Patrick O'Shaughnessy's Blog, page 5
June 23, 2020
Brad Gerstner – Public and Private Investing – [Invest Like the Best, EP.179]
My guest today is Brad Gerstner, the founder and CIO of Altimeter Capital, a multi-billion dollar technology focused investment firm. Brad and his team are known for a deep expertise in internet enabled businesses, including Expedia, Facebook, Uber, and many more. We discuss the evolution of opportunity in this style of investing, including the important shift to private investing, where so much of the value creation now happens. I won’t soon forget our discussion of consumer intent on the internet and how it has shifted, the role that essentialism plays in Brad’s business and life, and the rise of the Chinese internet giants like Bytedance. Please enjoy this great conversation with Brad Gerstner.
This episode is brought to you by the MIT investment management company (MITIMCO)
Reach out or learn more:
Email: partner@mitimco.orgWebsite: https://mitimco.org/partner/MITIMCo 10 year Letter: https://mitimco.org/wp-content/uploads/2017/03/MITIMCo-Alumni-Letter.pdfMITIMCo brochure: https://mitimco.org/wp-content/uploads/2019/01/MITIMCo-Brochure_web_2018-12-05.pdf
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(2:32) – (First question) – Overall investment philosophy at Altimeter
(5:12) – Most interesting thing in the landscape today
(11:16) – Disrupting the tech giants moving forward
(13:56) – The investing opportunity in the backend of the internet
(16:42) – His take on old line businesses and how technology could shift his view on them
(18:56) – Lessons from company founders whose platforms rely on consumer discovery
(21:32) – Running his business on essentialism
(21:40) – Essentialism: The Disciplined Pursuit of Less
(26:11) – Tactical applications of essentialism
(29:46) – Applying essentialism outside of business
(31:16) – What travel has taught him about business
(33:43) – What we should know about the Chinese internet market
(37:11) – The emergence of bite sized transactions across the web
(39:22) – Bite sized work
(42:43) – How early on can you figure out what company would win a vertical
(45:36) – What problem space would he tackle today
(48:49) – Collaborating in the private markets
(57:27) – Pricing businesses as a key component of his investment choices
(1:02:47) – Fascination with life sciences and software
(1:04:12) – What about the future excites him
(1:06:48) – Kindest thing anyone has done for Brad
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
June 9, 2020
Jeremy Grantham – An Uncertain Crisis – [Invest Like the Best, EP.177]
My guest today is Jeremy Grantham. Jeremy is the co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (aka GMO). GMO, which manages more than $60B for clients, was a firm that helped educate me early in my investing career. They’ve long published thought-provoking research, most of which came from Grantham himself. He is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets, but is particularly noted for his prediction of various bubbles. In this conversation we discuss the current crisis, which he calls the fourth major event of his long and storied career as an investor. As he says, this one is the most uncertain. We also discuss unique topics like commodity-based companies, and how opportunity often lies between fields of expertise. Please enjoy our conversation.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(1:37) – (First question) – What keeps him going in investing
(2:54) – Changing approaches to managing money over the decades
(7:27) – Their investment forecast for major allocations and how that has evolved
(10:06) – How to markets compete with FAANG stocks
(16:06) – More opportunity for active investors and where
(30:55) – How he talks to clients about major stock market events
(34:09) – His interest in natural resources/commodities
(47:07) – Long term argument for the three natural resources: oil, metals, and food
(47:10) – An Investment Only A Mother Could Love: The Tactical Case
(52:01) – Specific case for particular metals
(56:46) – Areas in the future that excite him or that he wants to learn more about
(1:03:42) – Advice for people interested in investing
(1:05:15) – Kindest thing anyone has done for Jeremy
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
June 3, 2020
Hiring
I’m on a mission, and I’m hiring someone to help.
My mission is to capture and openly share the worlds best information on building and investing in successful businesses. Think of this as building an open, free, and ever-evolving university for the benefit of all would be investors and entrepreneurs. I’ve been using Invest Like the Best and my method to accomplish this mission for years, but do so with just a few hours a week and no additional effort to make it spread. So I’m at the point that I need help.
This starts with growing and expanding the Invest Like the Best podcast. This person will be responsible for most aspects of the podcast other than the interviews themselves and the production of the interviews (sound editing and production, artwork, and website maintenance is already covered).
