The Business Brew

Michael Batnick, author of The Irrelevant Investor blog (https://theirrelevantinvestor.com/) and Big Mistakes: The Best Investors and Their Worst Investments (https://www.amazon.com/Big-Mistakes-Investors-Investments-Bloomberg/dp/1119366550) and Co Host of The Compound and Friends (https://podcasts.apple.com/us/podcast/the-compound-and-friends/id1456467014 for Apple and https://open.spotify.com/show/5VKsKPZUtwVylxslLie36k on Spotify) stops by The Business Brew for a quick chat. In this episode Bill and Michael discuss Michael's book, his early days breaking into finance, his early investing style, and how he looks at the world now. They also touch on some personal chit chat at the end. Please note this episode was recorded before Bill's episode with Tom Gayner. Bill talks about Tom searching for ideas on the 52 Week High list. That part of the conversation is somewhat inaccurate and you should listen to Tom's episode for clarification. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Detailed Show Notes 4:50 - Mark Twain as an investor 7:00 Mike's background and building an online presence 13:00 - How Mike got through a bad first job 18:00 - Dealing with emotions while investing 19:00 - How Future Proof started 21:00 - How Mike approaches The Compound and Friends 24:30 - Helping Clients 28:00 - Why people should consider buying stocks that have gone up 35:00 - Stock chit chat 37:00 - Writing Big Mistakes

Dan Zwirn, CEO and CIO of Arena Investors, stops by The Business Brew to discuss his investing strategy.  Arena Investors, LP is a registered investment advisor that originates investments (generally below $50 million) with borrowers and other counterparties who need access to financing and are otherwise not able to access conventional sources.  They have complete mandate flexibility across industry, product, and geography.    In Dan's words, "The real beauty of our approach, to me, is that there’s no ceiling on the creativity we can use to shape alignment for our clients, our partners and ourselves. If someone needs capital and there’s any way to do it that makes sense for all parties, we will find that way." Bill enjoyed this conversation very much and hopes you will as well.    Arena's Website: https://www.arenaco.com Dan's Investor Letter: https://www.arenaco.com/wp-content/uploads/2023/03/Arena_Investors_Letter_YE_2022.pdf    Dan's Official Bio: https://www.arenaco.com/team/daniel-zwirn/ This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Detailed Show Notes   What Arena does - 3:30  How big money invests at times - 6:30  Process oriented vs. security selection - 9:30  Financial Products vs. Investment Products - 13:10  Why Arena has invested in servicing - 19:30  The incentives to not see what is going on - 22:10  Where are we in a credit/business/fiscal cycle - 25:00  How Arena thinks about opportunity - 32:30  How Arena thinks about LTVs - 39:05  "We are at a casino and there has never been more gamblers" - 44:00  Are defaults bad? - 48:00  Does diversification solve all problems? 52:30  A CLO discussion - 56:50  What is going on with the job market - 1:03:30

Mike and Eli, hosts of Chasing Scratch: A Golf Podcast, join The Business Brew to discuss their podcast, how they monetize podcasts, what they were trying to accomplish when they started podcasting, and, yes, golf. Bill is a huge fan of the podcast they have put together.  Check it out on your favorite podcast player! Apple: https://podcasts.apple.com/us/podcast/chasing-scratch-a-golf-podcast/id1281285953 Spotify:  https://open.spotify.com/show/2W77oe7Nw7G8RzKkhsMi5E This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Tom Gayner stops by The Business Brew to discuss a number of things. You can see the detailed show notes for specifics, below the stratosphere.io sponsor copy. In summation, Bill has wanted to interview Tom for a long time but didn’t know how to make the interview unique. We think this interview covers some topics Tom has not discussed elsewhere. Please consider attending Markel’s annual meeting. On Wednesday, May 17th, from 9-10:30 the good folks at Robotti and Co. are hosting an investor panel. There will be 8-12 “best ideas” presented. The Markel annual meeting will follow that event. Food, music, and beer will follow the Markel annual meeting. We hope you enjoy this podcast episode. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Thank you to the team at thepodcastconsultant.com for producing the show. Detailed Show Notes - 5:00 – The goal of the Markel annual event 7:30 – Tom’s background 9:35 – Blue capital and orange capital 17:05 – Creating dealflow and how long that takes 20:10 – Learning how to delegate 24:55 – What happened with the ILS transactions 33:20 – Searching New Highs and New Lows 38:40 – How investing at Markel does or does not impact Tom’s investing style 34:20 – The intertwining of Berkshire, Markel, and The Davis Funds 43:50 – The importance of relationships 48:40 – The Big Lebowski 49:10 – What traveling to India has taught Tom 56:25 – Decisions in March 2020 and how being at Markel impacted Tom 1:02:20 – How was the transition from Co-CEO to CEO 1:05:40 – How to be a deserving spouse Book Mention: The Way We Live Now https://www.amazon.com/Way-Live-Now-Penguin-Classics/dp/0140433929/ref=asc_df_0140433929/?tag=hyprod-20&linkCode=df0&hvadid=475771750252&hvpos=&hvnetw=g&hvrand=16689022937612321338&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9011844&hvtargid=pla-469518675534&psc=1

