Boring Businesses In Overlooked Areas: The Holy Grail of Deep Value Investing

Yesterday we discussed where we’re looking for deep value investments: Poland. Today, we’re fleshing out the types of companies we’re looking for. These companies are homogenous in style across the globe. Durability doesn’t change regardless of where we are in the world. And that’s a good thing.

In short, we’re looking for three things:

    1. Boring businesses uninterrupted by technology changes
    2. Easy-to-understand business models
    3. High insider ownership

Now of course these companies have to be cheap — otherwise we wouldn’t bother looking at them. But besides your standard discount to future cash flows, the above three criteria help us find great businesses at those cheap prices.

But why these three? Let’s dive in.

Boring is Beautiful

Boring businesses are beautiful. They go about their day-to-day operations with efficiency and robotic automation. They’re not susceptible to headline risk (i.e., negative news), and all around unassuming to most investors.

Here’s a great way to filter the boring companies from the more “exciting” ones. Ask yourself one question: “Are there any 18-25 year olds dying to get into this business?” If the answer is “no”, you’re in the right place.

Boring businesses are great investments because a) nobody wants to invest in these companies and b) most boring businesses perform some vital task. What do I mean by vital? Sewage, plumbing, HVAC, pool installation, road maintenance, etc. These businesses make civilized life possible. It’s the things we take for granted all the time, then complain when they’re not working.

But there’s the second part to this equation: uninterrupted by technology changes. This is important for two reasons. First, technology changes every day, sometimes faster than we can comprehend. Second, investing is a game of probabilities and expectations. Guessing those two things (probabilities and expectations) in an ever-changing industry is darn-near impossible.

As you’ll see in the next email, both companies in the February Value Ventures are very boring businesses.

This leads us to our second criteria: easy-to-understand business models

Simplicity Rules, Especially In Business Models

Another great consequence of boring businesses is their tendency for simple, easy-to-understand business models. A road maintenance company isn’t too hard to understand. A pool installation company isn’t offering rapidly changing technology packages.

Simple business models increase your chances of accurately projecting the future set of probabilities for that company. That’s not to say you’ll be right every time. But you’ll have a clearer picture on what the future could look like due to the lack of industry/company change.

We’re making it plenty tough going outside the US into countries where we don’t know the language. Adding a complex business model on top of that is downright foolish.

Adding another layer of comfort and alignment is our third criteria: high insider ownership

Eat Your Own Cooking

We want to invest in companies whose owners have skin in the game. It doesn’t matter if its a Polish company or a US listing. Insider ownership aligns management’s interests with those of its shareholders.

This doesn’t guarantee that management will act in the best interest of shareholders. In fact, too much insider ownership isn’t great either. A family business where insiders control 90% of the company doesn’t bode well for shareholders.

One of the companies we profile has 60% founder-led insider ownership. Interests are well aligned in this situation, and even better, the founders still run the company.

A Look Ahead

In our next email, we’ll review the high-level theses of our two Polish ideas. Both companies share a few key qualities:

    • Very cheap
    • Low expectation stock price
    • Strong balance sheet
    • Boring business
    • Healthy cash flow generation

If we’re right (or not too wrong), we should be handsomely rewarded for holding such names.

If you’re interested in our Value Ventures research service, then make sure you check out this page to learn more about it.

That’s all I got for today. Shoot me an email if you come across something interesting this week at

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.