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Will Thrower: Deep Value Opportunities in Japan & Australia (Ep. 47)

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Will Thrower is one of the most under-followed investors on Twitter. In fact, his Twitter profile is like the companies he hunts for: undervalued with long runways for growth. Our conversation took us from chicken farms in China to equity trading offices in London.
How Will got started in markets is such a fascinating story. It was one blog post, picked up by Bloomberg, that led to a job as an equity analyst.
We spend over an hour discussing how Will finds ideas, the opportunity set in Japan and Australia, and why US investors should think twice before passing over an International business because, “A US competitor can do the same thing.”
Here’s the time-stamp for our chat: 
  • [0:00] The Chicken Farm
  • [5:30] What led you to become an equity researcher?
  • [20:30] The Beenos Thesis (3328.T)
  • [33:20] Questions that You Want Management to Answer.
  • [35:20] An Ideal Investment
  • [40:40] Nano Cap Investments and Competitive Advantages 
  • [54:00] Positioning Sizing
  • [1:01:10] Advance Nano Tek (ASX: $ANO)
  • [1:16:00] More from Will Thrower
  • [1:19:22] Closing Questions
This was one of the more esoteric conversations I’ve had on the podcast. Will is intellectually bright, honest and has a thirst for learning. He’s also a good investor. Two of the companies he wrote on his blog have gone on to generate monster returns. Beenos (3328.JP) is up over 30% since he wrote about it. And Base (4477.JP) is up nearly 40% since late August. 
If you enjoyed our conversation and want to learn more about Will Thrower, check out the following resources:

How To Write A Great Investment Thesis w/ Morgan Housel

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Morgan Housel is a man that needs no introduction. He’s a NY Times Bestseller, prolific writer for Collaborative Fund and great conversationalist. I’m still amazed I was able to swindle him into joining the podcast this week. As a writer, I’ve wanted to chat with him and pick his brain about his writing process, how he thinks about new topics and the power of reading.

Morgan and I spend an hour discussing investment philosophy, the power of writing and what makes a great investment thesis. This was arguably my favorite and most challenging podcast to plan. I struggled with the question, “What do I ask the man that’s been asked every question under the sun?”

Well, here’s how it turned out:

  • [0:00] Who is Morgan Housel?
  • [1:32] Most Challenging Parts of Writing a Book.
  • [7:45] Investing Psychology
  • [14:10] Topics that Haven’t Been Written About in WW2 and in Finance.
  • [19:50] Becoming a Writer
  • [28:00] How to Write an Investment Thesis?
  • [30:00] Examples of Good Investment Theses: Dandelion Energy & Beyond Meat
  • [34:00] The Reasons Behind Complex Business Models
  • [39:00] How to Look for Ideas.
  • [45:00] Writing is a Thinking Process.
  • [48:00] How Has Writing Changed Your Life?
  • [50:00] Closing Questions: What Writer Would You Like to Write Your Biography?

This episode is a testament to scratching my own itch. Asking questions because I wanted to know the answer, not because I thought it would make for a great podcast. I hope you enjoy this episode as much as I did.

Thanks again to Morgan for coming on the show. If you want to learn more about Morgan, check out the following links:

***Disclaimer: Nothing you hear on this podcast is in any way, shape or form to be construed as investment advice. The guest on this podcast may hold positions in any/all names mentioned during the podcast. This is not investment advice and investors should always conduct personal due diligence before investing in any security. Past performance of any funds mentioned are not indicative of future returns.***

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$NTDOY, $TWTR and The Hard Break w/ Aaron Edelheit

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Aaron Edelheit is the CEO of Mindset Capital and author of the book, The Hard Break: The Case for a 24/6 Lifestyle. He also runs the newsletter, Mindsetvalue. Aaron’s a tried-and-true value investor searching the globe for undervalued businesses.

We spend the early portion of the podcast discussing Aaron’s early investment philosophy, his real estate endeavors and how he grew his small partnership into $25M.