Adam Wyden, founder of ADW Capital, stops by The Business Brew to share his investing philosophy, discuss some ideas, and talk about lessons learned.  ADW is a concentrated, long biased investment partnership founded in 2010.  In this episode Adam cautions against idol worship, talks about how he monitors positions and companies, shares his thoughts on management character, and much more.  Bill's favorite line from this episode is "Invest with people that have more to lose than you do." We hope you enjoy the show. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Thank you to the team at thepodcastconsultant.com for producing the show. Detailed Show Notes - 8:00 – Meeting Joel Greenblatt 14:45 – Lessons from Fiat 22:30 – How Ferrari could grow faster 30:30 – Adam’s background as an investor 40:40 – Pivoting to better businesses 43:00 – Being proud of admitting mistakes quickly 44:30 – Takeaways from 2022 48:00 – Where to hunt 51:50 – What is the etymology of a return? 54:00 – Monitoring a position over time 59:30 – Watch out for idol worship 1:10:00 – The biggest risk is (a) investing with sociopaths and (b) becoming one 1:18:15 – Further discussion about APi Group 1:30:30 – The comfort of owning assets with honorable managers

Arnaud Cosserat, CEO of Comgest, and Rick Mercado, PM at Comgest stop by The Business Brew to discuss quality growth investing.  Comgest is an independent, international asset management group, which since its creation in 1985, has pursued a long-term ‘Quality Growth’ and responsible investment style. Arnaud is a long-standing Analyst and Portfolio Manager specialising in European equities. He started his career in 1989 as an Analyst at Banque Paribas, before joining Société de Bourse Oddo and then Generali as a Portfolio Manager. He holds a Master of Science degree from the ESSEC business school (France) and is a member of the French Society of Financial Analysts (SFAF, Société Française des Analystes Financiers). Before joining Comgest, Rick worked in London as a Portfolio Manager responsible for a North American equities fund with USS Investment Management and prior to that, as a Global Equities Portfolio Manager with F&C Investments. From 2001-2008 he worked in Australia, with Capital Partners as an Investment Analyst and with AMP Capital Investors as an Investment Strategist. He holds a Bachelor of Science in Mathematics and a Bachelor of Commerce in Finance from the University of New South Wales. He is also a CFA® charterholder. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Big shoutout to @mathewpassy and the team at The Podcast Consultant. Detailed Show Notes: 4:10 - Comgest's philosophy and focus on culture 8:10 - Fighting the ABCs (arrogance, bureaucracy, and complacency) of decay 12:05 - How to appraise culture Paper cited https://hbr.org/1996/11/what-holds-the-modern-company-together 18:48 - Handicapping quality among high quality companies 24:05 - How does Comgest consider valuation risk of the portfolio? 33:35 - Comgest's 80/20 rule and how they hold companies with higher valuations 39:20 - Why recessions are great from an investment perspective 46:20 - What inflation might do to quality companies 53:30 - When to exit an investment (and how to stay in) 1:00:00 - How macro events impact Comgest's analysis

Randy Baron, lead Portfolio Manager for Pinnacle Associates Ltd's various international products, joins The Business Brew to discuss his investing philosophy.  Randy is best known for international value investing and for publicly discussing Amyris.  Amyris is an unprofitable company with a CEO that has a controversial reputation.  But, it is a very interesting company backed by some very real investors. Bill and Randy have spoken a few times over the past 2 years and Bill likes how Randy looks at the world.  Bill was also curious about Amyris and how Randy's public support of the company has or has not influenced Randy's analysis.  Randy is open and transparent on this podcast and it is a very entertaining, and informative, listen.  We hope you enjoy. Randy's official bio can be found at https://www.pinnacle-associates.com/team/randolph-baron This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Detailed Show Notes: 4:15 - Intro 10:15 - Long term investing and international valuations 15:10 - Why US companies are listing in the UK 19:25 - What is Wandisco 22:25 - Randy’s idea of where returns will come from 23:50 - A discussion on Amyris 36:23 - A socially responsible investing tangent 38:23 - Back to Amyris 43:43 - Why every CEO should promote their stock 45:23 - When the price of a stock price matters 49:33 - Why explaining why you own something is important to investors 57:23 - How to act 1:05:20 - Renalytix; potentially solving a big problem 1:09:20 - Sizing early stage bets 1:11:30 - Looking to EM for cheap, good ideas

