Preferred Shares Podcast

Welcome to Episode 14 of the Preferred Shares Podcast.In this episode, Preferred Shares explores the evolution of grocery retailing in the United States with a focus on the rise of A&P, it becoming the largest retailer in the world, and the company’s ultimate demise. To help tell this story, there is no better expert than historian, author, and economist Marc Levinson, author of The Great A&P and the Struggle for Small Business in America. Levinson has authored several other books, including The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, and has contributed to reputable publications such as Time magazine, The Economist, Newsweek magazine, and Harvard Business Review.In this episodeA&P tea distributionThe grocery retail landscape in the late 19th centurySpices, baking powder, and the rise of branded goodsPackaging innovationsWholesaler influence and control over grocersKroger, Albertsons, and Grand Union all began as tea companiesPerishable vs stable goodsEarly store dimensions - 20 ft x 25 ftManufacturer-set pricing, markups and ‘fair pricing’Chain stores gaining bargaining powerA&P Economy stores - bare-bones, limited selection, rock-bottom pricesRethinking profitability, inventory turnover, margins versus returnsA&P’s vertical integration efforts, including dairies, canneries, macaroni and cocoa factories, and moreScaling bargaining powerWhat does ‘fair price’ mean? The counterargument that discounting is actually harmful to consumers over the long runAdvantages of private company vs. being publicLong-term perspectiveState and federal efforts aiming to crush chain storesFixed prices, scaling chain taxes, and targeted restrictionsWeighing regulation and innovationAnti-trust case again A&PPressures closing A&P’s discount gap and eroding its reputationStrain from a lack of distinct succession plan and ability to adaptPressures from being public to produce dividends rather than reinvest and reinvigorate the businessOur post-interview discussionEpisode ResourcesThe Great A&P and the Struggle for Small Business in America, Second EditionMarclevinson.net“When Washington Bailed Out Mom and Pop” – Marc Levinson discusses his book on December 15, 2011, at an event hosted by the Library of Congress.“How The A&P Changed The Way We Shop” – Marc Levinson discusses his book on August 23, 2011, on NPR’s Fresh Air show.“The Great A&P and the Struggle for the Soul of Antitrust”, 98 Iowa Law Review Bulletin 55 (2013).Additional ReadingCurious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:Book Review: The Great A&P and the Struggle for Small Business in America by Marc Levinson, Lawrence Hamtil, 4/1/2021“Excising the Old”, Part III in a three-part series on IBM’s electric typewriter and computer printer division, Douglas Ott, 10/6/2024Enjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 13 of the Preferred Shares Podcast.We interviewed our friend and special guest, Rae Maile. Rae is a veteran analyst who has covered the tobacco industry for over 35 years. He has never held back his strong opinions, and always has the data to support them.In this episodeRae’s background in financial services, from junior analyst covering brewers and general retail to financials and tobaccoHow the tobacco industry has changed and stayed the sameThe perpetual lack of confidence about the tobacco industry - both from external analysts as well as industry executivesPopulation growth’s ‘denominator effect’ within price versus volumeNext-gen nicotine products in the industry landscapeGlobal demand for nicotine risingDifferences across markets and categories concerning barriers to entry, regulation, and adoptionThe anti-smoking lobby’s morphing into anti-nicotineTaxation, prohibition, and illicit tradeMoral zealotry battling against the individual’s choiceESG-based investing and idle threatsOver the last century, tobacco is the only industry that hasn’t had a negative 10-year period. What makes the industry so special?Should tobacco be placed next to other CPGs, or is it in a separate league?When it comes to tobacco, why do so many analysts obsess over volumes and disregard other critical variables?What distinguishes a great analyst? Skills needed and the psychology of marketsRae’s unique writing style. Finding your voice and filling your roleLessons from Marlboro Friday and price laddering modelsThe UK market post-BrexitPerpetual pessimism versus share repurchase programs, dividends versus share repurchases, and capital allocation frameworksThe industry’s history of poor diversification effortsSurrendering to the science, forgetting the consumerEpisode ResourcesLucy Page Gaston, founder of the Anti-Cigarette League of AmericaSir Martin Faulkner Broughton, previous Finance Director, CEO, and Chairman of BAT“PHILIP MORRIS AGREES TO BUY GENERAL FOODS”, Chicago Tribute, Sept. 1985.Additional ReadingCurious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:Discussing Going Down Tobacco Road with Gene Hoots, Lawrence Hamtil (Fortune Financial) published September, 2020Assessing Altria and Tobacco Fundamentals Five Years After the Peak, Lawrence Hamtil (Fortune Financial) published March, 2023The New Era of Nicotine, Devin LaSarre (Invariant) published July, 2022Imperial Brands: Looking Through the Noise, Devin LaSarre (Invariant) published October, 2023Altria: Back to the Race, Devin LaSarre (Invariant) published August, 2024Philip Morris International: More More More, Devin LaSarre (Invariant) published February, 2024Enjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.ShareSubscribe nowDisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Henry Crown, founder of Material Service Corporation, faced challenges and achieved success through strategic acquisitions. His investments in Rock Island Railroad, Hilton, and the Empire State building were remarkable. Crown's leadership at General Dynamics reshaped the company. His vision and investment success are comparable to legendary investors like Buffett and Munger.