From there, we talk biggest winners/losers over his investing career and why he wrote The Hard Break. 

Finally, we spend the bulk of the conversation diving deep into Nintendo ($NTDOY) and Twitter ($TWTR). Aaron lays out the NTDOY bull case, the bear case and exciting new technologies on the horizon for NTDOY. Aaron also dives into TWTR’s bull thesis, the bear thesis and what investors should know about the company’s future. 

Finally, we spend the remaining time discussing international investment ideas and where Aaron’s looking for value (hint: its Japan).

Big thanks again to Aaron for coming on the show. He was a fantastic guest and I can’t wait to have him back on for another episode!

Here’s the time-stamp:  

  • [0:00] Who is Aaron and how did you get started in investing?
  • [6:33] What was your style for growing a small sum into 25 million?
  • [7:00] Biggest Winners: ATL Ultrasound
  • [12:00] Biggest Losers? Doesn’t matter how people sound or how they look, you really need to be very skepticism.
  • [17:15] The dangers of overworking and Aaron’s Book “The Hard Break: The Case For The 24/6 Lifestyle”
  • [35:00] Nintendo: A 2013 MSFT?
  • [56:00] Risks for Nintendo
  • [1:01:00] Value investor’s case for Twitter
  • [1:22:00] Besides Nintendo and Twitter where can value be found? (Energy and Lincoln Educational Services)
  • [1:32:00] International Investments: Japan
  • [1:40:00] Closing Thoughts and Questions
If you want to learn more about Aaron Edelheit, check out these links: 
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$SE, $GRVY and Digital Transformation w/ Mads Christiansen

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Mads Christiansen is a private investor specializing in digital transformation, e-gaming and technology. He freely shares his thoughts and ideas on Twitter and also runs a YouTube channel (both you can find in links below). Mads got his investing capital from his job as a medical practitioner. While working, he parked his money in passive index funds.

As his itch for investing grew, he found himself drawn to e-sports, gaming and digital transformation companies,. These are companies with long secular tailwinds at their backs. To Mads, if you start your fishing trip in the best ponds, you’ll end up catching a few big winners. And that’s exactly what he’s done. A couple of Mads’ big winners include Sea, Ltd. (SE) and Gravity (GRVY).

Mads and I chat about poker, investing, bet size, portfolio management and specific investment ideas. Check out the time-stamp below:

  • [0:00] Who is Mads Christiansen?
  • [4:30] Specialization vs Generalization
  • [8:00] How to develop the specialization skill?
  • [11:00] How to not suffer from FOMO?
  • [13:00] Poker and Investing: $MELI Case
  • [20:00] Gaming and eSports
  • [24:30] Challenges in Analyzing the Gaming Industry
  • [27:30] eSports
  • [30:30] Mads’ Portfolio Picks: $SE and $GRVY
  • [35:00] Valuing $SE
  • [41:00] $GRVY
  • [47:00] Portfolio Construction
  • [49:50] Customer Attention and the importance of it for a Value Investor.
  • [56:00] New Opportunities
  • [57:00] Closing Thoughts
  • [1:00:40] Closing Questions

If you liked our conversation, consider following more of Mads’ thoughts:

Thanks again to Mads for coming on the podcast! I look forward to reading more of his ideas and watching his portfolio reviews.

***Disclaimer: Nothing you hear on this podcast is in any way, shape or form to be construed as investment advice. The guest on this podcast may hold positions in any/all names mentioned during the podcast. This is not investment advice and investors should always conduct personal due diligence before investing in any security. Past performance of any funds mentioned are not indicative of future returns.***

$UBER Deep Dive w/ Abdullah, Mostly Borrowed Ideas

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Abdullah runs the Mostly Borrowed Ideas newsletter and Twitter account. He’s one of the sharpest value investors on Twitter and I look forward to his emails every month.