This position includes:
Assisting in and managing the process of finding great guests (I’ll still do the outreach and most of the identification)Building a map of important topics and concepts to be addressed by the best guestsDeep guest research to provide context for each conversation (I never prepare questions as doing so ruins conversations, but the more context I have the better the conversation tends to be).Expansion of formats. This person will create a process where each podcast is turned into other media formats to suit every kind of user. They will convert each to video in some way, and to written formatsDistribution planning. Right now, I post a podcast, tweet about it, and that’s it. The podcast has grown to be one of the largest business and investing podcasts solely through word of mouth. This is sub-optimal. This person will help execute plans to better distribute the podcast so it reaches more interested audience members. Content editing (reviewing each episode and proposing cuts).
Requirments:
Must be deeply interested in business and investing. My questions for candidates will mostly be gauging this specific type of curiosity. If I sense its not there, I’m going to end the call immediately to save us both time. Strong writing skillsMust be familiar with Invest Like the Best since its the perfect litmus test for whether or not we will be aligned.
Things Not Required:
any specific location. You can work from anywhereany specific background. I don’t care where you live, what you studied, what you’ve done to this point professionally (or even if you’ve had a professional career!). You can be 18, or retired.
Compensation:
My priority is to find the right person, and then shape the compensation around their situation, interests, and involvement. There will be sliding scales of time, cash compensation, and upside participation in earnings from the podcast and related projects.
Why I think this is a good job
I promise that whoever this is will be sucked into a world of amazing people and ideas very quickly. If you have ambitions in media, investing, or business, this could be a great stepping stone, a chance to sprint up a learning curve, or, if the candidate is right, the chance to build a media business and participate in the upside of that business.
I also think its a good job because it will come with a lot of responsibility. I can’t spend that much additional time on this each week, and when I do it’ll mostly be odd hours of the evening and weekends. As such, I’ll delegate everything I possibly can. My goal is to become highly reliant on this person and to have them learn as much as I do.
How to Apply:
Pick any episode of the podcast, and write a short (
I’ll respond promptly one way or the other.
May 26, 2020
Shishir Mehrotra – The Art and Science of the Bundle – [Invest Like the Best, EP.175]
My guest today is Shishir Mehrotra and the topic of our conversation is the bundle: offering access to multiple products, services, or providers for a single bundled price. This topic is full of incorrect pre-conceived notions, and as it turns out, the bundle is one of the most powerful ideas in business. Properly harnessed it is good for everyone involved. Shishir explains the ins and outs of bundles in this conversation.
Shishir ran product at YouTube for years and sits on the Spotify board of directors. He founded and now leads Coda (which is “A Doc” spelled backwards) in 2014, to bundle together productivity apps like docs, spreadsheets, databases, and applications. I love this wonky, detailed conversation which has me thinking differently about many businesses and business strategy. Please enjoy.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(1:37) – (First question) – The arc of his career
(3:01) – Why he has an interest in bundling
(7:14) – The concepts of superfan, casualfan, and nonfan businesses
(10:34) – Using Spotify as an example of bundles
(12:53) – The first myth of bundling: Bundling is bad for consumers
(17:22) – The second myth of bundling: 1st vs 3rd party providers and the bundlers
(22:32) – Low usage but high Marginal Churn Contribution (MCC) business
(23:55) – How insurance fits into these models
(26:06) – Myth 3 of bundling: How this impacts consumers
(31:41) – How marginal costs play into the thinking of bundling
(34:23) – Myth 4: Bundling things that have nothing to do with each other
(39:20) – How bundling companies can apply this into their product development
(42:50) – Strategic advice to companies building bundles
(48:30) – How price and pricing power play into advantages for certain bundlers
(53:45) – How does bundling play into his investing thesis
(56:16) – Most interesting bundles he’s observed
(58:13) – Eigenquestions: The Art of Framing Problems
(58:42) – What the future of this trend is
(1:01:53) – What is an eigenquestion
(1:05:58) – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
May 19, 2020
Hamilton Helmer – Power + Business – [Invest Like the Best, EP.174]
My guest today is Hamilton Helmer, the Co-Founder and Chief Investment Officer of Strategy Capital and the author of one of the best business books in history called 7 Powers, which is the topic of much of our conversation. He has spent his career as a practicing business strategist: advising companies, investing based on strategy insights and teaching strategy. In the last three decades he has also utilized his strategy concepts as a public equity investor. In this conversation we cover all seven business powers, from counter-positioning to scale economies, and how companies earn and keep those powers. Any investor or businessperson should understand these concepts, and 7 Powers is the best work I’ve seen that explains them in depth. Please enjoy our conversation.
