The Business Brew

Henry Reardon, aka @integrity4mkts on Twitter, joins the podcast to discuss his investment philosophy. The conversation starts by discussing his Carvana short thesis then goes into his general investing philosophy. The conversation is a bit shorter than normal but packs a punch. 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.

Jake Taylor stops by The Business Brew to discuss his new product Journalytic.  Journalytic is a software designed to help investors improve their process and decision making.  Clear thinking and decision making has been a passion of Jake’s for a very long time.  Now, he is releasing the culmination of years of hard work to us, the public, FOR FREE.  You can sign up at https://journalytic.com/. 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 4:30 – What is Journalytic 8:40 – What you need to get the most out of Journalytic 17:30 – Getting reps and calibrating 21:00 – How is Journalytic encrypted 26:00 – You can control process 29:00 – Why Jake wants feedback 38:30 – When you write you cannot rewrite what you were thinking 42:00 – Monitoring position sizing and whether it helps 46:30 – The End of The World is Just The Beginning Chit Chat

John McClain, CFA stops by The Business Brew for a discussion about credit. John serves as a portfolio manager for the Brandywine Global’s High Yield and Corporate Credit Strategies. In this episode John makes the case for why high yield credit is a good bet after a bad year, discusses how corporate finance departments are more professional now (vs pre GFC), talks about companies adding value by buying back debt, and much more.   Before joining Brandywine Global, John was a Senior Vice President - Credit at Standard Life Investments from 2010 to 2014. From 2007 to 2010, he was with Nationwide Mutual Insurance as a Management Associate in the Financial Leadership Rotation Program and then an Investment Analyst in Distressed Debt. John is a CFA charterholder and earned a Master of Business Administration from Carnegie Mellon University and has a Bachelor of Science in Business Economics from University of Kentucky (magna cum laude). BrandywineGlobal’s High Yield Fund has earned a 5 star rating from Morningstar. Morningstar gives the fund above average ratings for Process and People. In the words of Morningstar, “the strategy’s distinctive, value-oriented approach exploits price inefficiencies that often materialize across smaller high-yield issuers. It earns an Above Average Process rating…Comanagers Bill Zox and John McClain execute a disciplined value approach: They buy issues when their market prices are lower than the team's estimate of intrinsic business value and sell them when their initial thesis has played out or when there are better opportunities in the market.” 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. Stratosphere.io provides clean data for 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. NOTE: Investing carries the risk of loss. Brandywine Global’s past performance is not indicative of future results. Detailed Show Notes 5:32 – How to think about credit generally 7:18 – What is a bond shell? 8:13 – The case for active management with credit 11:55 – How liquidity creates a cost of capital advantage for some companies 13:00 – Why high yield is no longer “junk” 15:45 – Company finance departments are better run than they were pre GFC 20:00 - Borrowing against assets and how professional it has gotten 22:35 - What The Fed cares about 27:30 - How retiring debt can help EV 30:00 - Some of the best capital allocators are in high yield 33:55 - How companies can manage our deleveraging cycle 34:50 - Why high yield hasn’t had back to back down years 38:00 - How the improvement in energy has benefitted high yield 41:45 - How Brandywine manages the quality of portfolio companies. 45:00 - How 2020/2021’s tech darlings can take advantage of today’s debt markets 46:30 - John’s take on private credit 49:30 - How tech could hurt private credit returns 54:30 - Long CEOs/short politicians 58:30 - How Brandywine manages their liquidity while running a open end fund 1:01:17 - How ETF transparency can create opportunities 1:03:00 - What type of investor is right for high yield 1:11:00 - How transparency can hurt liquidity 1:15:00 - Illiquidity and what it’s doing to the market

