Latest / The Dutch Investors / #102 | Interview w/ Compound with René on Quality Investing, AI Workflows, and Market Psychology

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#102 | Interview w/ Compound with René on Quality Investing, AI Workflows, and Market Psychology · The Dutch Investors

0:03
SPEAKER_00: Do you think we're in an AI bubble?
0:06
SPEAKER_02: Yeah, I don't know.
0:07
SPEAKER_02: As I said, my common sense tells me yes, but the data isn't backing that up so far.
0:14
SPEAKER_02: I think it enables you to look at the world through different lenses.
0:20
SPEAKER_02: But I'm not sure how many people truly understand what quality is.
0:23
SPEAKER_02: And to be fair, the definition of quality may also depend a little bit on your goals.
0:45
SPEAKER_00: Welcome back to a brand new episode here at the Dutch Investors Podcast.
0:49
SPEAKER_00: Today we're diving into the world of compounding, analyzing businesses, perhaps mental models and how to find quality businesses.
0:59
SPEAKER_00: And to help us do just that, we've got a very special guest today, René, the founder behind Compound with René.
1:07
SPEAKER_00: And in this episode, we're going to talk about his journey, how he finds and filters quality companies, how he researches and how he uses AI in his workflow today.
1:18
SPEAKER_00: Welcome Renee.
1:19
SPEAKER_00: It's uh nice to meet you.
1:20
SPEAKER_00: We already talked briefly before we started.
1:23
SPEAKER_00: Thank you for coming on the show, and uh I really appreciated you taking the time to do this on your holiday.
1:30
SPEAKER_02: Yeah, yeah.
1:31
SPEAKER_02: Hi hi there.
1:32
SPEAKER_02: First of all, thank you for for inviting me.
1:34
SPEAKER_02: And yeah, I don't know, I just love talking about business and and investing.
1:38
SPEAKER_02: So happy to allocate one or two hours of the day to to having a nice chat with you.
1:42
SPEAKER_00: Yeah, you're in Spain, right?
1:44
SPEAKER_00: So uh you should enjoy this.
1:46
SPEAKER_00: Yeah, Mallorca.
1:47
SPEAKER_00: Oh Mallorca.
1:48
SPEAKER_00: You should enjoy the sun after this, yeah.
1:50
SPEAKER_00: I will, I will.
1:51
SPEAKER_00: All right.
1:51
SPEAKER_00: Well, before we uh start talking about all the the heavy stuff, fundamental research and uh and anything related, maybe start with a quick uh warm-up game just so we can sort of figure out what sort of investor or uh or person you are.
2:06
SPEAKER_00: So just answer with with the first thing that comes to mind, but you can only pick one.
2:12
SPEAKER_00: Okay.
2:13
SPEAKER_00: You had to pick uh a portfolio.
2:15
SPEAKER_00: Would you like a fully concentrated portfolio of five companies or more diversified 20 plus companies?
2:22
SPEAKER_00: Five companies.
2:24
SPEAKER_00: A great business at a fair price or a fair business at a dirt cheap valuation?
2:30
SPEAKER_02: That's a tough one.
2:31
SPEAKER_02: I I'm definitely leaning to the the better business at a fair price, but like it's an either-or, sorry.
2:37
SPEAKER_02: I don't I don't feel comfortable with either, but I'll go with the the first one I think was.
2:40
SPEAKER_00: Let's say you could only read 10Ks or you could only listen to earnings calls.
2:47
SPEAKER_00: Which one would you rather read or listen to for your uh informational edge as an investor?
2:54
SPEAKER_02: That's a that's a very good one.
2:57
SPEAKER_02: Probably the 10k.
2:58
SPEAKER_02: I will say, however, like my first reaction was and the introductory remarks, some of the most important metrics are shared by the management too.
3:06
SPEAKER_02: So I don't know, revenue margins and so on and so forth, that you primarily want to find in the 10k.
3:11
SPEAKER_02: And then oftentimes the more uh insightful parts actually in the Q ⁇ A section of the earnings cost, right?
3:17
SPEAKER_02: And that is something you don't really get from the formal layout of the 10k.
3:21
SPEAKER_02: But I think ultimately if I had to pick one, the 10k still includes more more relevant information that I need.
3:28
SPEAKER_00: Yeah, yeah.
3:29
SPEAKER_00: I I think I would have to agree, yeah.
3:32
SPEAKER_00: Yeah, but it's a great question, actually.
3:34
SPEAKER_00: This is going to be a difficult one.
3:36
SPEAKER_00: Even more difficult, yeah.
3:37
SPEAKER_00: Buffett or Munger?
3:39
SPEAKER_00: Who do you like more?
3:40
SPEAKER_02: I I guess you're asking about the investing cell, right?
3:43
SPEAKER_02: And I would say I would say I'm I'm more in sync with with Munger, with this quality focus, which which Buffett has been quite vocal about himself, that he has it has been a big influence for him.
3:55
SPEAKER_00: What do you find harder?
3:56
SPEAKER_00: Selling when you're down massively on a stock or buying when you're massively up on a stock?
4:02
SPEAKER_00: Oh wow, that's also a tough one.
4:05
SPEAKER_02: Um probably the buying when the stock is high.
4:08
SPEAKER_00: Yeah, it's hard to average up, right?
4:10
SPEAKER_00: For the feeling.
4:11
SPEAKER_00: Yeah.
4:12
SPEAKER_02: Yeah.
4:12
SPEAKER_02: Yeah.
4:13
SPEAKER_02: Even though that's definitely a skill you should acquire over time.
4:16
SPEAKER_02: I think we have this tendency of buyers to only buy stocks when it's cheaper than it was previously.
4:23
SPEAKER_02: More often than not, that's maybe not the best advice you you can get.
4:26
SPEAKER_00: Yeah, it's more of anchoring to the price you bought, right?
4:29
SPEAKER_00: Yeah.
4:30
SPEAKER_00: Yeah.
4:31
SPEAKER_02: Android or iOS?
4:33
SPEAKER_02: Oh I am I'm a heavy Apple user, so that's an easy one.
4:36
SPEAKER_00: Oh, oh, we're not going to be friends.
4:39
SPEAKER_00: I can already tell.
4:40
SPEAKER_00: All right, uh, last one.
4:42
SPEAKER_00: Do you think the current AI spending, and we'll go deeper into it later, but do you think the current AI spending is rational?
4:51
SPEAKER_02: Yeah, that probably also requires sort of a longer answer.
4:55
SPEAKER_00: Um, I guess the the best answer quick yes or no, and we'll go deeper later.
5:00
SPEAKER_02: Yeah.
5:00
SPEAKER_02: I I'll just say I I I would prefer going with manga again, where I would say uh I just don't know.
5:06
SPEAKER_02: Um all right.
5:10
SPEAKER_02: But but that's not a con convincing one.
5:12
SPEAKER_00: Yeah, we'll we'll pick your brain later.
5:14
SPEAKER_00: Now um now that we're uh we're warm, uh let's take a step back for a second.
5:19
SPEAKER_00: Most people uh know you already, maybe.
5:22
SPEAKER_00: Uh maybe some of you uh of the listeners don't.
5:25
SPEAKER_00: Uh you write for uh Substack, uh compound with Renee.
5:30
SPEAKER_00: Uh you also have a YouTube channel, uh you post on X.
5:34
SPEAKER_00: What is it about investing that you find so interesting?
5:38
SPEAKER_00: Why do you spend so much time on it?
5:41
SPEAKER_02: That's also tough to answer, I feel like, because I think what's important to do in life, and and I'm giving more general life advice, and I'm only 36, so maybe you should take that with a grain of salt too.
5:52
SPEAKER_02: But I think what's important in life is to do or to try a lot of different things, like different hobbies, different sports, and uh reading, cultural, creative things.
