The Business Brew

Major Topics: Housing and Macro Logan Mohtashami is a housing data analyst, financial writer, and blogger covering the U.S. economy specializing in the housing market. Mohtashami’s work is frequently quoted in BankRate.com and Bloomberg financial. Logan is also a Lead Analyst for HousingWire. Mohtashami has been an invited speaker at the Americatlyst, California Association Of Realtors and the National Association Of Women In Real Estate Business, and other economic conferences. He is a recurring guest on Bloomberg Financial, where he discusses the health of the housing market. Logan Mohtashami, now retired, was a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. In this episode Logan stops by to describe his data driven process, why the US housing market is "unhealthy," why demographics are a tailwind through 2024, and how Logan pulled off a one of a kind trading year in 2020.  Logan brings the heat with this one.  Hope y'all enjoy! This episode is brought you by Koyfin, one of the fastest-growing platforms for financial data and analytics to research stocks and understand market trends. Check out Koyfin.com to see what a Bloomberg-lite, with tons of high-quality fundamental data and a powerful graph engine looks like.  

Major Topics: 80s Culture and Film Directing Seth Porges stops by The Business Brew to discuss directing Class Action Park, a beautiful piece of art.  The New Jersey and New York fans may appreciate this episode *a bit* more than the rest, but rest assured this is a fun conversation.  Check out Class Action Park on HBO Max before listening if you are concerned with spoilers. Why does this episode work on The Brew?  Well, for one, because it's dope.  But also, Seth bootstrapped production for the documentary.  Furthermore, Action Park is one of the most fascinating businesses ever.  A combo of freedom, negligence, and a darker side that led to some people dying.   We hope you enjoy the episode.  You can follow Seth at @sethporges on Twitter.  Bill can be reached at @BillBrewsterTBB on Twitter. This episode is brought you by Koyfin, one of the fastest-growing platforms for financial data and analytics to research stocks and understand market trends. Check out Koyfin.com to see what a Bloomberg-lite, with tons of high-quality fundamental data and a powerful graph engine looks like.  

Major Topics: Special Situations, Small Cap Investing, Unique Thinking Thomas Braziel is the Founder and CIO at 507 Capital.  The son of bankruptcy lawyers, Thomas was destined to become an expert in distressed investing.  He loves looking at weird and esoteric trades and investments. This episode covers behavioral investing, special situations investing, how illiquidity breeds good behavior, and Thomas' big win on his Mt. Gox claims.  Thomas has a unique mind and introduces some ideas that are not en vogue in 2021.  We hope Thomas' thoughts help expand the definition of an investment in some people's minds. This episode is brought you by Koyfin, one of the fastest-growing platforms for financial data and analytics to research stocks and understand market trends. Check out Koyfin.com to see what a Bloomberg-lite, with tons of high-quality fundamental data and a powerful graph engine looks like.  

 Major Topics: Process and Decision Making Improvement Jake Taylor is CEO of Farnam Street Investments, Co-Host of Value After Hours, Host of the 5GQ podcast, author of The Rebel Allocator, and Founder of journalytic.com. Jake and Bill met at Berkshire and immediately became friends. While they invest differently, they have more in common than Value After Hours fans may think. On Value After Hours Jake is known for his "veggie" segments, which are segments that tie investing ideas to other worldy concepts. He is very passionate about making the best decisions possible and drawing from a wide range of subjects. We hope this episode highlights how Jake thinks about the world and spreads better decision making. Topics covered include: -Base rates underpinning underwriting -Bayesian updating -Tracking what happens vs what you thought would happen - Few stocks driving the majority of return.  See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 - W. Brian Arthur's theory of Returns to Scale. See https://hbr.org/1996/07/increasing-returns-and-the-new-world-of-business - And much more We hope you enjoy this conversation!   This episode is brought you by Koyfin, one of the fastest-growing platforms for financial data and analytics to research stocks and understand market trends. Check out Koyfin.com to see what a Bloomberg-lite, with tons of high-quality fundamental data and a powerful graph engine looks like.

