Todd Wenning: Flyover Stocks: Moats, Managements, Long Games, Seashell Hunting, and More
Nov 20, 2023
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Professional investor Todd Wenning discusses economic moats, management strategies, and crisis investing. He shares insights on how seashell hunting can teach us about investing and how crisis can strengthen companies. The conversation covers long-term investing, resilient businesses, and the value of helping others make sound financial decisions.
Engage in efforts where others won't, similar to seashell hunting, to uncover valuable investing opportunities.
Resilient businesses survive crises with robust moats, competent management, and stakeholder relationships, emerging stronger post-crisis.
Prioritize enduring value creation, stakeholder relationships, and intrinsic motivation for sustained success amidst market volatility.
Deep dives
Lessons from Seashell Hunting: Finding Opportunities in Remote & Challenging Environments
Venturing to remote parts of the Outer Banks after a storm, the experience of seashell hunting parallels investing by emphasizing the need to engage in efforts where others won't. Discovering rare seashells in uninhabited areas highlights the importance of diligence and venturing into challenging territories to uncover valuable treasures, drawing a powerful comparison to the world of investing.
Investing Resilience during Crisis: Nurturing Businesses for Long-Term Growth
Discussing lessons from Muir Woods' sequoia trees, resilient businesses survive and thrive during crises due to factors like robust moats, competent management, sustainable financial strength, and stable stakeholder relationships. Detailed examples of companies like NVR and Chipotle showcase how strategic resilience and adaptability during tough times enable firms to emerge stronger post-crisis, underscoring the significance of long-term business sustainability.
Strategic Long-Term Investing: Embracing Uncomfortable Moments for Value Creation
Focusing on long-term investment philosophy, the discussion delves into the importance of enduring temporary discomfort in capitalizing on value opportunities during periods of market turmoil. Emphasizing the need for investors and businesses to play a different game, centered on creating enduring customer relevance, building strong stakeholder relationships, and prioritizing intrinsic motivation drives success in the face of short-term volatility, resonating with the essence of sustainable strategic growth.
The Importance of Long-Term Thinking in Investment Strategies
Long-term investment strategies are discussed, emphasizing the significance of considering the longevity of a company's strategy and the management's tenure. The podcast highlights the challenges posed by short-term thinking prevalent in the US market, contrasting it with the long-term perspective valued in Europe and family-owned businesses. By focusing on long-term goals and evaluating corporate culture, investors can make informed decisions that align with sustained growth.
Position Sizing and Selling Strategies for Investors
The discussion delves into the intricacies of position sizing and selling strategies for investors. It emphasizes the gradual approach to buying and selling stocks, considering factors such as conviction in an investment idea, valuation opportunities, and risk management. By carefully managing position sizes, monitoring a manageable number of companies, and prioritizing quality over quantity, investors can build resilient portfolios and navigate market fluctuations effectively.
Todd Wenning is a professional investor and writer based in Cincinnati, Ohio. He's currently the author of the Flyover Stocks newsletter, which focuses on finding overlooked companies with economic moats that are led by thoughtful stewards of shareholder capital. Previously, Todd spent eight years on the buyside with Ensemble Capital and Johnson Investment Counsel, and three years on the sell-side with Morningstar where he led the firm's equity stewardship methodology and contributed to the company's book Why Moats Matter. Todd has written publicly about investing since 2006 when he joined The Motley Fool as a writer and financial editor.
https://www.flyoverstocks.com/
We have a wonderful discussion about moats, managements, and playing the long game in investing. Todd shares the inspiration behind his newsletter Flyover Stocks, and we touch on a number of topics, and ideas that he has written about over the years. One of the stories includes Todd’s wife, she is an avid seashell hunter. My wife and I have picked seashells on many occasions, so the story resonated with me. Todd explains what sea shell hunting can teach us about investing. Stay tuned until the end, where we take on the topic of crisis. My guest explains how crisis can make companies better, and stronger, and forge future winners. It’s a wide-ranging, thoughtful discussion where more beginner and advanced investing enthusiasts will find something worth discovering. Todd was a joy to talk to, we had a lovely hour long recording. I highly recommend exploring his newsletter, and his writing.
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