We Study Billionaires - The Investor’s Podcast Network TIP622: Finding Certainty in an Uncertain World w/ Joseph Shaposhnik
110 snips
Apr 12, 2024 
Joseph Shaposhnik, a seasoned Portfolio Manager at TCW, shares his high-quality investing philosophy. He discusses the importance of certainty in investing, emphasizing recurring revenue as a key criterion for evaluating business quality. Joseph critiques traditional advice on business selection, presenting his own investment approach developed under legendary mentors. He highlights his focus on growth in free cash flow and underscores the significance of management incentives in driving long-term shareholder value, using Meta as a case study to illustrate market volatility versus stability.
AI Snips
Chapters
Transcript
Episode notes
Certainty in Quality Investing
- Certainty and predictability are crucial for quality investing, not just competence.
- Unpredictable cash flows make valuation and long-term compounding difficult.
Meta's Volatility
- Meta's stock plummeted due to unpredictable events like increased privacy regulations and metaverse investments.
- These events highlighted the difficulty of predicting volatile businesses, even for analysts.
Roper's Predictability
- Roper Technologies, a software business, is predictable due to its niche market focus and recurring revenue streams.
- Its consistent performance through various economic conditions exemplifies predictability and compounding potential.