Welcome to Episode 11 of the Preferred Shares Podcast.In this episode—the second part in our series on the beneficiaries of the spending on the interstate highway system of the United States—Preferred Shares explores the aggregates industry. In particular, we go over the early history of Birmingham Slag, the family-owned business that evolved into Vulcan Materials Company (VMC).In this episodeInterstate Highway System background refresherThe unique qualities of the aggregates industryEarly Vulcan Materials historyRole of inheritance tax in driving industry consolidationState of the industry today: does a focus on aggregates drive premium valuations?Henry Crown, founder of Material Service Corp.How two large aggregates businesses were acquired by two defense contractorsDevin’s case study on FRP HoldingsWrapping up on key takeawaysEpisode ResourcesCruikshank, George M. A History of Birmingham and its Environs. Lewis Publishing, 1920.“Shipped Over Million Tons of Slag in 1923”, The Dixie Manufacturer, January 25, 1924.“Crush Million Tons of Stone For T.V.A.”, Rock Products, December 1941.“Slag Firm In Merger”, Rock Products, November 1956.“Invasion From the Deep South”, Business Week, Feb. 14, 1959.“Vulcan Materials acquires three N. C. quarries”, Rock Products, April 1959.“The Clans of Vulcan”, Fortune, January 1960.“Martin, Marietta Agree to Merger”, New York Times, June 24, 1961.“Materials in Use in U.S. Interstate Highways”, US Geological Survey, 2006.A History Written in Stone. Vulcan Materials Company, 2008.Additional ReadingCurious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:Rock Pile Riches, Lawrence Hamtil, 2/02/2024The Pits, Devin LaSarre, 1/8/2023DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 10 of the Preferred Shares Podcast.Lawrence Hamtil, of Fortune Financial Advisors, and Douglas Ott, of Andvari Associates, were the primary researchers for this episode. In this episode, we are joined by Ian Clark, founder and head of Dichotomy Capital, a power market focused investment manager that utilizes intensive research to find attractive opportunities in the public and private markets. In this episodeIan Clark’s personal and professional backgroundWhat is a fat pitch for an expert in the utility space?Difference between regulated and unregulated marketsIs there an investor preference for utilities that are diversified or focused on one type of market?Ian’s checklist for evaluating a utility investmentFactors that impact the capital structure of a utility companyCatastrophe risk and why water utilities are so boringAre synergies really available post-acquisition in a heavily regulated environment?Best practices in the utility spaceThe push/pull of returning capital to shareholders versus reinvesting for growthIan on the Averch-Johnson effectWill data centers and AI be a boon to utilities?Is there a great capital allocator in the utility space?Utilities are the last bastion for true scuttlebutt researchEpisode resourcesDichotomy Capital websiteNextEra Investor MaterialsDuke Energy Investor RelationsUS Federal Energy Regulatory Commission (FERC)Changing Times, Changing Values: A Historical Analysisof Sectors within the US Stock Market 1872-2013Additional readingCurious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:Recession Resiliency: The Auto Repair Ecosystem, Douglas Ott, 4/17/2024Generational Smoking Bans, Devin LaSarre, 4/21/2024DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 9 of the Preferred Shares Podcast.Lawrence Hamtil, of Fortune Financial Advisors, and Douglas Ott, of Andvari Associates, were the primary researchers for this episode.In this episode- The Federal Aid Road Act of 1916- Route 66- Strong road advocate Cyrus Avery- Dwight D. Eisenhower- Influences of the Trans-Continental Motor Truck Trip and German Autobahn- The Federal Aid Highway Act of 1956- Quantifying the enormity of resources needed to build the interstate system- Opposition to the interstate program - scandals, corruption, inefficiency, displacement, and the continually contentious topic of billboards- Looking back on the total economic benefits from the roads programsEpisode resourcesHow The Interstate Highway System Changed American Industry, Lawrence Hamtil, 3/7/2024The Golden Age of American Railroading, Iowa University Libraries, June-Aug 1989America on the Move, Eyewitness, 11/3/1919, page 4The Greatest Decade 1956-1966, pt 2, USDT FHA, updated 6/27/20171919 Transcontinental Motor Convoy, Eisenhower Library, 1919Essays on the Effects of Highway Spending, Daniel Leff Yaffe, 2020All Those Numbers: Logistics, Territory and Walmart, Jesse Lecavalier, May 2010Highways and Globalization, Taylor Jaworski, Carl Kitchens & Sergey Nigai, May 2023The Highway Capital Problem, USDT, Federal Highway Administration, Office of Program and Policy Planning, 1975Benefits of Interstate Highways, United States. Federal Highway Administration, 1970Additional readingCurious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:Andvari Q1 2024 Letter: Kelly Partners, CoStar, and Rates, Douglas Ott, 4/4/2024Haypp Group: Ahead of the Nicotine Pouch Megatrend, Devin LaSarre, 2/25/2024DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 8 of the Preferred Shares