and Jake Taylor. See our latest episodes at https://acquirersmultiple.com/podcast
We are live every Tuesday at 1.30pm E / 10.30am P.
About Jake
Jake's Twitter: https://twitter.com/farnamjake1
Jake's book: The Rebel Allocator https://amzn.to/2sgip3l
ABOUT THE PODCAST
Hi, I'm Tobias Carlisle. I launched The Acquirers Podcast to discuss the process of finding undervalued stocks, deep value investing, hedge funds, activism, buyouts, and special situations.
We uncover the tactics and strategies for finding good investments, managing risk, dealing with bad luck, and maximizing success.
SEE LATEST EPISODES
https://acquirersmultiple.com/podcast/
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https://acquirersmultiple.com/screener/
FOLLOW TOBIAS
Website: https://acquirersmultiple.com/
Firm: https://acquirersfunds.com/
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ABOUT TOBIAS CARLISLE
Tobias Carlisle is the founder of The Acquirer’s Multiple®, and Acquirers Funds®.
He is best known as the author of the #1 new release in Amazon’s Business and Finance The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market, the Amazon best-sellers Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014) (https://amzn.to/2VwvAGF), Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012) (https://amzn.to/2SDDxrN), and Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors (2016) (https://amzn.to/2SEEjVn). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law.
Prior to founding the forerunner to Acquirers Funds in 2010, Tobias was an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer. As a lawyer specializing in mergers and acquisitions he has advised on transactions across a variety of industries in the United States, the United Kingdom, China, Australia, Singapore, Bermuda, Papua New Guinea, New Zealand, and Guam.
He is a graduate of the University of Queensland in Australia with degrees in Law (2001) and Business (Management) (1999).
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