The Business Brew

Keith Smith, a guest with over 20 years of business valuation experience, discusses unique ideas and topics such as BDCs, auto dealers, recurring service revenue, and consolidation in car dealerships. The podcast also covers the challenges faced by banks, the importance of understanding recourse in commercial real estate investing, success in automotive dealerships in Japan and Korea, managing dilution and accounting challenges, and strategies for improving ROI through acquisitions.

Ryan O'Connor from Crossroads Capital discusses Nintendo, inflection investing, Japan's corporate governance reforms, the complexity of financial reporting, and the potential partnership between Nintendo and Comcast. They also explore portfolio management challenges, the state of small and micro-cap companies, the importance of quality and long-term thinking in investing, and analyze the Google Adtech trial and its implications on the market.

This isn't a typical episode, but it's an important one.  We hope it leads to some important discussions.

Peter Mantas, Investor at Logos LP, discusses the potential opportunity in the life sciences industry. Topics include the M&A focus, return differences with and without goodwill, efficient data analysis using Delupa, evaluating small and micro-cap companies, and the current state of the market and liquidity. They also explore the potential of cell therapy and the challenges in developing and manufacturing pharmaceutical products. The podcast concludes with a discussion on antitrust regulations, monkey research, investing in life sciences, and balancing high and low expected value stocks.

Andrew Walker, author of Yet Another Value Blog, host of Yet Another Value Podcast, stops by The Business Brew to chat. Andrew hosts one of the best financial podcasts out there, and is a great writer. We both hope you enjoy this conversation! Sponsor Info: ⁠⁠Daloopa ⁠⁠is founded by a former hedge fund analyst to bring simplicity into the investment process. ⁠⁠Daloopa ⁠⁠offers an AI driven single source for all company reported data, and allows for investment teams to ake the most informed decisions in the shortest amount of time. ⁠⁠Daloopa ⁠⁠scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. ⁠⁠Daloopa ⁠⁠captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. ⁠⁠Daloopa’s ⁠⁠Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date. Visit ⁠⁠⁠Daloopa.com/BusinessBrew⁠⁠⁠ to create a free account and learn more about how ⁠⁠Daloopa ⁠⁠can help increase your team’s speed to differentiated insight.   Detailed Show Notes 6:00 - Microsoft Thought Exercise 14:00 - Quality vs. Price 22:00 - Delek 31:00 - Getting ideas from others 34:30 - What does the telco lead situation potentially mean for cable 39:00 - The potential for any investment to be a zero 43:00 - The bank thesis of May-ish 46:30 - Position sizing 49:30 - What's your edge? 52:00 - Activision and Microsoft 1:01:00 - Media overview 1:10:00 - Holdcos as an investment 1:18:00 - $RIDEQ

Charles Frischer and Asheef Lalani stop by The Business Brew to discuss why they like Fairfax as an investment. Quick reminder to do your own work!!! Asheef Lalani as an independent director to the board of Sailfish Royalty Corp. Mr. Lalani graduated from the University of Waterloo with a Bachelor of Mathematics and Masters of Accounting, earned the CA/CPA designation in 2002 and is a CFA charterholder since 2003. Asheef first started his career with PricewaterhouseCoopers in 1998 and went on to become a portfolio manager at UBS Securities. Currently, Mr. Lalani is the Chief Investment Officer at Berczy Park Capital – a private family office in Toronto, Canada. Charles Frischer is General Partner of LFF Partners, a family office based in Seattle. Mr. Frischer was a multi-family loan underwriter and originator at Capri Capital for 10 years. As a Principal at Zephyr for 4 years, he was responsible for the asset management of more than 5,000 multi-family units and all related financings of the portfolio. Frischer sits on the Board of Kingsway Financial and Altisource Asset Management. He attended his first Berkshire annual meeting in 1998, his first Market annual meeting in 1999 and his first Fairfax annual meeting in 2010. He holds an B.A. in Government from the College of Arts and Sciences from Cornell University.   Sponsor Info: ⁠⁠Daloopa ⁠⁠is founded by a former hedge fund analyst to bring simplicity into the investment process. ⁠⁠Daloopa ⁠⁠offers an AI driven single source for all company reported data, and allows for investment teams to ake the most informed decisions in the shortest amount of time. ⁠⁠Daloopa ⁠⁠scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. ⁠⁠Daloopa ⁠⁠captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. ⁠⁠Daloopa’s ⁠⁠Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date. Visit ⁠⁠⁠Daloopa.com/BusinessBrew⁠⁠⁠ to create a free account and learn more about how ⁠⁠Daloopa ⁠⁠can help increase your team’s speed to differentiated insight.   Detailed Show Notes 4:24 - Backgrounds 9:01 - Fairfax gets interesting in Asheef's mind 11:43 - Pushback to the thesis 13:00 - Does Fairfax underwrite well? 17:00 - Why insurance companies shouldn't under reserve 25:00 - How good is Fairfax at investing in equities? 30:00 - The potential upside India brings to Fairfax 34:20 - Fairfax India background 42:55 - What people might not like about Fairfax India 45:40 - Fairfax's advantages 56:40 - What is the catalyst here? 62:00 - Does this pitch even need a catalyst? 64:00 - What does a bad outcome look like?