Abdullah got his start as an equity analyst and realized he wanted to create his own newsletter and achieve financial freedom. The ability to work anywhere and do what he loves. You can hear his passion in the way he talks about business models, valuation and investing.

We spend the early part of the show discussing Abdullah’s background and general investment philosophy. After that, we dive deep into Abdullah’s latest research report: Uber (U).

There’s a lot of information in this podcast, so you might want to listen twice. Abdullah walks through the bullish thesis, Uber’s specific risk points/competitive challenges and valuation. What I loved about Abdullah’s research is that he ended the report not bullish on the company.

Pay close attention to his thoughts on valuation and how he backs into it using an Expectations Investing approach.

Time-Stamp:

  • [3:23] Intro Questions
  • [9:13] Why did you start a newsletter?
  • [16:34] Uber Deep Dive
  • [22:04] Why People Use Uber
  • [28:06] The Troubling Economics of Uber
  • [39:26] Driver & Customer Incentive Structures
  • [42:18] Uber Eats Unit Economics
  • [53:15] The Consumer Disincentive for Uber Eats
  • [63:12] Performance-Based RSU’s
  • [69:34] Closing Questions

Where To Find Mostly Borrowed Ideas

If you want to learn more about Abdullah and his newsletter, check out the following links:

This episode is brought to you by TIKR. Join the free beta today at TIKR.com/hive. They’re constantly releasing new updates that make the platform better including a new Business Owner Mode that hides share count, market cap and enterprise value. I couldn’t be more excited to partner with TIKR.

***Disclaimer: Nothing you hear on this podcast is in any way, shape or form to be construed as investment advice. The guest on this podcast may hold positions in any/all names mentioned during the podcast. This is not investment advice and investors should always conduct personal due diligence before investing in any security. Past performance of any funds mentioned are not indicative of future returns.***

Unity Software ($U) Deep Dive w/ Aaron Bush, The Motley Fool

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Today I picked Aaron’s brain on all things Unity Software. Aaron Bush is an investor and writer for The Motley Fool. When’s he’s not researching stocks for The Fool, he’s busy working on his other project, Master The Meta, a SubStack dedicated to all things esports and gaming. I’ve followed Aaron on Twitter and read his work regularly.
I wanted him on the show after reading his 5,000 word essay on Unity Software (U). Aaron’s post came days after I published my long Twitter Thread on the company, and I wanted to chat about what he found.

This episode is for those that love deep dives on singular names. We spend nearly the entire podcast discussing Unity’s competitive advantages, potential TAM, future growth opportunities, and potential risks to their bull thesis.

We also discuss the Gartner Hype Cycle and where Unity stands on its graph.

Unity Software Deep Dive Time-Stamp:

  • [1:00] Intro Questions
  • [7:04] What It’s Like To Work at The Motley Fool
  • [10:21] Average Day For Aaron
  • [16:01] Unity Software Breakdown
  • [24:05] Unity Take Rate Analysis
  • [28:19] Gaming First Company
  • [38:02] Measuring Success at Unity
  • [41:24] Unity Operating Results & Metrics
  • [51:43] The Gartner Hype Cycle
  • [59:01] The Verdict on Unity

If you liked this conversation and want to learn more about Aaron and The Motley Fool, check out these links:

Disclaimers

This episode is brought to you by TIKR. Join the free beta today at TIKR.com/hive. They’re constantly releasing new updates that make the platform better including a new Business Owner Mode that hides share count, market cap and enterprise value. I couldn’t be more excited to partner with TIKR.

***Disclaimer: Nothing you hear on this podcast is in any way, shape or form to be construed as investment advice. The guest on this podcast may hold positions in any/all names mentioned during the podcast. This is not investment advice and investors should always conduct personal due diligence before investing in any security. Past performance of any funds mentioned are not indicative of future returns.***

Cyclical Stocks and a New Idea w/ Alex Jones, Porter Street Research

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This episode is brought to you by TIKR. Join the free beta today at TIKR.com/hive. They’re constantly releasing new updates that make the platform better. I couldn’t be more excited to partner with TIKR.