Major Topics: The Human Mind, Life, and Quant Investing  Wall Street legend, best selling author, Godfather of FinTwit, and Chief Meme Officer James P. O'Shaughnessy joins The Business Brew.  Jim is a one of a kind individual who took time out of his life to help Bill work through some real life issues earlier in the year.  They connected as individuals and Bill values Jim's friendship highly. This is a wide ranging conversation about finance, the human brain, and life.  Jim has so much knowledge and shares it freely.  Rather than summarize this conversation, we ask that you please give it the time and listen closely.  The Business Brew guarantees there are thoughts worth adopting in this conversation. This episode is brought you by Koyfin, one of the fastest-growing platforms for financial data and analytics to research stocks and understand market trends. Check out Koyfin.com to see what a Bloomberg-lite, with tons of high-quality fundamental data and a powerful graph engine looks like.    

New photo courtesy of Mike Ando.  Please see https://www.mikeando.com/ Thank you to all the fans, guests, and especially to Mathew Passy.  If you like the intro music you'll love this episode. We will be back soon.  Until then, thank you and take care! -Bill

Rick Van Nostostrand is a Partner and Senior Portfolio Manager at Cornerstone Investment Partners. Cornerstone is an investment boutique in Atlanta, Georgia.  The firm manages "mid $2Bn" across a number of value strategies.  They have a qualitative approach with a quantitative model that guides them.  See https://cornerstone-ip.com/.    Prior to Conerstone, Rick was a voting member of the investment committee at EARNEST Partners and served on the Fundamental Value product at Invesco Capital Management. Previously, he worked in management consulting where he served clients across industries at both McKinsey & Company and Accenture (the Anderson Consulting).  Rick earned an MBA with a concentration in Finance from Wharton (U Penn), and holds a Bachelor of Science in Computer Science Engineering from Southern Methodist University.    This conversation covers: ~2:30 - Rick's Background ~3:53 - His consulting career at Accenture and McKinsey ~7:11 - College businesses, one of which could have been quite successful if Amazon existed ~13:57 - The theory that in the real world prices and value are seldom aligned ~ 16:23 - Need to develop an investment process and Cornerstone's philosophy ~ 22:21 - What Cornerstone's model told them about Microsoft that the market missed ~ 24:08 - Looking for high quality companies building value over time ~ 26:21 - ESG discussion ~29:36 - Risk subsidies driving valuation ~32:31 - Indexes and how they impact investment results and the market ~37:00 - What happened to certain stocks after the 1999 bubble burst ~38:00 - Investing in the late 90s ~43:00 - Buying the dip may not work forever ~45:00 - Avoiding financials in 2009 ~50:50 - Real option theory in valuation ~54:05 - Where Wells Fargo erred in remediation ~ 57:19 - Why Citigroup was a palatable turnaround investment ~1:01:00 - The benefit of investing with a team ~ 1:05:00 - Avoiding groupthink as a team ~1:07:00 - How to have investment teams function well ~1:14:00 - Building teams to last and culture ~1:19:00 - Miscellaneous discussion

Jason Buck (@JasonMutiny on Twitter), Co Founder and CIO of Mutiny Funds, stopped by for the first in person interview on The Business Brew.  Mutiny is releasing the Cockroach Portfolio, a portfolio designed to survive any market conditions.  See https://mutinyfund.com/ for details.   In this episode Jason discusses his history as an entrepreneur, which took a hit in the Great Financial Crisis.  That event caused Jason to think about whether it was possible to hedge entrepreneurial risk.  After years of thought, the Cockroach Portfolio was born. The goal of the Cockroach Portfolio is to keep wealth in all market conditions.   This conversation goes all over the place.  We hope you enjoy.    ~4:05 - Trading VIX ~9:00 - Jason's history as a real estate entrepreneur ~10:00 - How often "black swans" occur ~16:50 - Jason describes thinking about hedging macro/entrepreneurial risk ~18:00 - Shannon's Demon - see also https://quant.stackexchange.com/questions/38473/intuitive-explanation-for-shannons-demon ~22:30 - How would Buffett behave if he were starting today? ~23:35 - The $SHIT ETF ~29:17 - What it's like to lose everything ~32:00 - Keeping wealth vs. making wealth ~37:50 - The Hypomanic's Edge ~41:00 - How Jason and Taylor "solved" the problem they wanted to solve ~48:07 - Be so good they can't ignore you ~49:20 - Selecting the right partners ~55:00 - Building the Cockroach Portfolio the right way ~1:04:00 - Playing better games than stock picking; compounding capital without tax ~1:09:00 - What lies do we tell ourselves? ~1:13:00 - Laying asymmetric bets ~1:17:00 - Mental health and whether substances risk mental health ~1:18:00 - General mental health discussion and habits to keep healthy ~1:29:00 - General podcast and Pirates Of Finance Discussion; see https://www.youtube.com/channel/UCsfk98XxbnjTCLkROQZ5zWg/featured ~1:37:00 - Back to Mutiny Fund and how it's structured ~1:40:00 - Avoiding big drawdowns        