6:01
SPEAKER_02: And what I found is sometimes you get very excited about something um early on, but over time you lose interest.
6:09
SPEAKER_02: Maybe do something for a year or two and then you lose interest.
6:12
SPEAKER_02: Like I don't know, maybe two anecdotes here.
6:15
SPEAKER_02: I remember as a probably teenager, maybe was 12, 13 years old, I was um asking my dad for a basketball rim all the time, and he didn't want to have one mounted on the wall because obviously it's a permanent thing, right?
6:27
SPEAKER_02: But I I kept bothering him, eventually got one, and then I maybe played for one year and then I lost interest in it.
6:34
SPEAKER_02: Or before I did the other example was before I did um finance YouTube content, I actually published a couple of travel videos too.
6:41
SPEAKER_02: So I had all the equipment, uh DJI drone, uh DSLR camera, and so on and so forth.
6:47
SPEAKER_02: And I did that also probably for a year, maybe 18 months, but then I I I I just lost interest.
6:54
SPEAKER_02: And with stock investing, it's been different.
6:57
SPEAKER_02: I can't really tell you why, but I never lost interest.
6:59
SPEAKER_02: I've I've been doing it for like nine years roughly now.
7:02
SPEAKER_02: I've been creating content for six years, which is still a lot of fun, and that doesn't feel like work.
7:07
SPEAKER_02: And I guess that's why I'm willing to sit down with you while on holiday to just chat about a couple of business ideas.
7:13
SPEAKER_02: Um yeah, maybe not a very concrete answer, but I I can tell you what it is.
7:20
SPEAKER_02: What's important is that I just didn't lose interest at any point in time.
7:24
SPEAKER_02: And I and I think about investing every single day.
7:26
SPEAKER_02: I don't know, like I like I wake up, I think about it.
7:29
SPEAKER_00: Yeah, I mean uh you don't have to tell me twice.
7:31
SPEAKER_00: I feel very uh relate I can relate.
7:34
SPEAKER_00: It might it might have to do with like a personality trait we maybe both have, where yeah, I would say I'm uh as an educator, I'm just fascinated by things I don't understand or I things I want to learn, and I just find the world fascinating as as well, like how things work together and why people do the things they do, and um I love history and stuff, and uh I would say I'm a lifelong learner, and maybe you are too.
8:05
SPEAKER_00: So I'm always thinking, if it's not about investing, I'm always thinking about what else can I do?
8:10
SPEAKER_00: What else can I learn?
8:11
SPEAKER_00: What book can I read next?
8:12
SPEAKER_02: Uh so I would say, and that's very much related to the point you just made.
8:18
SPEAKER_02: Uh I think it enables you to look at the world through a different lens.
8:22
SPEAKER_02: Because you're definitely more up to date with a lot of the developments that are happening in business and in tech and AI and so on and so forth than you would be if you would not be involved in in the investing side of things.
8:33
SPEAKER_02: Because take AI, for instance, it's basically affecting every business in the world, and so you have to be up to speed with what's going on here.
8:39
SPEAKER_00: Do you read um different uh like I I remember Munger always said that you should read and learn multiple fields and learn and apply multiple uh points of view?
8:52
SPEAKER_00: Yeah, is that something you do as well?
8:55
SPEAKER_02: No, I would say that's all your weakness I have.
8:57
SPEAKER_02: I actually don't read all too much these days.
8:59
SPEAKER_02: Like while I'm all at a read a novel here and there, uh, but I also don't really read many investing books uh anymore these days because um at the risk of this sounding maybe arrogant, I hope it doesn't, but uh there's not really anything new in there in most books, and it's often just rehashed concepts, maybe framed differently.
9:17
SPEAKER_02: And I feel like just studying businesses, like individual businesses, um like the return on on time spent is is higher there.
9:26
SPEAKER_02: Um there there's probably, as you alluded to, more value in reading books outside of the investing realm, but I read so much in my job, and then for for the blog and everything, I just can't make myself read things on top of that.
9:39
SPEAKER_02: But I I guess I guess that's also one of the the beauties of Substack.
9:43
SPEAKER_02: I I do find myself reading uh Substack blogs from different domains every once in a while that I just find very interesting.
9:49
SPEAKER_02: And and podcasts, I guess, too, is another format where you get in touch with concepts outside of the investing spectrum.
9:56
SPEAKER_02: And I do find myself listening to non-investing related podcasts every once in a while.
10:02
SPEAKER_00: Do you remember what the first company was you bought, their first stock you bought?
10:07
SPEAKER_02: I think it might be the uh the German chemicals company Bayer.
10:12
SPEAKER_02: I think it was this one.
10:13
SPEAKER_02: Uh followed closely by uh Michael Kors, who was named Diplom back then.
10:18
SPEAKER_02: So that must have been in I think too late 2017.
10:22
SPEAKER_02: And and I think in in early 2018, if I remember correctly, we also had a bit of a a drawdown and in many quote-unquote tech names.
10:30
SPEAKER_02: I think the next one was Apple, which going back to a point we discussed earlier, I sold way too soon.
10:36
SPEAKER_02: I think that one would have done very well for me if I just kept it in my portfolio ever since.
10:41
SPEAKER_00: I assume you sold uh the other two as well.
10:44
SPEAKER_00: Yeah.
10:45
SPEAKER_00: Alright.
10:46
SPEAKER_00: Has your uh personal investing style uh changed a lot since you started investing?
10:53
SPEAKER_02: I would say not so much.
10:54
SPEAKER_02: I feel like most people I talked to, they go through these rather radical evolution, well evolutionary steps over time where they start with, I don't know, dividend investing and then maybe even a trading strategy and only later get to more fundamental-based investing.
11:08
SPEAKER_02: Yeah.
11:09
SPEAKER_02: Um, I would say one of the first investing books I read was Good Stocks Cheap by um I think he's called Kenneth Marshall.
11:17
SPEAKER_02: I think it's a book that's not very well known, uh, but that's very much a quality-focused uh book in and of itself.
11:24
SPEAKER_02: And I would say I I I early on, luckily, uh I would argue, um, had a lot of exposure to a quote unquote quality investing style.
11:33
SPEAKER_02: Um, but I would say, of course, over time you you have to adapt and make changes.
11:38
SPEAKER_02: So uh that book that I just referenced for instance, um, it stresses the importance of buying good companies.
11:44
SPEAKER_02: Like it's called good stocks cheap, right?
11:47
SPEAKER_02: But it also basically recommends to buy stocks at very low multiples, which I think it's nothing wrong with, but sometimes you can buy a optically expensive looking stock that is still cheap.
11:57
SPEAKER_02: So definitely uh moved away from that a little bit.
12:00
SPEAKER_02: Or more recently, maybe over the last 12 months or so, I've become more open to the idea of adding uh some technical analysis to my investing and thinking more about optimal entry and exit points.
12:13
SPEAKER_02: So I would say that's not still not a big part in my investing philosophy, but I've become more open to the idea of adding that as well.
12:21
SPEAKER_02: So, long story short, I feel like it's important to always remain open-minded and be willing to adapt and make uh adjustments or refinements as you come across concepts that you think will bring your overall framework to a higher level.
12:36
SPEAKER_00: Hmm.
12:36
SPEAKER_00: Interesting.
12:37
SPEAKER_00: I might come back to the technical part later.
12:39
SPEAKER_00: But um your uh your sub stack is uh is great, it's uh it's mostly about uh trying to find quality companies.
12:48
SPEAKER_00: I think uh we have some overlap there.
12:51
SPEAKER_00: It's sort of become a buzzword quality companies, quality investing, since I guess everybody is sort of looking for quality companies.
12:59
SPEAKER_00: Uh but uh but let's try to define quality.
13:03
SPEAKER_00: So, what does quality mean to you?