Bob stops by The Business Brew to discuss his early career, what he has learned over his career, investing in cyclical businesses/industries, and his biggest investment "loser."  This conversation is filled with good lessons and we hope you enjoy. Robert Robotti is the President and Chief Investment Officer of Robotti & Company. Prior to forming Robotti & Company, Incorporated in 1983, Bob was a vice president and shareholder of Gabelli & Company, Inc. He worked in public accounting before coming to Wall Street and is currently an inactive CPA. Bob holds a BS from Bucknell University and an MBA in Accounting from Pace University. Some of Bob's areas of coverage include Special Situations, Energy Industry and Home Building. Bob is the principal of the managing member or general partner of several investment vehicles. Bob currently serves on the Board of Directors of a NYSE-listed real estate company, AMREP Corporation, located in Germantown, PA; as Chairman of the Board of Directors of Pulse Seismic Inc., a seismic data licensing business located in Calgary, Alberta; as an Independent Director of PrairieSky Royalty, a Toronto Stock Exchange listed company located in Calgary, Alberta, having one of the largest portfolios of sub-surface mineral rights in western Canada; as a recently elected Director of NYSE-listed Tidewater, Inc. which owns and operates one of the largest fleets of OSVs (Offshore Support Vessels) in the industry; and was previously on the Board of Directors of BMC Building Materials Holding Corporation, prior to the completion of its merger with Stock Building Supply Holdings, Inc. on December 1, 2015; and Bob had served on the Board of Panhandle Oil & Gas Company, a NYSE-listed diversified mineral company located in Oklahoma City through May 1, 2020. In addition, he serves on the Boards of many non-profit organizations where he generously donates his time and expertise. Previously, Bob was a member of the Securities and Exchange Commission's Advisory Committee on Smaller Public Companies, established to examine the impact of Sarbanes-Oxley Act and other aspects of the federal securities law. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a fantastic web based research terminal for company specific metrics like KPIs and segment revenues.  Head over to Stratosphere.io to try the product for free OR use the promo code BREW for 15% off Stratosphere's premium product. Detailed Show Notes Below: 3:20 - Bob’s early career 6:35 - How Bob ended up as CFO of Gabelli and Company 10:25 - Bob’s evolution as an investor 14:25 - How tough times create better businesses and Builder’s FirstSource discussion 18:20 - Holding equities and Bob’s biggest loser 29:50 - Why earnings drive liquidity 31:20 - How Bob implements his takeaways from his biggest loser 33:20 - Why Bob got excited about the Revenge of the Old Economy in 2020 35:20 - The case for Olin Corp 43:50 - How Bob’s “margin of safety” comes from his portfolio company’s asset bases 45:50 - Bob’s energy outlook; this is an around the world oil discussion that lasts ~11 minutes 1:02:20 - Why reshoring makes sense 1:04:30 - Did Volker really succeed? 1:05:20 - Why China is no longer deflationary 1:09:20 - The nuance of selling 1:11:20 - The potential perils of linear thinking

Cullen Roche is the Founder of Discipline Funds. Discipline Funds is a low fee financial advisory and asset management firm. Prior to establishing his own business, Mr. Roche founded his own investment partnership in 2005 after working at Merrill Lynch Global Wealth Management where he helped oversee $500MM+ in assets under management. During the the 7 years running the partnership he was able to guide the small business to high risk adjusted returns with no negative full year returns during one of the most turbulent periods in stock market history. Mr. Roche's primary areas of expertise include global macro portfolio construction, quantitative risk management, behavioral finance and monetary theory. He is regularly cited in the Wall Street Journal, on CNBC and in the Financial Times. Mr. Roche is a Georgetown University alumnus, growing up in the DC area and now living in San Diego, California with his fiancée Erica and their problem child, Cal, an Australian Shepherd. You can find Cullen's bio here: https://www.pragcap.com/meet-cullen-roche/ Detailed Show Notes: 1:34 - The fully loaded cost of housing 4:23 - Japanese real estate and what it may mean for real estate in the US 5:54 - Housing as a central component not just to the economy, but to everyone’s balance sheet 8:16 - Housing in other countries whose Central Banks are more aggressive 16:32 - How consumers act in the beginning of economic slowdowns 17:43 - The Fed is worryied about the short term inflation rate 20:41 - The likelihood or more fiscal stimulus in a big downturn 23:08 - How banking operates in panics 32:33 - How Quantitative Easing works 47:36 - The Buffett approach in investing 52:40 - Focusing on investor behavior 54:07 - The inter-temporal (mismatched time horizons) conundrum 1:02:39 - Behavioral problems in a 60/40 portfolio 1:06:17 - Thoughts on diversification 1:15:20 - The biggest benefit of understanding macro finance

Craig Moffett has covered the telecommunications industry – first as a management consultant and later as a Wall Street analyst – for more than thirty years. He has been elected to Institutional Investor Magazine’s All-American Research Team in the U.S. Telecom and/or Cable & Satellite sectors on seventeen separate occasions, including nine separate appearances as the #1 analyst in America in either U.S. Telecom and/or Cable & Satellite. Prior to founding MoffettNathanson, Mr. Moffett spent more than ten years at Sanford Bernstein & Co., LLC as a senior research analyst. He was previously the President and founder of the e-commerce business at Sotheby’s Holdings, the venerable auction house, where, in 1999, he led Sothebys.com to what was then the highest first year sales of any consumer website ever launched. Mr. Moffett spent more than eleven years at The Boston Consulting Group, where he was a Partner and Vice President specializing in telecommunications. He was the leader of BCG’s global Telecommunications practice from 1996 to 1999. While at BCG, he led client initiatives in the U.S. local, long distance, and wireless sectors, in both consumer and commercial services, and advised companies outside the U.S. in Europe, Latin America, and Asia. Mr. Moffett graduated from Harvard Business School with Honors in 1989. He received a BA from Brown University, where he was magna cum laude and Phi Beta Kappa, in 1984. Detailed Show Notes - 5:41 - Why Silicon Valley Bank is a good fit for MoffettNathanson 6:50 - Why telecom is a hard business 7:40 - The history of US telecom 10:10 - How cable incubated an industry under AT&T/telecom's business 15:52 - How does cable compete with fiber going forward? 17:47 - High splits, node splits, who gives a split? 22:50 - Cable strategy and why high splits are the current strategy 29:09 - Wireless vs. broadband going forward 35:00 - The physics of wireless 46:00 - Verizon's big strategic decision was correct but implementation left something lacking 51:10 - Cable's wireless offering and how it fits into the competitive set 58:44 - What does broadband's growth runway look like? 1:03:45 - How do fiber overbuilders factor into the future? 1:08:00 - The fiber bubble will burst.  Then some Altice discussion.