Whit Clay stops by The Business Brew to discuss his role in the financial ecosystem.  Whit sits at the intersection of investor relations and public relations.  He works with a wide variety of companies.  We hope you enjoy the conversation! Whit Clay is a Co-Chief Executive Officer with Sloane & Company and has been with the firm for more than 21 years. Beyond day-to-day leadership and management of the firm, he leads its financial and crisis communications practice with a focus across multiple sectors and clients. Whit has worked on complex transactions, mergers and acquisitions, restructurings, litigation and numerous other special situations. He provides strategic counsel to the C-suite and taps his deep relationships with the media, business and financial community to achieve successful outcomes. Clients of note across a range of industries include: Archer Aviation, Bloom Energy, Centrus Energy, Fortis, Francisco Partners, IMAX, Liberty Media, NOVA Infrastructure, Paladin Capital and Stagwell, Inc. among others. Whit joined Sloane & Company in 1999 after more than three years working with Edelman Financial Worldwide, the financial communications and investor relations division of Edelman Public Relations Worldwide. Prior to that, he worked in Washington, DC for Capitoline, the U.S. Senate Sergeant-at-Arms and the American Trucking Associations. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Detailed Show Notes (Time Stamps) 2:45  - What is Sloane & Company? 4:04 – How much does narrative matter over the intermediate term? 6:30 – How management teams can create value through messaging 13:15 – How 5 year projections can cause value destruction 20:00 – What is Whit’s role in the financial ecosystem 22:20 – Whit’s background 29:08 – Whit takes some career risk in the late 90s 37:30 – What happened to Sloan’s client mix in 07-08 40:18 – Do CEOs know when bubbles are occurring or do they get just as caught up as the rest of us?  And, what traits make CEOs good at navigating bubbles? 50:30 – Which clients are good matches for Slone & Company 56:00 – How has social media influenced corporate communications? 1:06:00 – How has being exposed to CEOs rubbed off on Whit as a leader? 1:10:00 – Sloane & Company’s values

Will Thomson stops by The Business Brew to discuss his approach to real asset investing.  Will focuses on companies that happen to produce commodities and/or real assets.  That said, he is looking to exploit company/project specific opportunities rather than making commodity calls.  In this episode, he describes hi s process and explains how an investor could use publicly disclosed information to see a company's business plan (See: a 4301 document in Canada).  Will is the Founder and Managing Partner of Massif Capital, LLC. He has experience in private equity and credit/political risk insurance, in addition to having served as a strategic and economic adviser to NATO/ISAF in Afghanistan. Before starting Massif Capital, Will worked in the New York office of Chaucer, a Lloyd’s of London insurance syndicate, serving as the co-portfolio manager for a $750 million portfolio of credit and political risk insurance policies. He is a Graduate of Trinity College and holds a Masters in Government from Harvard University. This episode is sponsored by Stratosphere.io. Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc. A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy. Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial. Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Detailed Show Notes: 5:00 - Will's take on oil 8:00 - What is the Lassonde Curve  11:38 - How a filing can help an investor underwrite mining companies. 14:00 - How Will thinks of comparing his DCF to market prices  15:00 - Will discusses how he thinks about investing   19:50 - How will thinks about placing commodity bets on equities 22:00 - The risk reward of majors vs minors in mining 27:50 - "Are you buying well or are you buying good things?" 31:00 - A discussion about Lithium Americas 36:10 - Don't fall in love with the assets 40:33 - The difference between processed commodities and depleting commodities and what it means for margins 45:14 - Some Inflation Reduction Act discussion 51:00 - Sometimes change creates opportunities in the things that don't change 1:05:00 - Chesterson's fence and then discussion

Thomas Ricketts, CFA, joins the pod to discuss his investment philosophy.  This episode focuses on an investment style that, according to Bill's perception, seeks to identify change and innovation before the market identifies it.  Bill was initially a little skeptical of doing an "innovation episode" given how the term has been used in the financial community.  However, after diligencing Tom, Bill felt comfortable having Tom on the pod.  This conversation adds value to The Business Brew library.  Thank you to Tom for joining the show! This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Tom's Bio Thomas Ricketts, CFA, founder of Evolutionary Tree Capital Management (see https://evolutionarytree.com), serves as Chief Investment Officer, Portfolio Manager, and Research Analyst. Over his 27-year investment career, he developed significant expertise in portfolio management, investment research, and executive management. Prior to founding Evolutionary Tree, Mr. Ricketts was a Sr. Portfolio Manager on Sands Capital’s flagship Select Growth strategy, a $20+ billion concentrated strategy of high-quality, sustainable growth businesses. Mr. Ricketts was one of the longest-tenured investment professionals at Sands Capital. Over the years, he contributed to building and leading the research team and attracting and retaining a broad client base of institutional and high-net-worth clients. Mr. Ricketts joined Sands Capital in 1994 as the Assistant to the President. He worked closely with founder Frank Sands, Sr. during the startup phase and early years of the firm, helping to grow the firm from less than $100 million in assets under management to approximately $40 billion in assets 22 years later. In 2008, Mr. Ricketts assumed the role of Sr. Portfolio Manager on the Sands US Large-Cap Growth strategy, working as a Co-PM to oversee the $20 billion strategy, and was a decision maker on that strategy for eight years.  Detailed Show Notes The paper Tom mentions can be found here. 5:00 - Background 13:00 - Valuation as part of the process 18:00 - 2022's biotech opportunity 20:50 - Maintenance vs. growth spend 29:20 - nCino as an example 34:00 - Why Salesforce has an incentive not to push too hard with Force.com 39:00 - Ingredients of a successful investment 52:20 - Avoiding hype 59:30 - Risk Reducers 1:13:50 - Why to exit before maturity 1:18:52 - Lessons from Frank Sands (bet best ideas, quality will out itself eventually, invest in solutions, think long term, look for long term growth in earnings power)