13:06
SPEAKER_00: Perhaps you could share some of the traits you're looking for in these so-called quality businesses.
13:12
SPEAKER_00: I'm just um sort of trying to yeah, define what people mean with quality businesses.
13:20
SPEAKER_02: Yeah, and I think that's a great question because you could probably ask 10 people what they or how they would define a quality business, and you might get 10 different answers.
13:30
SPEAKER_02: So I feel like it's a term thrown around very widely and and easily, but I'm not sure how many people truly understand what quality is.
13:38
SPEAKER_02: And to be fair, the definition of quality may also depend a little bit on your your goals.
13:43
SPEAKER_02: So I think um that that sort of is a variable to consider too.
13:47
SPEAKER_02: To me, I would say a quality company is one that compounds intrinsic value at a very high rate, at a very satisfying rate.
13:56
SPEAKER_02: And usually that only happens if a company has some kind of structural advantages.
14:00
SPEAKER_02: I think that's a concept very well understood, a mode as Dachard called it, that enable it to earn a high return on reinvested capital for a long period of time.
14:10
SPEAKER_02: Because I think one key insight you you need to have over time as an investor is that capitalism is incredibly brutal.
14:17
SPEAKER_02: And unless you have strong structural advantages, competitors will come to you if you post spectacular numbers, like high growth, high return investment capital.
14:27
SPEAKER_02: This will naturally attract competition like like light attracts uh uh bees or or flies.
14:34
SPEAKER_02: So I I just talked about the ability to reinvest at high rates.
14:38
SPEAKER_02: I think I recently listened to a podcast with Pat Dorsey, and he he just stressed again what what I would underwrite 100% as well.
14:45
SPEAKER_02: To me, quality really means that you have a company that ideally can reinvest 100% of its free cash flow into business projects where it earns a very high rate of return.
14:57
SPEAKER_02: Because that is something I feel like many people also don't truly understand is where's growth coming from?
15:03
SPEAKER_02: Basically, growth is the output of reinvestment rate multiplied by the return on invested capital that you earn on your incremental um invested capital.
15:12
SPEAKER_02: So the higher both are, the higher your growth.
15:15
SPEAKER_02: Even though I think there's some some nuance to that, I feel like too high growth might even be a red flag because that's oftentimes not sustainable, but that's another subject to discuss.
15:24
SPEAKER_00: When you look at these companies, um you're looking for uh for these quality companies.
15:30
SPEAKER_00: Are you what sort of things do you screen for or look for?
15:33
SPEAKER_00: Do you I mean not all revenue growth is equal, not uh margins can be sort of like uh skewed where um where margins can be significantly higher than they're reporting or lower uh being inflated.
15:48
SPEAKER_00: So yeah.
15:49
SPEAKER_00: Can you give me like a like a list of things you try to look for when you uh search for these uh businesses?
15:56
SPEAKER_02: Yeah.
15:57
SPEAKER_02: So early on, I actually um basically noted down a framework I have.
16:02
SPEAKER_02: And I I turned that that's another story, but basically I've like call it two or three books where I've uh written out everything um that describes how I invest.
16:12
SPEAKER_02: And in it, of course, I also had like a screening process.
16:15
SPEAKER_02: So, how do you filter ideas very quickly?
16:17
SPEAKER_02: Because I think that's actually one of the most important skills you have to develop as an investor, where you look at a hundred ideas and you can get rid of 99 of them in in less than a minute, maybe in 10 seconds, because something just signals to you that one is not for me.
16:32
SPEAKER_02: And I would argue that there are actually some uh qualitative steps I I start with.
16:37
SPEAKER_02: So the first thing I would actually do usually, um, it's not like I I strictly stick to it step by step, but if I were to formalize it, I would actually first read a brief business description if I'm not familiar with the company already.
16:50
SPEAKER_02: And then I would filter for two things.
16:51
SPEAKER_02: Uh, first of all, do I think I'm I'm capable of understanding the business?
16:55
SPEAKER_02: Like tell take the the current run of of uh the semiconductors industry, for instance.
17:03
SPEAKER_02: I don't think I can can find an edge in that space because that's just way out of my my circle of competence.
17:10
SPEAKER_02: So first filter, do I see myself understanding the business if I put in the work?
17:15
SPEAKER_02: And then over time you develop some um intuition or I guess pattern recognition in terms of the structural advantages I just talked about.
17:23
SPEAKER_02: I don't know, you could point sense highlight is is is the company ultimately selling a commodity or is it selling a very differentiated product?
17:31
SPEAKER_02: Does the company possibly benefit from network effects and so on and so forth?
17:35
SPEAKER_02: And I would say if I if I can answer both of these questions with a yes, I would then take a glance at a couple of of um quantitative metrics.
17:44
SPEAKER_02: Like you you mentioned, growth, for instance.
17:46
SPEAKER_02: I don't know, if if I take a look at the 10-year revenue chart, for instance, and see that revenue is flat, I might I might um filter that idea out right away, even though that's just the path, right?
17:57
SPEAKER_02: Maybe there's something you would find once you put in the qualitative work that would um indicate that going forward growth may actually reoccur.
18:05
SPEAKER_02: But I think you just have to be ruthless in your filtering, and obviously you will uh cancel ideas that might actually be very interesting, but you have to have some filters in place that uh give you a more manageable list uh of all yeah, and everything is nuanced because even like if you would look at Hermes, for example, there's a reason they just grow between 8 and 15 percent annually.
18:31
SPEAKER_00: They don't want to grow faster, they want to keep this going for 50 years.
18:36
SPEAKER_00: So if you would see Hermes growing 200% in a year, that's actually could actually be a red flag where they just keep the volume, uh increased volume like uh massively.
18:46
SPEAKER_00: Uh so uh it's difficult to narrow one into like a a fixed set of you have to look at these five trades and then you'll find a quality company.
18:55
SPEAKER_00: If it was that easy, everybody would be uh pretty rich, right?
18:59
SPEAKER_00: Yeah, yeah.
19:00
SPEAKER_02: I will also say I think um the way you approach it might also vary depending on how long you have been investing for.
19:07
SPEAKER_02: Because if you've been doing it for a long period of time, uh you might have already built a watch list of companies that fit your profile.
19:14
SPEAKER_02: And I would even argue, let's say you have a an investable universe of you identified 150 to 200 high-quality companies, I think that may actually be enough to outperform the market.
19:24
SPEAKER_02: So only drag those 200 stocks, and whenever one or two of them encounter some kind of event that really drops the share price, you can go in and do the work and see whether that share price drop is justified or not.
19:37
SPEAKER_02: And then you might only sporadically look at new ideas.
19:40
SPEAKER_02: And it's different, of course, when you start out and don't have that mental database of businesses that fit your profile yet.
19:47
SPEAKER_02: Yeah.
19:47
SPEAKER_00: So you mentioned technical analysis, or at least taking it, uh taking it into consideration when entering or exiting uh positions, I guess.
19:57
SPEAKER_00: What does that actually look like in your process?
20:00
SPEAKER_00: I would assume you're mostly a fundamental investor.
20:03
SPEAKER_00: So where do these charts uh end and fundamental research sort of begin for you then?
20:10
SPEAKER_02: Yeah.
20:10
SPEAKER_02: Let me give you a more more general answer here without getting into the the technical details of it because it's not it's not overly complicated, but I want to maybe first frame what that is about.
20:20
SPEAKER_02: I feel like a lot of uh call them OG value investors have been quite vocal about the fact that they think the environment they are operating in has changed, where actual value, like quote unquote value of a business, as in the stock is trading below its intrinsic value, is neglected by the market for longer, if that makes any sense.