Show Notes
(1:31) – (First question) – What power means to him
(5:05) – Benefits being more common than barriers in the power equation
(6:28) – How early stage companies develop their barriers
(11:23) – The power of counter positioning and how he’s seen it applied
(14:47) – The product side of counter positioning
(16:39) – Daniel Ek Podcast episode
(17:27) – Applying the idea of counter positioning to yourself
(20:40) – A cornered resource
(23:49) – A look at google as a cornered resource
(27:12) – Unique power of network economies
(31:18) – What subtleties disqualifies network effects
(32:54) – Nuances of scale economies
(35:56) – Learning economies and who can scale it better
(37:07) – Building a switching cost and barrier into your business
(40:10) – Branding as power
(44:27) – Defining process power and how it differs from scale economies
(46:40) – The notion of the time lag and cash flow
(50:42) – Why is so much power concentrated in technology businesses
(52:07) – What does power mean for customers
(53:43) – Developing power as an art vs science, and the best power artists
(55:08) – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
May 12, 2020
Tobi Lutke – Building a Modern Business – [Invest Like the Best, EP.173]
My guest today is Tobi Lutke, the co-founder and CEO of Shopify. This is both a timely and evergreen conversation. Timely, as the world as moved aggressively digital in the past two months, and Shopify powers so much of digital commerce. Evergreen, because while we touch on Covid and the Shopify business, this is much more a conversation on business and personal principles, learning, design, and growth. Tobi is one of the CEO’s I look up to most for the type of company he is building and for the way he conducts himself. We discuss business focus, why video games help you learn the power of attention, what design means for products and organizations, and much more. Please enjoy my conversation with Tobi Lutke.
This episode is brought to you by the MIT investment management company (MITIMCO)
Reach out or learn more:
Email: partner@mitimco.orgWebsite: https://mitimco.org/partner/MITIMCo 10 year Letter: https://mitimco.org/wp-content/uploads/2017/03/MITIMCo-Alumni-Letter.pdfMITIMCo brochure: https://mitimco.org/wp-content/uploads/2019/01/MITIMCo-Brochure_web_2018-12-05.pdf
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(2:35) – (First question) – The launch of the new Shopify shop app
(2:44) – Deniel Ek Podcast Episode
(2:45) – Jeff Lawson Podcast Episode
(4:56) – Having the right focus and growing a good business
(9:06) – Marketplace business model vs the merchant driven business model
9:16 – Bill Gurley Podcast Appearances – 162 | 144 | 137
(11:47) – His role as a decisionmaker as CEO of the company
(14:07) – What does he mean when he talks about quality
(18:28) – His thinking on design and quality
(18:32) – Zen And The Art Of Motorcycle Maintenance
(19:59) – The Design of Everyday Things
(21:06) – Friction as a force in business and manufacturing
(26:04) – His thoughts on systems and being free of process
(26:08) – The Systems Bible
(30:01) – The game of Factoria and how it relates to systems
(32:16) – Transfer Learning
(34:33) – What Real-Time Strategy games have taught Tobi
(38:30) – Building context inside of a company and making it scale
(41:17) – Personality typing
(46:22) – The Tobi Blueprint
(46:04) – Why he likes The Guide to the Good Life and stoicism
(55:38) – Raising kids and the impact of Covid
(1:03:16) – Kindest thing anyone has done for Tobi
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
May 5, 2020
Ali Hamed – An Update on Private Credit – [Invest Like the Best, EP.172]
My guest today is popular past guest Ali Hamed, who joins us for an update on private credit. We discuss what has happened so far, what parts of the market are frozen, and where opportunities may lie. We also talk about how the world has shifted digitally since the beginning of the COVID pandemic. Please enjoy my conversation with my friend Ali Hamed.
This episode is brought to by Koyfin.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(1:41) – (First question) – World of private credit in the pandemic age
(4:50) – Bag of uncertainty
(6:27) – Important levers in private credit
(9:15) – Scary scenarios and systemic risks in this world
(13:21) – General trends in the credit data
(15:30) – Are investors factoring government response properly
(17:02) – Defining advanced rates
(20:18) – Focus on quality vs rate of return now
(22:26) – Pockets of opportunity as uncertainty declines
(26:06) – Online ecommerce platforms, like the YouTube economy
(29:40) – Non advertising driven ecommerce platforms
(31:54) – How venture capital is responding
(38:19) – How junior debt could be am opportunity
(40:17) – Trends he’s thinking about; redefining small businesses
(43:07) – Ali Hamed Podcast Episode
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
April 30, 2020
Chris Bloomstran – Update on Public Markets – [Invest Like the Best, EP.171]
My guest today for a flash update is Chris Bloomstran, the founder and CIO of Semper Augustus and a popular past guest on the show. We talk about his view on the state of the public equity market, why it will be hard for the market to deliver great returns for the next decade relative to the last, and where opportunities may lie. Please enjoy.
