The Intrinsic Value Podcast - The Investor’s Podcast Network
MI380: Hidden Compounders: The Best Stocks Hiding In Plain Sight w/ Shawn O’Malley
Dec 2, 2024
Discover the intriguing world of hidden compounders, where unglamorous businesses deliver robust returns. Learn what sets these lesser-known companies apart and why they often boast invisible moats. Shawn O'Malley reveals how Peter Lynch champions boring firms and why intangible assets can be more valuable than physical ones. Delve into strategies for identifying these gems and explore the Lindy effect through the lens of long-term investing, all while uncovering the impressive success stories of companies like Old Dominion and Technion.
54:09
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Quick takeaways
- Hidden compounders are often unglamorous companies with impressive financial performance that can provide attractive long-term investment opportunities.
- Peter Lynch advocates for investing in boring businesses, as individual investors can exploit overlooked opportunities in mundane sectors.
Deep dives
Understanding Hidden Compounders
Hidden compounders refer to companies that have demonstrated exceptional returns over time but remain largely unknown to most investors. These firms often operate in unexciting sectors such as waste management, trucking, or manufacturing, making their business models unglamorous despite their impressive financial performance. Unlike the tech giants that dominate headlines, these companies have proven records of profitability and growth, providing substantial wealth generation for shareholders. Their low profile often allows them to be undervalued, creating opportunities for savvy investors to acquire shares at attractive prices.
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