20:45
SPEAKER_02: So you you could throw in the tramp catalyst here that there is a risk in investing if you buy a stock that clearly that's a subjective call, but let's just say it's objectively very cheap relative to its intrinsic value, you might buy that stock.
21:00
SPEAKER_02: And oftentimes you you do that, and I think that's a bias already too, with the anticipation that oh now I'm an owner, now the market needs to recognize that disconnect.
21:10
SPEAKER_02: And I feel like it's true that in the current environment, the fundamentals do not necessarily matter as much as they did historically.
21:18
SPEAKER_02: And I think therein lies the risk.
21:19
SPEAKER_02: So I think it's worth thinking about how a stock and a and a business is perceived in the current environment, like or maybe also generally.
21:28
SPEAKER_02: And oftentimes you like I myself at least I would find myself buying companies that are perceived very negatively because they uh face some kind of issues.
21:38
SPEAKER_02: And I think it's worth asking why may that perception change and when.
21:44
SPEAKER_02: And oftentimes looking at the chart may give you clues there.
21:48
SPEAKER_02: So I feel like that is something a lot of uh die hard value investors struggle with, and they might even be triggered by the statement I made.
21:55
SPEAKER_02: But let's say I think momentum is a very powerful force, actually, and you can buy.
22:00
SPEAKER_02: Stock that is clearly very cheap, but it can go down another 30% because the stock has so much negative momentum.
22:05
SPEAKER_02: And thinking about that, I think it's definitely worthwhile.
22:09
SPEAKER_02: Because you can buy a stock that is, let's call it, 40% trading 40% below its intrinsic value, or maybe you could buy it at 60% below its intrinsic value half a year later, and to your long-term returns, and we assume the gap eventually closes, that makes a hell of a difference.
22:26
SPEAKER_02: So you could just say, well, I I I just buy it cheap and over the long term things will work out.
22:31
SPEAKER_02: But I think you are neglecting one of the key um barriers that enable you to earn alpha, which is timing.
22:40
SPEAKER_02: And I I would have underwritten the idea that you cannot time the market uh consistently for the most part of my investing life.
22:48
SPEAKER_02: And I changed my perception a little bit in terms of the timing of entry and exit points in individual stocks where yeah, there's a lot of noise in technical analysis, but at least thinking about it and trying to find entry points that are closer to the top or bottom, and that has a lot to do with sentiment analysis too, which is a bit of a qualitative art and necessarily like a technical analysis, like chart analysis.
23:14
SPEAKER_02: Yeah, I realize I'm rambling a little, but then I'm just sharing how how I'm changing my thinking a little bit.
23:20
SPEAKER_00: No, no, no, it's uh it's it's good.
23:21
SPEAKER_00: We haven't had many people talk about it, and uh now that you mention it, it it makes sense, right?
23:30
SPEAKER_00: Where people are uh creatures of habit and um technical analysis works because so many people see the same chart, and when they all see like the same support, it sort of has like this floor where a lot of people start buying and it actually becomes like momentum and the moment it keeps going.
23:48
SPEAKER_00: So I'm not I'm no expert here.
23:50
SPEAKER_02: So uh I mean and I I would say me neither, and I will also say that old habits die hard, so that is sort of a process that I think I'm I'm working through myself, but I'm just bringing it up because I think you should be open to the idea of adapting your process over time.
24:05
SPEAKER_02: If you find something that does make sense to you and you don't think it's it's nonsense, why not at least think about it and maybe dabble with it here and there?
24:13
SPEAKER_00: Yeah, can't can't hurt to take it into consideration.
24:17
SPEAKER_00: You mentioned that you think the fundamentals matter less than before.
24:20
SPEAKER_00: Why do you think that is?
24:22
SPEAKER_02: I don't know, it's it's the the market structure in terms of the market participants.
24:26
SPEAKER_02: If fewer and fewer market participants think about intrinsic value and and the fundamentals relative to the share price, well, the price might not reflect that, right?
24:37
SPEAKER_02: You could bring up the the rise of of uh passive investing here, of course.
24:42
SPEAKER_02: I'm I'm not sure about that.
24:43
SPEAKER_02: I remember reading a paper probably two years ago that claimed, I don't remember the title of it, but it quite convincingly, convincingly claimed that price discovery still works as long as we have uh like I think it was like 20 or 30 percent of total assets under management being still actively managed.
25:04
SPEAKER_02: I'm not sure where we are, probably 55% or so is is passively managed these days.
25:09
SPEAKER_02: So that probably plays a big role too.
25:11
SPEAKER_02: Um more and more people giving up on the on the idea.
25:14
SPEAKER_02: Like I imagine it myself.
25:16
SPEAKER_02: Um I would like let me throw in one uh caveat here though.
25:20
SPEAKER_02: I think if you believe in what I try to describe here, I think what becomes more important is placing emphasis on uh the management team because they are the ones that can actually exploit the undervaluation of their own stock, either by buying back uh their own uh stock at a very attractive rate of return.
25:40
SPEAKER_02: So that can be a reinvestment vehicle too, right?
25:43
SPEAKER_02: Aside or besides um internal business projects, or by just issuing a dividend.
25:49
SPEAKER_02: Like if your stock is so cheap that you can pay out, I don't know, 70% of your profits and that turns into a 10% dividend yield, that can be very attractive or also agreeative to to shareholders.
26:02
SPEAKER_02: But but very few managers are uh do that, right?
26:07
SPEAKER_02: So I would I would I I would mention my strong bias towards founders here because I think they are more likely to recognize that and and and trying to exploit that undervaluation.
26:19
SPEAKER_02: You could look, like let me bring up Paycom here.
26:22
SPEAKER_02: I haven't studied that business uh in-depth recently, uh, but you should take a look at their um buyback volume over the last call it 10 quarters or so.
26:32
SPEAKER_02: I think he it's still a founder-led business, and in the last quarter they went absolutely bazooker.
26:38
SPEAKER_02: I don't want to say something wrong here, but I think they bought like 10-20% of all shares outselling in a single quarter.
26:44
SPEAKER_02: I think they even took on depth to do so.
26:46
SPEAKER_02: And I think that's something only a founder can and will do.
26:49
SPEAKER_02: I'm not sure if ultimately that will be a wise decision.
26:53
SPEAKER_02: Um, but I think it's definitely displaying a very high conviction by the founder and the survivability of of PayCon.
27:00
SPEAKER_00: Investing is a game of hindsight, so you all only know uh later whether it's uh a good call.
27:07
SPEAKER_02: But I will say it's it's definitely a very strong signal that should encourage you to take take a closer look.
27:13
SPEAKER_00: Yeah, yeah.
27:14
SPEAKER_00: We've I've been thinking about this a lot lately because um I I recently wrote an article and uh I've done several episodes on um the book The Outsiders.
27:26
SPEAKER_00: Uh I think it's uh it's a very good book.
27:29
SPEAKER_00: But it also made me realize that like the traits that make these great CEOs also have uh can also be red flags.
27:39
SPEAKER_00: Where I mean if if if a if a CEO decides to buy back 10 or 20 percent of its own stock, uh yes, that could definitely be like an outsider signal, but it could also mean it could also be a massive destruction of capital at the same time.
27:56
SPEAKER_00: Founders have the tendency to make independent decisions um and overrule like what the analysts want uh to think long term, but if they make the wrong decision, that could also be a massive mistake.
28:12
SPEAKER_00: So I find it's very difficult to sometimes figure out whether it's it's a signal of a of a good CEO or it could be like a horrible decision.
28:25
SPEAKER_02: Yeah, yeah.
28:26
SPEAKER_02: What what I was thinking of there uh was Zuckerberg and the whole uh metaverse that.
28:30
SPEAKER_02: Yeah, exactly.
28:31
SPEAKER_02: And uh I'm going to say something controversial here, but and I used to be a meta shareholder for a couple of years actually, and it's a world-class business, don't get me wrong here.