Podcast.Devin LaSarre, of Invariant, was the primary researcher for this episode.In this episode- The unique origin story of Bellerby Globes- The complexities of artisanal globemaking- Bellerby’s current size, output, and price points- Custom products and the production process, start to finish- The importance of control and quality assurance- Attracting and retaining talented team members- Relationships with the suppliers of input materials- Planning for the company’s future- The lack of competition within the artisanal globemaking space- Complexity preventing counterfeiting- Bespoke projects currently in the works- Advice to founders determined to build a high-quality productDisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 7 of the Preferred Shares Podcast.Douglas Ott, of Andvari Associates, was the primary researcher for this episode.In this episode-The battle between the NFL and the AFL-The origins of specific franchises, including the Colts, Cardinals, and Giants-Lamar Hunt’s influence and the Hunt family’s wealth and other endeavors-Commonalities across original and current franchise owners-Long-term mentality and ‘permanent capital’-Future outlook for franchise and league expansionEpisode resourcesNational Football League, WikiwandNFL Team Valuations, Forbes, 7/30/2023Hunt Family, Forbes, 12/16/20Additional readingAlong with the resources above relating to episode 3, below are some pieces we’ve written independently that we think you’d like:Rock Pile Riches, Lawrence Hamtil, 2/2/2024Altria: The Great Race, Devin LaSarre, 2/4/2024Enjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 6 of the Preferred Shares Podcast.This episode is our first interview with a special guest; friend of the show Warwick from Down Under (Australia). Warwick is a chemical process engineer by training and has worked at some of the world’s most secretive food companies, including Mars and Cargill. We are privileged to share his expertise and stories with you.“One thing I've learned is the thing that you think is so unlikely that it will never happen, even though the consequences are pretty bad—that's waiting for you next week.” - Warwick from Down UnderIn this episode* (0:02:20) Warwick’s background in the food industry, spanning back more than two decades* (0:03:04) Warwick’s current role overseeing a plant that processes 400 tons of carrots into carrot juice PER DAY* (0:03:55) Extreme quality control at Mars is not hyperbole* (0:05:31) Plant safety, GMP (good manufacturing processes), and what can go terribly wrong* (0:06:54) Differences between Mars and its publicly-held competitors. The importance of culture, consequences, and morale* (0:10:13) The shortcomings of business improvement systems (Six Sigma, Lean, etc.)* (0:13:41) Manufacturers losing technical strength over the last 20 years* (0:14:31) How the pandemic altered the manufacturing landscape* (0:20:54) Step changes in process automation, technical debt, and managing key systems* Siemens and Allen-Bradley (Rockwell) - Automation and digitization* (0:25:55) Approaching evolving regulation and comparing the Australian system to the United States* (0:30:02) Quality and consistency problems as a leading indicator prior to major food safety risks* (0:31:04) The story of when Warwick presented to John Mars, a notably intimidating character* (0:33:00) Implementing rigorous safety systems and the importance of on-site evaluations* (0:35:35) Learnings from the Deepwater Horizon disaster* (0:39:37) Critical inputs - Industrial Staples:* FUCHS and Klueber - Industrial lubricant oil suppliers* GEA - Expansive provider of industrial equipment and services* EcoLab and Diversy - Cleaning chemical suppliers* Fastenal and Coventry Group - Critical industrial parts distributors* Spirax-Sarco, TLV, and Armstrong International - Steam equipment suppliers* (0:48:02) Capital equipment, warranties, maintenance, and the benefits to scaled operators* (0:54:17) Energy availability vs. post-production transport costs and the formation of geographic moatsEpisode resources* Praise for an Unlikely ‘Whistleblower’, Food Safety News, 9/25/2015* Workers on Doomed Rig Voiced Concern About Safety, New York Times, 7/21/2010* EPSC Learning Sheets Booklet, European Process Safety Centre, 2023* Knowledge, Service, Products, Spirax-Sarco, 2019, Order a free copy of the book!Additional readingAlong with the resources above relating to episode 3, below are some pieces we’ve written independently that we think you’d like:Toxic State, Devin LaSarre, 12/24/2023Linear Technology: The Analog Chip Company That No One Leaves, Douglas Ott, 9/1/2022Enjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Discover the fascinating journey of Otto Orkin, who transformed pest control from a family farm to a leading enterprise. Explore the resilience of his Jewish family during their immigration to America. Delve into innovative marketing strategies, from live-action ads to animated series, that skyrocketed Orkin's visibility. Uncover the significant business shifts during its acquisition by Rollins, including efficiency boosts and a focus on long-term guarantees. The blend of family dynamics and industry evolution paints a compelling portrait of entrepreneurial success.