Disclaimer

Nothing you hear on this podcast is in any way, shape or form to be construed as investment advice. The guest on this podcast may hold positions in any/all names mentioned during the podcast. This is not investment advice and investors should always conduct personal due diligence before investing in any security. Past performance of any funds mentioned are not indicative of future returns.

My guest this week is Alex Jones. No, not that Alex Jones. Alex is an independent investment consultant working with hedge fund/institutional clients. He started his investing career at Cambridge Associates. After a stint there, he moved into a money manager role for an Endowment. It was here Alex got his first taste in asset management and investment/investor allocation.

From there, he worked as an analyst for author and investor Chris Mayer.

Our conversation dives deep into industrial and cyclical stocks. We cap the discussion with Alex’s latest investment idea: Orion Engineered Carbon (OEC). Alex shares what he learned from his 43-page deep dive on the company, and why it might be a great idea over the next 5-7 years.

Here’s the time-stamp:

  • [1:10] Who is Alex Jones & How He Got Started Investing
  • [4:05] What It’s Like Being Chris Mayer’s Analyst
  • [7:53] Making The Plunge To Independent Research
  • [14:41] Alex’s Favorite Accounting Books
  • [20:21] How Alex Finds Stocks
  • [27:05] Why Casual Dining Restaurants Are Terrible Investments
  • [32:54] Why Alex Likes Cyclical, Hairy Businesses
  • [34:26] Deep Dive: Orion Engineered Carbon (OEC)
  • [46:42] Navigating Commodity Risks
  • [54:06] Thinking About Replacement Value
  • [59:01] Specialty Carbon Black Value Proposition
  • [71:15] What Are The Insider Incentives?
  • [76:09] Valuation Process
  • [83:33] Risks w/ OEC
  • [91:04] Where To Find Alex & Closing Questions

If you want to learn more about Alex, check out the links below:

Ep. 36: Micro Cap Mastery & Unit Economics w/ Connor Haley, Alta Fox Capital

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This episode is brought to you by TIKR. Join the free beta today at TIKR.com/hive. They’re constantly releasing new updates that make the platform better. I couldn’t be more excited to partner with TIKR.

Disclaimer

Nothing you hear on this podcast is in any way, shape or form to be construed as investment advice. The guest on this podcast may hold positions in any/all names mentioned during the podcast. This is not investment advice and investors should always conduct personal due diligence before investing in any security. Past performance of any funds mentioned are not indicative of future returns.

Connor Haley is the founder and managing partner of Alta Fox Capital. If you haven’t heard of Connor Haley, here’s a few highlights:

  • Graduated Harvard University
  • Founded Alta Fox Capital in 2018 and has generated (to date) 40% gross annualized returns
  • #1 Micro Cap Investor on Micro Cap Club

Connor is a fantastic investor and great business thinker. He focuses all his attention on the fundamental unit economics of business, as well as what makes for a lasting competitive advantage.

He fishes in overlooked areas (small-micro cap stocks) and routinely hunts overseas in search of attractive IRRs.

We spend an hour diving into the nuances of business fundamentals, unit economics and why Connor rarely does a DCF model.

Time-Stamp

  • [1:36] Intro Questions
  • [7:12] Traditional Education & Self-Taught Investors
  • [13:36] Lessons From The Best Chess Players
  • [17:21] Skewed Institutional Incentives
  • [19:56] Top-Ranked Micro Cap Club Member
  • [22:17] Connor’s 3-Pronged Strategy During COVID
  • [27:17] Understanding How Competitors Compete
  • [28:41] The Power of Unit Economic Analysis
  • [34:44] Asking Questions Like An Owner
  • [39:52] Stop Worrying About P/E Ratios
  • [47:11] 3-5 Year Time Horizons & Multiples
  • [51:35] Connor’s Q2 Letter & Highlights
  • [55:05] Don’t Focus on the Market Narrative
  • [59:47] Looking International For Ideas
  • [60:00] Closing Questions

If you’re interested in learning more about Connor Haley and Alta Fox, check out the following links:

gautam baid

Ep. 35: Gautam Baid – Compounding Knowledge, Investments and Passion

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We all want compounding knowledge, investments and passion in our lives. Our guest this week, Gautam Baid, shows us how to do that.