28:40
SPEAKER_02: But I'm not convinced that Zuckerberg is a world-class capital allocator.
28:44
SPEAKER_02: The business has done extremely well, there's no denying that, but I feel like he's he's more concerned about his legacy and finally being able to diversify uh meta than maybe the actual RYC of the invested capital.
29:01
SPEAKER_02: And now the listener might think, and and I realized that uh a lot of that capex that was classified as metaverse spending was actually AI related and that very likely earned a decent return.
29:15
SPEAKER_02: But they probably burned a couple of billion on that metaverse idea that they basically spended uh a couple of quarters ago.
29:23
SPEAKER_02: So yeah, there that's attention, I would say.
29:26
SPEAKER_02: Yeah.
29:27
SPEAKER_00: Yeah, but it's difficult because they Zuckerberg sort of have had to try it, um, and it's very similar to the current AI spending, where if you don't do it, you risk falling behind.
29:40
SPEAKER_00: But if you do try it uh and it succeeds, it will pay off massively.
29:46
SPEAKER_00: But even if it doesn't pay off, that means you tried and no one else succeeded, probably, you know.
29:53
SPEAKER_00: So even if all the capital spending from Amazon, uh Google, um, Microsoft results in terrible returns, it basically means that AI wasn't that big of a a threat and they'll still be fine.
30:09
SPEAKER_00: I don't know.
30:10
SPEAKER_00: It's it's it's it's sometimes I break my head over this, yeah.
30:14
SPEAKER_02: Yeah, I recently tweeted about it.
30:16
SPEAKER_02: I'm just looking for it, where I basically highlighted that many of the hyperscalers are in a way in a prismer, prisoner's dilemma that you just described.
30:24
SPEAKER_02: Uh they basically have to take that because their competitors are taking it and they can't afford not being part of that.
30:31
SPEAKER_02: Apple Apple is the odd one out here because they are the only company not not engaging in that AI capex craze.
30:39
SPEAKER_02: Yeah.
30:40
SPEAKER_02: And they I think they just crossed five trillion in market calculation, so maybe there's a signal on that too.
30:45
SPEAKER_02: I don't know.
30:46
SPEAKER_00: Yeah, so e so this is the point I'm trying to make.
30:49
SPEAKER_00: Either Apple will fall massively behind, or they are the outsider, they have the outsider CEO thinking independently and not chasing what everybody else is doing, right?
31:00
SPEAKER_02: So it's sort of um yeah, uh it's I think if we stick with Apple, and again, I haven't researched that business in depth recently, but just looking at it from the outside, I think what they are doing is is very smart because they have the distribution and they can just implement whatever LLM eventually wins into their platform, and then the provider takes a cut, that's fine, but they didn't spend hundreds of billions into developing it and and the infrastructure behind it.
31:28
SPEAKER_02: I think to me, it seems like they are very device here, not not getting involved themselves.
31:34
SPEAKER_00: Yeah, and they have the capital even if they fall behind to have partnerships and uh perhaps jump in later, but um time will tell, right?
31:42
SPEAKER_00: What do you find the most difficult thing about uh investing in uh individual businesses?
31:48
SPEAKER_02: Oh, that's a a tough question.
31:50
SPEAKER_02: I would say as you study a business early on, there's definitely the risk of becoming overconfident in your analysis being correct.
31:58
SPEAKER_02: And I found that the longer I own a company, the more I realize that I actually had big knowledge gaps uh early on.
32:06
SPEAKER_02: Because I would I would argue you only truly know a company if you've owned it for multiple years, because only then you get to truly know the people running it, its strengths and weaknesses, and oftentimes risks may appear that you didn't have on your radar.
32:19
SPEAKER_02: Um yeah, picking individual stocks is tough.
32:23
SPEAKER_02: I think it really humbles you when when when when you get back to the evolution you go through, like you start, you're excited about it.
32:31
SPEAKER_02: I think it's easy to very early on think you you mastered it, but once you start doing it for longer, you realize how tough this actually is.
32:39
SPEAKER_02: And I think most people should should really just invest passively because it's so humbling.
32:43
SPEAKER_02: And also, like if you if you run a concentrated stock, the psychological toll it takes at times is also very high, I would argue.
32:51
SPEAKER_02: That's definitely a tough thing too, and you have to be you have to have the right temperament for that.
32:56
SPEAKER_00: Yeah, I would like uh to dive a little bit deeper into what you just mentioned and uh talk about the way you analyze businesses, how you source these new uh news ideas, and just your research process in general.
33:09
SPEAKER_00: Can you take us like briefly through your research process?
33:12
SPEAKER_00: Let's say you you sourced a company um that looks interesting to you.
33:17
SPEAKER_00: Perhaps you found like an interesting sub-steck article, you used a screener, you I don't know, you used a certain surface on your phone and you found it was publicly listed.
33:28
SPEAKER_00: I don't know.
33:29
SPEAKER_00: Um you mentioned you have sort of a framework you use.
33:33
SPEAKER_00: So I'm curious to hear about uh your research process from maybe start to finish.
33:38
SPEAKER_02: Yeah.
33:39
SPEAKER_02: And when you say framework, you you just mentioned one of very many elements I think you should have in your framework, which is idea generation.
33:46
SPEAKER_02: So I think that itself is something uh worth sitting down and actually think about how do I want to go about that.
33:52
SPEAKER_02: Because again, it that comes down to your style and what works for you.
33:55
SPEAKER_02: Some may find uh spin-offs particularly interesting, and they use that as their main or one of their main idea source channels.
34:03
SPEAKER_02: Uh for others, it might just be accent the many tickers they encounter there by frozen just the feet every single day.
34:11
SPEAKER_02: So there are many, many different ways to uh source ideas, but that's not what you asked about.
34:15
SPEAKER_02: So you asked about, well, let's say a business made it through the initial screening uh process that we discussed earlier, right?
34:21
SPEAKER_02: How do you study the deeper analysis of the company?
34:25
SPEAKER_02: I would say uh my process there has definitely changed over the last two years uh due to the rise of AI.
34:32
SPEAKER_02: Um the way I would go about it these days is I would first try to find all the resources that I think will be of value for my analysis.
34:44
SPEAKER_02: So that would um first and foremost be the uh company first materials, so annual reports, quarterly reports, um training score transcripts, uh proxy statements, some of the uh investing slides they have, um yeah, all the company uh first-hand material.
35:03
SPEAKER_02: Then on top of that, I would look for outside um analysis.
35:08
SPEAKER_02: So that could be substack write-ups, maybe write-ups from uh the Value Investors Club, um, could be podcasts or YouTube videos.
35:15
SPEAKER_02: Um and then I start processing that information.
35:19
SPEAKER_02: So I might might read the latest 10K, I might take a look at the slides, I might listen to a couple of earnings calls, I might listen to take a business breakdowns episode.
35:28
SPEAKER_02: For instance, I I just wrote up um Amadeus IT group, for instance, and they have a fantastic episode on that business, and I think that's a a fantastic starting point to get a very good understanding of what the business actually does.
35:40
SPEAKER_02: What I would do then is I would upload all of that into um a project in Notebook LM.
35:46
SPEAKER_02: I think they they renamed it recently, I think it's called GemNai Notebook or something like that.
35:51
SPEAKER_02: And I then have a very um comprehensive checklist that I want to get answers to.
35:57
SPEAKER_02: So that would cover things like again, understanding the business, its competitive advantages, uh the management team, the balance sheet, um risks, and so on and so forth.
36:07
SPEAKER_02: And getting the answers to these questions with that um notebook LM capability has definitely sped up my process so much because it's just mind-blowing how it surfaces things from the earnings call transcript, for instance, without me having to read the past 12 earnings calls, which would take forever, right?