Arvind Sanger stops by The Business Brew to discuss his views on the world's sustainable energy transition. Mr. Sanger has a ton of experience and is a wealth of knowledge. He is the founder of Geosphere Capital, a global long-short fund manager currently investing in natural resources, new energy and Indian equities. Prior to that, between 2002 and 2007, Mr. Sanger was a Portfolio Manager at SAC Capital (his portfolio grew very quickly), running one of the largest equity portfolios and managing a global team based in New York and Singapore. Prior to his tenure at SAC, Mr. Sanger had a 15-year career as a top-ranked sell-side oil services & equipment analyst at a number of firms, including Deutsche Bank, DLJ and Kidder Peabody among others. Mr. Sanger graduated from the Indian Institute of Technology, Bombay, with a B.Tech in 1984 and received his MBA from Tulane University in 1987. Mr. Sanger is on the board of the Alexander Hamilton Society, Pratham USA and Pratham Educational Foundation in India. Sponsor Info: ⁠⁠Daloopa ⁠⁠is founded by a former hedge fund analyst to bring simplicity into the investment process. ⁠⁠Daloopa ⁠⁠offers an AI driven single source for all company reported data, and allows for investment teams to ake the most informed decisions in the shortest amount of time. ⁠⁠Daloopa ⁠⁠scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. ⁠⁠Daloopa ⁠⁠captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. ⁠⁠Daloopa’s ⁠⁠Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date. Visit ⁠⁠⁠Daloopa.com/BusinessBrew⁠⁠⁠ to create a free account and learn more about how ⁠⁠Daloopa ⁠⁠can help increase your team’s speed to differentiated insight.   Detailed Show Notes forthcoming.

Derek Pilecki stops by The Business Brew to discuss Financials.  Derek is a Financials specialist with a track record that speaks for itself.  See https://gatorcapital.com/ for more information.  Derek currently manages a long/short financials strategy, long-only financials strategy, and various other individual portfolios. He has managed a private fund for 11 years. He also launched one mutual fund and took over management of another mutual fund. From 2002 through 2008, Derek was a member of the Goldman Sachs Asset Management (GSAM) Growth Equity Team (Co-Chair of the Investment Committee for the Growth Team and a Portfolio Manager). Prior to GSAM, Derek was an Analyst at Clover Capital Management in Rochester, NY and Burridge Growth Partners in Chicago, IL. He covered the Financials sector at both firms. Before entering graduate school, Derek worked at Fannie Mae providing interest rate risk analysis for the company’s mortgage investment portfolio. Derek holds an MBA with honors in Finance and Accounting from the University of Chicago and a BA in Economics from Duke University. He is also a CFA® charterholder. Sponsor Info: ⁠⁠Daloopa ⁠⁠is founded by a former hedge fund analyst to bring simplicity into the investment process. ⁠⁠Daloopa ⁠⁠offers an AI driven single source for all company reported data, and allows for investment teams to ake the most informed decisions in the shortest amount of time. ⁠⁠Daloopa ⁠⁠scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. ⁠⁠Daloopa ⁠⁠captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. ⁠⁠Daloopa’s ⁠⁠Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date. Visit ⁠⁠⁠Daloopa.com/BusinessBrew⁠⁠⁠ to create a free account and learn more about how ⁠⁠Daloopa ⁠⁠can help increase your team’s speed to differentiated insight.   Detailed Show Notes: 3:38 – Derek’s background 6:54: - How Derek defines Financials 7:12 – Thoughts about Silicon Valley Bank 13:08 – Was it rational for regulators to ignore mark to market losses? 21:03 – What is going on with office and how big of a deal is this going to be? 25:08 – Is there an opportunity in regional banks? 29:45 – Mortgage REIT preferreds 33:15 – How much of a Financials analyst’s job is focusing on the consumer and macro? 36:35 – A discussion about First Republic’s failure 41:45 – Thinking about constructing a long/short portfolio within a sector 44:45 – Why Genworth, why now? 50:55 – Puerto Rican banks and the potential for regional oligopolies 54:10 – How building a business can impact investment outcomes 57:30 – Why does Derek run a mutual fund today? 1:05:10 – How to think about Banking as a Service and have traditional banks given up too much contact with the customer? 1:09:35 – Outlook for alt managers