Gautam Baid, CFA, is portfolio manager at an SEC-registered investment advisor based in Salt Lake City, Utah. Previously, he served at the Mumbai, London and Hong Kong offices of Citigroup. He also worked at Deutsche Bank as senior analyst in their healthcare investment banking teams. Gautam Baid is a CFA charterholder and member of CFA Institute. He was profiled in Morningstar’s Learn From The Masters series in 2018-2019. 

During our chat we discuss passion, flexible thinking and why P/E ratios aren’t everything.

Time-stamp:

  • [1:02] Intro Questions
  • [7:30] Gautam’s First Role as Portfolio Manager
  • [8:45] Resilience & Persistence as a Superpower
  • [14:01] Writing The Joys of Compounding
  • [20:48] The Feynman Technique of Learning
  • [22:45] Using The Feynman Technique for New Stocks
  • [31:25] P/E Anchoring Bias
  • [39:05] The Erosion of Brand-Name Stocks
  • [46:10] Why You Should Journal
  • [51:05] Investor Biases & How To Tell if You’re Wrong
  • [61:21] Insatiable Curiosity
  • [64:57] Closing Questions

I loved this conversation. It went outside investing and focused on an individual’s pursuit of personal excellence. This idea of compounding knowledge and passion applies to every area of our lives. 

Gautam lived his own Pursuit of Happiness movie during the early stages of his career. Baid showed that with passion, anything is possible. I know, it sounds cliche. But it’s true! It’s amazing what can happen when you commit to something. Whether that something is trading, marriage or a fitness routine.

Reflection

Here’s some personal questions I’m asking myself after chatting with Gautam:

  • What would it look like if I fully committed to my passions?
  • What/Who is stopping me from achieving success?
  • Do I fully understand the power of compounding outside the investment community?

Thanks again for listening. Let me know what guest I should have on the show next!

Learn More About Gautam Baid

Want to learn more about Gautam? Check out these resources:

Episode 34: How To Find Long-Term Winners Early w/ Turner Novak, Gelt VC

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This episode is brought to you by TIKR. Join the free beta today at TIKR.com/hive. They’re constantly releasing new updates that make the platform better. I couldn’t be more excited to partner with TIKR. I use it every single day. Alright, back to the podcast.

Turner Novak is a venture capitalist and partner at Gelt VC. Turner came from a single-parent, low-income household and worked his way to becoming one of the more popular venture capital thinkers on Twitter today. Through hard work and sharing his thoughts online, Turner began finding his venture voice.

But it wasn’t until Turner created his Fantasy VC portfolio that he got past the hurdle of people taking him seriously.

Turner and I chat about strategies as a venture capital, how VC is different from public markets, key man risk and attaching numbers to narratives in valuation.

Here’s the topic timestamps:

  • [1:11] How Tuner Got Started in Venture
  • [6:40] Strategies as a Venture Capitalist
  • [13:50] How VC Is Different From Public Markets
  • [25:50] Elon Musk & Key Man Risk
  • [27:15] Turner’s Fantasy Portfolio & How He Found His Fantasy Investments
  • [36:20] Attaching Numbers To Narratives
  • [46:00] Child-Care as An Attractive Industry
  • [51:32] Three Industries Turner’s Excited About
  • [57:00] Building Businesses Off Existing Platforms
  • [60:05] Closing Questions

If you like what you heard from Turner, make sure to follow him on Twitter @TurnerNovak. Also, make sure to subscribe to his Substack newsletter (here).  Finally, find out what Turner’s doing over at Gelt VC.