36:30
SPEAKER_02: Um yeah, and then obviously you layer on that some of your experience and critical thinking, uh, you ask follow-up questions, the whole process um raises questions that you need to find answers to, and then you start digging there.
36:44
SPEAKER_02: Maybe in the whole process you talk to your network and people you that you know that have studied the business or whose input you value, and so on and so forth, and ultimately you would would end up trying to value the business too, which uh is is like a quite cranial process in and of itself, I would argue.
37:02
SPEAKER_00: Are there any like red flags or uh questions you ask that instantly tell you, okay, this uh this company is uh not for me in uh instantly away?
37:12
SPEAKER_02: You mean after it it passed the initial screening process?
37:16
SPEAKER_00: Well for example, when you uh inserted all the um sources into notebook LM or um you're asking, you're doing your uh your due diligence, are there like specific things you look for that just instantly remove the company from your uh potentially investment?
37:35
SPEAKER_00: I don't know.
37:35
SPEAKER_00: For example, a ton of debt, for example, uh an obvious one.
37:40
SPEAKER_02: Yeah.
37:40
SPEAKER_02: I would I would say uh the debt card would have been part of the initial screening process.
37:45
SPEAKER_02: So if the company just carries too much debt, it wouldn't have made the first cut.
37:48
SPEAKER_02: I'm sure there are red flags.
37:50
SPEAKER_02: I can't think of one specifically right away, but think of um management skin in the game, for instance.
37:55
SPEAKER_02: That may not be a red flag, but more of a yellow flag.
37:58
SPEAKER_02: But if if the CEO, like take Amadeus, for instance, which I just just mentioned, it's it's not a red flag in this instance, but the CEO has been with the company for 20 years plus, and guess how big his take in the company is?
38:11
SPEAKER_02: It's like 0.0.
38:13
SPEAKER_02: So that is definitely a big turn off uh for me.
38:16
SPEAKER_02: Um I'm not I'm I wouldn't say it's necessarily like a red flag per se, but it's definitely yellow to orange-ish, for example.
38:25
SPEAKER_02: And I'm sure there are other things that are that may come up in the process that I can't pinpoint right away right now.
38:30
SPEAKER_02: But yeah, I think it's important to keep that attitude of well, I have this idea.
38:36
SPEAKER_02: My actual task now is to identify why that idea is a bad one.
38:41
SPEAKER_02: I think that's basically the classes you should wear when you analyze a company.
38:45
SPEAKER_00: I believe you talked to uh Mostafa from Compound with AI, right?
38:50
SPEAKER_00: He came up with a pretty good technique, actually.
38:53
SPEAKER_00: Uh I I started to use it quite frequently now.
38:56
SPEAKER_00: Indeed, upload all the sources uh to Notebook LM, uh, which is a closed loop system, so it only sources from those materials.
39:04
SPEAKER_00: Have like KPIs or certain things the company tracked or uh things management says over the past 10 years changed in the annual report, in the earnings cost.
39:18
SPEAKER_00: And what it comes up with sometimes is oh, I mean, that would take me days to figure out, like uh having to go back and forth and notebook LM just telling you, oh, they used to track revenue growth and it's now uh adjusted Abaddon margin because it uh enhances the uh I don't know the bonus they get.
39:38
SPEAKER_00: Oh man, it's it's such an incredible system.
39:41
SPEAKER_02: Yeah, yeah, it's a very good point.
39:43
SPEAKER_02: Netflix comes to mind.
39:44
SPEAKER_02: I I think they removed um reporting their subscriber base, right?
39:48
SPEAKER_00: Subscribers, yeah, yeah.
39:50
SPEAKER_00: Which sort of makes sense to be honest.
39:53
SPEAKER_00: Uh I get what you're saying.
39:54
SPEAKER_00: I mean it's the it's the main KPI, but if you start making money from different things besides subscribers, uh like adding family members, uh advertising, uh live shows, it's sort of excuse thing.
40:10
SPEAKER_00: So I I sort of get it, but I believe they recently changed it again, just a couple weeks ago.
40:16
SPEAKER_00: Yeah.
40:17
SPEAKER_02: Yeah, I'm not saying it's a it's a red flag here necessarily, but I would say the exercise you just described is is a very valuable one because it may surface things like that.
40:26
SPEAKER_02: Yeah.
40:26
SPEAKER_02: And then you have to add your critical thinking on top of that.
40:29
SPEAKER_02: You can't let the AI do that for you because it requires so much nuance in in the assessment.
40:33
SPEAKER_02: Because as you rightly pointed out, it may make sense.
40:36
SPEAKER_02: Uh, but I think your your first intuition should be that management may try to hide things that may not develop favorably going forward.
40:45
SPEAKER_00: I'll be I'll be I'll be honest here.
40:47
SPEAKER_00: I've been thinking about my edge as an investor since AI came out.
40:52
SPEAKER_00: It's become a massive part of life uh for us as investors, as um someone who runs a business, uh as an educator.
41:03
SPEAKER_00: It's just become part of um of the world.
41:06
SPEAKER_00: I've been thinking of uh uh switching to uh just tracking the index.
41:11
SPEAKER_00: I always like to think that I have somewhat of an edge, but since AI is here, I feel like I don't have an edge anymore.
41:19
SPEAKER_00: Where there are like three types of edges: an informational edge, analytical edge, and a behavioral edge.
41:26
SPEAKER_00: Like the analytical and the informational edge, I feel like are mostly gone.
41:31
SPEAKER_00: I like information has commoditized.
41:34
SPEAKER_00: Anyone can use AI to come up with like patterns and see things that were so hard to find before.
41:43
SPEAKER_00: Do you do you feel you still can gain an edge as an investor?
41:48
SPEAKER_00: Do you believe like individual stock picking still makes sense in today's day and age?
41:54
SPEAKER_00: I'm just uh curious to hear your thoughts uh because this is something I've been thinking about lately.
42:00
SPEAKER_02: Yeah, I'm not sure if you if if you saw it in your preparation for the episode, but I recently wrote um a longish piece on exactly that concept, the the distinction between edge and skill.
42:11
SPEAKER_02: And it's like a lot of the things I might say now are like very much related to the terminology and very theoretical, but I think it's worth thinking about it.
42:20
SPEAKER_02: Because I think you are right that the skill ceiling in investing has definitely gone up.
42:26
SPEAKER_02: If I imagine what the competition looked like for Buffett in the 60s, I would say it's nowhere close to what the competition and and the average skill you encounter in 2026 is like.
42:38
SPEAKER_02: And I used to play some poker when I was younger.
42:41
SPEAKER_02: And you could have a you could be a very skillful poker player, but if you sit at a poker table with lots of very skillful players, you're not going to make any money.
42:50
SPEAKER_02: Especially if you once you account for the casino or the online casino taking a cut too.
42:54
SPEAKER_02: And I think the same is true in investing.
42:57
SPEAKER_02: So was it manger who said you have to fish where the fish are?
43:00
SPEAKER_02: So that is definitely something to take into consideration here.
43:05
SPEAKER_02: I just talked about the terminology.
43:07
SPEAKER_02: What I've come to realize is that you don't really have an edge.
43:10
SPEAKER_02: Um, and let me explain that.
43:12
SPEAKER_02: Um, what you what you do possess is skill.
43:15
SPEAKER_02: So you might have skill in terms of identifying world-class businesses or being patient might be a skill too, for instance, waiting for the right moments to strike.
43:24
SPEAKER_02: And an edge is more of an external setup that is temporary and well uh comes up every once in a while.
43:33
SPEAKER_02: So as you rightly pointed out, there are different types of edges.
43:36
SPEAKER_02: I would add one there.
43:38
SPEAKER_02: Um that is something that I want I have to give out a shout-out to you to uh Theo Birkhan here.