Mark started his professional work life as a consultant with Accenture, where he helped clients for 14 years. He founded his advisory business in 2005, and in 2022 joined Journey Strategic wealth through a merger of his firm with Journey. Prior to graduating from university, he was an auto mechanic, was in the auto parts industry, and spent time as a retail store manager. Mark’s focus has always been either providing advice or fixing things. What drives Mark is helping others reach their goals. Mark believes both financial freedom and fun can occur concurrently. You will find that he has an active (sometimes too active!) sense of humor. He’s quite proud that his teammates Angela and Melissa have been with him for 14 and 12 years and will do everything possible to make sure Danielle stays “forever”, as well. He’s a little nutty about college basketball, golf, and several other sports. In addition, he loves taking beach and golf trips with his family and is an avid reader. Mark holds an Accounting degree from Virginia Commonwealth University as well as the CFP® and RICP® designations. Thank you to @mathewpassy (on Twitter) for the show production. Please leave us a rating in your favorite podcast player! Show Notes: 6:00 - Mark's background 17:30 - Embrace your strengths and weaknesses 22:30 - Good moments coming from scary times 27:30 - Starting a business from a passion 29:00 - Building teams 34:00 - Mark's approach to advising 37:24 - Where Mark thinks we are relative to history 46:50 - The power of checks and balances 50:45 - Finding and retaining employees 58:30 - Thinking about planning for aging 1:10:00 - Why you need to get your Power of Attorney documents done! 1:13:00 - Talking to the older member of your family about the aging process

Matt Cochrane (@Matt_Cochrane7 on Twitter) stops by The Business Brew to discuss his investment philosophy, how it’s evolved over the past few years, Big Tech, and more. Matt is a police officer with a passion for investing. He began his investment education by studying The Motley Fool discussion boards. Bill and Matt catch up regularly and Bill always enjoys chatting with Matt. This week they decided to record one of those conversations. We hope you enjoy the discussion.

This episode features Alex Morris of TSOH Investment Research.  You can find his Substack at https://substack.com/profile/10489671-the-science-of-hitting.  In this episode, Alex and Bill have a casual conversation; mostly about media and cable. Through the conversation you will hear how Alex thinks about partnering with companies and management teams for the long term.  You will also hear how Alex thinks about competitive positions and strategic decision making. Alex is a wonderful person that is sharing his investment journey publicly.  We hope you enjoy the conversation and, should you decide to subscribe, enjoy his research as well. Thank you to @mathewpassy (on Twitter) for the show production. Please leave us a rating in your favorite podcast player!

Daniel Needham, CFA, stops by The Business Brew for a wide ranging discussion. Daniel is a wealth of knowledge. He is president of Morningstar’s Wealth Management Solutions, which includes software and aggregation capabilities from Morningstar Office and ByAllAccounts, and the individual investor experience across Morningstar.com, and Morningstar Investment Management.After the recent acquisition, he also oversees the U.K. and international business of Praemium and their core products, which were re-branded to Morningstar Wealth Platform and Wealthcraft, a Morningstar company.Prior to his current role, Needham served as president and global chief investment officer since 2015 for Morningstar’s Investment Management group, a unit of Morningstar, Inc., that provides managed portfolio services, retirement, and investment advisory for financial institutions, plan sponsors, and advisors through investment management entities around the world.In 2013, Needham stepped into the global chief investment officer role for the Investment Management group, and he also assumed responsibility for Morningstar’s investment management operations in Europe. Previously, Needham was chief investment officer and managing director for Investment Management in Asia-Pacific, including Ibbotson Associates Australia, where he led the group’s business and investment activities in the region.Needham joined Morningstar in 2009 through the company’s acquisition of Intech Pty Ltd., where he served as chief investment officer. He also held other investment roles including analyst, portfolio manager, and head of multi-strategy. Before joining Intech in 2002, Needham worked for Zurich Financial Services in Sydney. Needham holds a bachelor’s degree in commerce from the University of Sydney, where he majored in finance and economics.He also holds the Chartered Financial Analyst® designation and is an interested trustee for the Morningstar Funds Trust.Supplemental Information -Following the podcast recording, Mr. Needham sent the following information to Bill (shared with permission):Here are some useful books to learn more about MMT and Post-Keynesian economics. It pays to tread carefully with all this stuff given the political leaning of the respective economic schools of thought.Soft Currency Economics – Warren Mosler – provides a lens to why the system is different for certain governments post the gold standardJohn Maynard Keynes – Hyman Minsky – one of the best early critiques of the modern economic consensus that dominates central banks and government treasuries