Jason Wild is the founder and President of JWAM, an SEC-registered investment adviser with over $1.7 billion under management. Jason found investing during his last year of pharmacy school.  Taking Peter Lynch seriously, he invested every other paycheck in pharmaceutical ideas he thought were undervalued.  His theses were correct far more often than they weren't and he made himself almost a half million dollars in the market.  After proving his competence, he started a fund with a mere $80,000.  Today, that fund manages over $1.7Bn.     Jason's initial strategy focused on specialty pharmaceuticals.  His knowledge base enabled him to assess asset bases and M&A quickly (and correctly).  After pitching a company on an M&A opportunity, and getting nothing in return, Jason decided to take matters into his own hands.  He decided to purchase Arbor Pharmaceuticals for $2.5mm dollars and built the company via M&A. After 3 years, KKR bought a portion of Arbor; valuing the enterprise at $1.1Bn.     Today, Jason is Chairman and Interim CEO of TerrAscend Corporation, a cannabis company with multi state operations in the US.  His official Bio is as follows:   "Jason Wild is the founder and President of JWAM, an SEC-registered investment adviser with over $1.7 billion under management. After starting his first fund in 1998 with only $80,000 AUM, Jason achieved early success by leveraging his background as a pharmacist to find undervalued specialty pharmaceutical companies and by managing the firm’s investments for long-term growth. After building a strong track record as a stock picker, Jason expanded his investment universe and applied his experience and extensive healthcare network to private market opportunities. He has since established himself as a highly respected investor and sought-after partner for both public and private companies."   This was an awesome conversation to have.  Highlights are as follows:   ~1:00-6:00 - Early career highlights ~6:00- Finding cannabis as a potential investment opportunity ~9:50 - Applying the same learnings from pharmaceuticals to cannabis and getting control of TerrAscend ~13:50 - When the US cannabis thesis got derisked ~16:44 - Applying for licences in New Jersey and what that means ~18:50 - Buying Ilera ~23:30 - Discussion on incentives for East Coast regulators and how they may think about supply/demand balances ~26:30 - The strategy of density vs spreading out the retail footprint ~28:58 - Homegrown cannabis as an alternative ~31:00 - Federalization/interstate commerce and what that may do to the thesis.  ~34:49 - The social justice impact of legalization ~37:13 - Consistency in edibles and what is difficult about getting those products consistent ~44:00 - Whether the illicit market will keep its customers ~49:00 - What Jason is doing with Chris Webber to help minorities profit in the cannabis industry ~55:00 - Why issuing equity right now was the right choice for TerrAscend

Arnold Van Den Berg is one of the most unique investors alive today.  He is Jewish and was born in Amsterdam, Holland, in 1939.  As a toddler, he and his family were forced to hide in a small closet when the Nazis searched his street.  His mother was concerned that Arnold and his brother, then 5 years old, would not be able to keep quiet during the searches. Consequently, she arranged for Arnold and his brother to be smuggled out of Amsterdam.   While Arnold was successfully smuggled out of Amsterdam, his mother never received a phone call confirming his safety.  She grew worried and eventually set out to find a phone to confirm Arnold's safety.  Arnold's dad went with her.   On the way to the phone booth Arnold's mother and father duked into a store to avoid an air raid.  The store owner alerted the Nazis and both of Arnolds parents were sent to Auschwitz.  They both survived.     This episode is about investing.  But, it is more about life than anything.  BIll has been fortunate to get to know Arnold over this process.  They have talked on the phone for ~10 hours and will do so until Arnold tires of Bill!     Arnold is a testament to what humans can do.  He and his immediate family survived the most hellish conditions on Earth.  Yet, he holds no resentments.  In fact, he discusses his experiences as something he's almost grateful for because they enabled him to become the person he is now.     In conclusion, no detailed show notes on this one.  As a listener, you are encouraged to listen to this entire interview and determine what is helpful for you.  Arnold is someone to celebrate and his story should never be forgotten.  We hope we add something important to your Memorial Day with this episode.     Thank you to all that serve and help ensure the freedomes we enjoy today.  Best wishes.  Much love.