43:43
SPEAKER_02: He shared it with me.
43:44
SPEAKER_02: He has a debate framework.
43:46
SPEAKER_02: So you have behavioral, analytical, informational.
43:48
SPEAKER_02: You mentioned all those, and you have technical too.
43:51
SPEAKER_02: And so an edge that may come up to Nancy Pelosi is an example I I mentioned in that write-up, for instance, is an informational one because she might have access at a moment in time to information that may enable her to place a trade that you and I wouldn't be able to.
44:07
SPEAKER_02: So the she definitely has an edge there for a brief moment in time.
44:11
SPEAKER_02: I would argue these days uh you can probably the the the best opportunities may come from you ha you finding a a pay behavioral edge where the wisdom of the masses turns into the madness of of the crowd.
44:29
SPEAKER_02: I think that's how how how the saying goes, right?
44:32
SPEAKER_02: Where the market as a whole is just becoming inefficient for a temporary moment in time.
44:38
SPEAKER_02: So I don't know if we take 2020 a COVID seller for instance 35% within eight months that wasn't necessarily rational.
44:46
SPEAKER_02: I'm sure you could make the case but I would argue people were truly panicking back then and that may create a temporary setup where you may have a behavioral edge if you can think 10 years farther out for instance.
44:59
SPEAKER_02: The same can happen on on the way up for instance um I'm not sure if if the market is very efficient right now in in terms of some of the names uh I don't know I'm I'm maybe placing this here as a as a question mark for for the um listener to to think about him or her herself but I feel like if you if you just look at a lot of data points there seems to be a lot of um speculative behavior in many pockets of of the market.
45:25
SPEAKER_02: So that may also be something you you want to exploit by maybe selling some of your stocks that are now very disconnected from the actual intrinsic value but on the upside.
45:34
SPEAKER_00: And I don't know if there's a single answer.
45:38
SPEAKER_00: You know I spend so much time just like you on finding interesting businesses and analyzing them and it's a fun exercise for me as well but I just sometimes wondered whether it's worth the time maybe it's just better to spend your time yeah but but I have another thought here which I wanted to throw in what's really the alternative right now and I want to be very clear about that no investment advice that's just my subjective view of things.
46:06
SPEAKER_02: But most passive indices even take the NSAI world for instance which has world in its name but it's it's massively exposed to the US probably 60 70% of the index is made up of US equities and I feel like US equities specifically as a basket as a group and if you take the the weightings of the individual stocks as well like top 10 make up 30 40 I think 40% of the SP right now right I'm I I'm very skeptical in terms of the returns the SP and also the as a result the MSE world maybe as well over the next 10 years will deliver.
46:45
SPEAKER_02: So take my wife for instance um she's sitting on a on a good amount of cash right now and I don't feel good telling her just put it in the SP which would be something I I would quote unquote recommend her in in other environments.
47:00
SPEAKER_02: But I I I feel like passive investing in these instruments maybe there are other ETFs I'm not aware of I'm I'm sure they are that maybe better suited to to be incredibly diversified and not as heavily exposed to the US but I don't feel good about the um ETFs you would encounter typically once you get your your hands into into passive investing.
47:21
SPEAKER_02: So what's really the option I feel much better about taking a handful of companies that I understand very well that trade at um valuations that don't demand 30% growth forever and and just yeah being being a part owner in these businesses for the next 10 years I feel much better about that than putting my money into the SP yeah Tina right there is no alternative yeah yeah and and I don't know maybe maybe 10 years from now the SP will have delivered another 15% growth yeah but I think that's very unlikely I saw a chart I think was last year that showed that the last 15 years of the indie index's performance was an absolute outlier to the towards the very top if you look at all but rolling 15 year returns studied there I think was a multi decade period that that was looked at in that analysis.
48:13
SPEAKER_02: So I think the odds of that pattern repeating over the next 10 years is low.
48:19
SPEAKER_02: Yeah maybe but I I don't who am I to to tell I'm just sharing my perspective.
48:23
SPEAKER_00: You're a genie you you already mentioned intrinsic value uh a a few minutes ago buffet always made the analogy that um evaluation should be done on like a napkin or uh the back of a beer mat.
48:36
SPEAKER_00: It should be a screaming deal I can remember him saying somewhere in uh the Berkeley meeting.
48:42
SPEAKER_00: Well many of us investors do very complex DTF valuations and Excel sheets different input from a weighted aver average cost of capital and uh margin estimates and revenue growth and anything related I'm curious to learn or hear rather how you value businesses and your thoughts on valuation in general for example do you sell when a company becomes too expensive or do do you just hold on to quality for as long as possible?
49:16
SPEAKER_00: How do you balance all that?
49:19
SPEAKER_02: Yeah great question that probably requires a lot of nuance but let me start with the TLDR answer here.
49:26
SPEAKER_02: I think Buffett is is right.
49:27
SPEAKER_02: I think if all you ever do is buy very good businesses at incredibly cheap multiples, I think you will do very well and I think the best investments I have ever made were certainly the ones that didn't require any model at all where business is just traded at five times earnings, two times free cash flow like really dirt cheap and and you don't need to do any any calculations on top of that I I I feel like when I say good business at a low multiple the term multiple certainly requires some nuance because when I when I think about a multiple I always have things like circletility normalized earnings in terms of a business might not even be profitable right now and or barely profitable and actually trade at 300 times earnings but if I believe the company can get to 20% margins it might trade at a very cheap multiple we mentioned Netflix earlier uh which I owned in the past I can't recall when exactly it was I think it was pretty much when Admin uh sold it if I'm not mistaken and my view back then was I think Netflix was very profitable at that point in time maybe posted 5% TBIT margins if if at all but my view was that a business like Netflix that's a qualitative analysis then uh should post 20% margins at scale and based on that sort of look through margin profile um if I remember correctly I bought the stock at like 10 times operating income and where does Netflix sit now I think they post like 35% E-Bit margins now.
50:56
SPEAKER_02: So my my assessment was actually way off I'm just using that as a as an example to illustrate that the multiple that I have in my mind may not necessarily be the one that this is displayed in your um research terminal because there are other factors you have to take into account like as you know very well current for instance as well that 20 times earnings or even 40 times earnings stock may actually be cheap because the durability of above average earnings and top time crude is is given.
51:28
SPEAKER_02: And then you asked about if I ever sell on on valuation concerns that's probably a weakness I have I remember I owned Etsy for instance probably during the the COVID period I think I bought it like 15 times pre-cash flow um then it shot up to slightly above 30 and never sold and and then it crashed and I think I even sold it slightly below my my cost basis because it never recovered.
51:57
SPEAKER_02: So I'm maybe not the best one in terms of the discipline of selling when a stock is is very extensive.
52:03
SPEAKER_02: Like one holding I have in my portfolio right now for instance is Interactive Brokers which I believe I bought again great business at a low multiple sometimes investing can be that easy I think I bought it at a 12 to 13 times um eBIT multiple or EBT multiple in this instance and that was not based on future margin assumptions that was on surface value the the multiple IBK are traded at right now it's much more expensive like way more expensive.
52:28
SPEAKER_02: I think the stock is up like 500% over the last five years.
52:32
SPEAKER_02: I'm still holding it which might turn out to be a mistake I don't know but to me at least the runway is still massive I think they just reached 5 million accounts on on their platform and I think during some investing conferences they've uh like their north north star of getting to 50 million eventually and I I think that sounds completely unreasonable.
52:54
SPEAKER_02: And if they can get there the starting multiple today doesn't really matter.
52:58
SPEAKER_02: So I think there's a risk in in selling this long-term component now just because the current multiple is high but I don't know and just to wrap up I do more complex validation work so what I do mostly these days is I try to project the five next five years of of revenue growth think about the the margin the company could post in five years and the multiple the market may reward or assign to to the multi to the company in five years and then look well what's the stock price today and what kind of return do they get if these assumptions hold true over the next five years.