ValueStockGeek (“VSG”) stops by The Business Brew to discuss his evolution as an investor.  VSG can be found on Twitter at @valuestockgeek, his portfolio can be found at https://portfoliocharts.com/portfolio/weird-portfolio/, and his blog is at https://www.securityanalysis.org/   We hope you enjoy the conversation. The Business Brew will be off for a few weeks after this episode. We shall return. Sponsor Info: ⁠⁠Daloopa ⁠⁠is founded by a former hedge fund analyst to bring simplicity into the investment process. ⁠⁠Daloopa ⁠⁠offers an AI driven single source for all company reported data, and allows for investment teams to make the most informed decisions in the shortest amount of time. ⁠⁠Daloopa ⁠⁠scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. ⁠⁠Daloopa ⁠⁠captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. ⁠⁠Daloopa’s ⁠⁠Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date. Visit ⁠⁠⁠Daloopa.com/BusinessBrew⁠⁠⁠ to create a free account and learn more about how ⁠⁠Daloopa ⁠⁠can help increase your team’s speed to differentiated insight.   Detailed Show Notes 4:40 – VSG’s Background 12:00 – Is value a macro bet? 17:00 – Are computers better suited to exploit the value factor than humans? 24:30 – Thoughts on dividends and whether they mitigate some bad management incentives 30:00 – Are quants bound to win and will computers take over the world? 32:22 – What VSG’s goals are for his substack 40:00 – The realization that “high multiple” doesn’t necessarily mean overpriced 43:45 – A potential blindspot that “value” might create 47:00 – Asset allocation discussion 54:00 – How Bill and VSG got into investing and some thoughts on trading 1:00:00 – The types of companies VSG owns 1:09:00 – Shareholder base characteristics

Ian Bezek stops by The Business Brew to discuss his thesis on why emerging markets, specifically Colombia and Mexico, might be extraordinary value today.  Ian is best known for his investment writing, which supports his day to day life.  His primary focus is Latin America. So much so that he moved from New York to Guatemala. He now resides in Colombia, which gives him unique perspective on the political landscape in that country.   Mentioned in the episode: John Hempton on “averaging down” - http://brontecapital.blogspot.com/2017/01/when-do-you-average-down.html Ian’s Twitter account - @irbezek Ian’s Seeking Alpha Page - https://seekingalpha.com/author/ian-bezek Sponsor Info: ⁠Daloopa ⁠is founded by a former hedge fund analyst to bring simplicity into the investment process. ⁠Daloopa ⁠offers an AI driven single source for all company reported data, and allows for investment teams to make the most informed decisions in the shortest amount of time. ⁠Daloopa ⁠scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. ⁠Daloopa ⁠captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. ⁠Daloopa’s ⁠Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date. Visit ⁠⁠Daloopa.com/BusinessBrew⁠⁠ to create a free account and learn more about how ⁠Daloopa ⁠can help increase your team’s speed to differentiated insight.   Detailed Show Notes 4:40 – Ian’s background 5:23 – Why Ian moved to South America (specifically Guatemala) 11:30 – Are emerging markets inherently lower quality than the US? 13:40 – Why Colombia, why now? 25:40 – How Ian is thinking about specific companies in Colombia 30:30 – What is the Colombian banking market structure? 36:50 – Memories of March 2020 40:20 – Why Ian prefers the airports to the rest of aerospace 46:50 – Thoughts about Mexico as a market 51:50 – Home country bias 58:05 – What Ian’s writing enables for his investments 1:05:50 – In many ways Latin America might be what the US was after WW2 1:10:35 – More discussion on Zoom vs. Qurate 1:16:20 – How Ian and Bill have evolved as investors and then chit chat