This episode is brought to by Koyfin.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(1:42) – (First question) – Adjustments to his portfolio in the age of a pandemic
(6:41) – Chris Bloomstran Podcast Episode
(9:36) – The Federal Reserve Act
(12:32) – Surprising action in the markets during the crisis
(13:08) – 2020 Investment Letter
(15:02) – Why we won’t see the same performance in tech over the future as we’ve seen the last decade
(21:00) – The carnage in energy sector and return potential
(30:06) – Berkshires activity since the crisis started
(35:48) – Where sectors are valued in the current market
(41:12) – Expectation for deflation over inflation
(48:54) – Characteristics to look for in businesses to own over the next 10 years
(52:05) – Economic factors they are focusing on
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
April 28, 2020
Josh Kopelman – The Past, Present, And Future Of Seed Investing – [Invest Like the Best, EP.170]
My guest today is Josh Kopelman, the founder of famed venture capital firm First Round Capital. Prior to starting First Round, which has invested at the earliest stages in companies like Square, Uber, and Roblox, Josh was a three-time entrepreneur, so our conversation spans early stage investing, business building, and entrepreneurship. I’ll not sure forget his analogy distinguishing between navigators and cartographers, nor the rest of the interesting ideas he shared after seeing and investing in so many great businesses. We also discuss how First Round has bucked the trend to build what I’d call a platform adjacent to the core investing business which does a lot for their entrepreneurs and is a model for other professional investing firms, both in venture and elsewhere. Please enjoy my conversation with Josh Kopelman.
This episode is brought to by Koyfin.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Show Notes
(2:05) – (First question) – How pandemic has impacted their investing strategies
(3:54) – How this stressful environment impacts founders
(6:23) – His early career as a founder and how startup culture has changed
(10:15) – Most important lessons from his entrepreneurial career and building from just an idea
(11:50) – How to analyze a founder
(14:05) – Common disagreements when it comes to deciding on an investment
(15:33) – How many opportunities they evaluate in a meeting
(16:16) – The curvy road to their investment in Roadblox
(17:52) – Whether the concept for a platform is overused
(19:36) – Founders asking what google search they should build on
(20:46) – Solving existing or forecasted problems
(25:39) – How the startup scene is impacted by the huge legacy tech companies
(30:28) – What makes a great early stage investor
(32:19) – Do they focus on founders or themes
(33:19) – Where will valuations and returns come back to after the pandemic
(36:30) – How are business models evolving in technology entrepreneurship
(36:31) – Matt Clifford Podcast Episode
(39:40) – The Dorm Room Fund
(43:02) – Whether investment funds should have their own platform
(47:31) – Product mistakes in software building
(51:52) – What he’s most excited about for the future
(54:05) – Kindest thing anyone has done for him
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on Twitter at @patrick_oshag
April 21, 2020
Manny Stotz – Frontier Markets Investing – [Invest Like the Best, EP.169]
My guest today is Manny Stotz, the founder of Kingsway Capital. Manny is one of the leading investors in Frontier Markets, investing in equities in countries like Egypt, Bangladesh, and Pakistan. We discuss the opportunity in these markets from all angles: demographics, valuations, sectors and beyond. It is important to note that we recorded this conversation before COVID, and these markets have fallen 30% without a similar rebound in prices that we’ve seen in the U.S. As you listen you’ll hear why this may be relevant for the companies Manny focuses on and may accentuate the opportunity in Frontier Markets even relative to the numbers quoted in this conversation. Listeners will know my interest in Frontier Markets runs deep, so I was excited to have one of the categories leading investors join me.
Please enjoy my conversation with Manny Stotz.
This episode is brought to by Koyfin.
Show Notes
2:07 – (First question) – How Kingsway was conceived, their focus on frontier emerging markets, and his career path
11:57 – What are the best company builders good at when it comes to fostering a brand
18:30 – How country-specific factors impact the tailwind
25:43 – How markets are faring in these special circumstances
32:09 – Building a book in many of the markets they trade-in
37:10 – Understanding your edge in frontier markets, showing up
39:59 – Importance of solid distribution for the companies he invests in
42:12 – Concentration in various markets
44:10 – Moving beyond consumer brands in these markets
47:14 – Some of the most interesting countries they are looking into and the country business model
47:42 – Guns, Germs, and Steel: The Fates of Human Societies
47:44 – Civilization: The West and the Rest
47:46 – Why Nations Fail: The Origins of Power, Prosperity, and Poverty
53:21 – New topics he’s excited to learn about that will impact his business over the next 10-20 years
55:37 – Best way for people to get involved and invest in these markets
58:17 – Kindest thing anyone has done for him