53:34
SPEAKER_02: So that's what I usually do.
53:35
SPEAKER_02: And then sorry for for rambling a little bit but then I think your exercise shouldn't stop there but you should should think about different scenarios.
53:43
SPEAKER_02: So what are different revenue keger scenarios that you find feasible margin profiles and exit multiples.
53:49
SPEAKER_02: Yeah.
53:50
SPEAKER_02: And then you sort of sort of just keep track of um the company and whether how close they are to your conservative estimates and just revise them when needed yeah I again that's probably something um I should do more frequently like I I'm really often just like take a IB care for instance.
54:11
SPEAKER_02: I couldn't tell you what kind of multiple the stock is trading at right now because I believe the long-term uh destination for the business is very clear for me and it doesn't really matter.
54:19
SPEAKER_02: I should probably track um the expected return I have for the next five years more closely and more regularly than I should.
54:27
SPEAKER_02: It's not I I I I make that a habit to do that once a quarter, once half a year um but I would say that's maybe a weakness and something I should actually do as I said more more regularly.
54:36
SPEAKER_00: It's good that you identify your own weaknesses so you can work on them but uh I don't know if it's the weakness.
54:41
SPEAKER_00: Sometimes it's better to just leave things yeah yeah I would like to talk a little bit about the elephant in the room AI um Amazon, Google Meta Microsoft all reported earnings uh I believe yesterday and the day uh before cloud and AI spending just keeps going up and up and up um going straight to heaven investors are uh writing full fundamental research papers with AI well as you know schools and uh universities are struggling to keep up and what to do with it um AI is being used in medicine uh war uh insurance artificial intelligence is the big thing right now so uh since investing is about guesstimating the future I would like to hear some of your thoughts on uh on AI perhaps first uh what is your opinion on AI in general do you think it'll be a net benefit to society or do you think it's over or uh underhyed and we'll discuss the environmental impact of returns later but just in general yeah I'll um I'll say that before we start I would say that's not my my expertise there.
56:00
SPEAKER_02: I certainly have an opinion on it but I'm sure they're way smarter and knowledgeable people to to comment on that specifically personally I I think it's better to go through life as an optimist than a pessimist.
56:11
SPEAKER_02: I think Elon Musk recently said something like it's better to be an optimist and be wrong and go through life like that than vice versa right so I think there's a lot of a lot of truth to that and that's how I see things.
56:23
SPEAKER_02: I see the concern people have and I'm also concerned about the underlying incentives tied back to manga right who's there to stop the biggest companies in the world from engage in this race because as we discussed before they are in a way in a prisoner dilemma themselves and no one can hit hit the brakes because all their competitors likely won't unless um politicians regulate it in in some way right and they're they're certainly fears about AI becoming too smart and taking over the world and I don't know maybe machines eventually go making our species go extinct right I don't know I I I'm a little naive here maybe I just prefer being an optimist and not think about that doomsday scenario all too much.
57:08
SPEAKER_02: I can at the same time think about so many domains where AI will be for the good like just take medicine.
57:14
SPEAKER_02: Imagine how much good AI may be able to do there in terms of speeding up research.
57:19
SPEAKER_02: Like I think that will be absolutely incredible and probably for for the good of humanity in that particular domain at least and I'm sure you're like maybe let me wrap up that first initial comment here by saying I think most people still underestimate the impact it will have.
57:35
SPEAKER_00: I think the exponential growth is is completely difficult to fathom for almost everyone if you just compare where we are today to where we were two years ago take take that will uh will smith spaghetti image for instance which you might have seen right look at at what that looked like two years ago and what it looks like today I don't know the the rate of progress is uh breathtaking I'm too stupid uh to comment on any of this so I'm glad I'm glad you are yeah see I'm putting you uh I'm putting you on the spot now what you what what you maybe can answer is do you think the biggest companies will benefit more from AI or do you think smaller agile companies will sort of wiggle their way into all these existing businesses and and and take over maybe since they're so agile and are based are built from the AI ground up currently it seems like the existing big tech companies are getting stronger and get like a stranglehold on all the others but it could also sort of tear down some of some of their modes of uh of of these larger companies curious to hear your thoughts on it.
58:46
SPEAKER_02: I would say if you're maybe an up and coming AI startup company it's it's as it has ever been your trajectory of outcomes is incredibly wide and and the base rates of you failing are probably incredibly high.
58:58
SPEAKER_02: So the trajectory of outcomes is certainly much narrower for for the big tech companies and I would agree with you that um they are probably getting better because how many how many companies are there that can make as aggressive bets and like in terms of absolute size as the big tech names right now that in in it yeah that in and of itself like that the underlying cash flowing businesses they have to fund these endeavors that's in a way a a competitive edge they have over over competitors right so my only concern would be and I I tweeted about that yesterday that I'm getting a bit tired of everyone talking about the big cap names for the last five to ten years because they have performed so spectacularly well right but at some point my my hunch is they these companies are getting so big and of course they operating globally so the tan is massive and AI may um extend that 10 even further but at some point base rates or how have historically the biggest companies in the world grown from their starting base at some point it needs to catch up and the law of num large numbers to it just gets harder to compound at 20% plus when you're a multi-billion dollar company or multi multi-trillion dollar company sorry but then we have earnings season right now and you see Amazon posting what was it 37% growth in in cloud like numbers that seem an inconceivable at least and Microsoft grew I think close to 30% matter high 20s I don't know so there's a bit of a attention I I I have there but if we maybe leave the evaluation aside here um I think these companies will probably be better and bigger 10 years from now um I'm I'm I'm not disagreeing there.
1:00:52
SPEAKER_00: Yeah I I I I found this stat somewhere that the capital expenditure from Amazon 100 and I don't know 30 billion let's say I think it's close to that.
1:01:03
SPEAKER_02: And I don't even know how how you oversee this like let's say you're Mark Zuckerberg how how do you even oversee a spending a hundred billion on what right yeah you have to have the right structure in place then I I guess um so uh another sort of tension I wanted to bring up here just thinking about it with common sense at some point the returns on that reinvested capital shouldn't be there anymore because in aggregate aren't they spending close to a trillion soon so to get a a 10% return on incremental invested capital the earnings power needs to go up by a hundred billion and a hundred billion is so much maybe they can do that for one year but the year after again the year after again so that's one side of the argument.
1:01:47
SPEAKER_02: On the other hand these businesses are run by idiots right so they they probably have some visibility too on in terms of the the returns they earn on on that capex spend and I think I think um the CEO of Amazon has been quite vocal about that recently I said well we actually have a lot of contracts locked in that we haven't announced yet but we most of the capacity that we are building will be taken on so who am I I'm I'm just judging it from the outside and my common sense point of view would uh raise some skepticism but then the actual numbers we are seeing so far will tell a different story.
1:02:26
SPEAKER_00: Let's invert this Rene what what sort of companies or industries or business models do you think are mostly immune to AI?
1:02:36
SPEAKER_02: Infrastructure for sure um I don't know like I for the guest piece that I think you're going to release today I uh brought up Boston Omaha for instance which I don't know uh disclaimer here um but they have two divisions that are very maybe infrastructure is the wrong term for it but um asset heavy let me put it that way so they have that um physical billboard business for instance which I I don't think is entirely going to go away I think that's not a a growth um technology of course or growth industry per se but that's certainly a nice cash cow that I believe will prove to be quite quite durable and uh I don't know in post is another company that just comes to my mind here I'm not sure if you are familiar with it but basically um an infrastructure company on on the uh postal services uh side of things like having I don't know how many how many of these uh pickup points they have in in all of Europe uh it's been a while since I analyzed it but that is not something AI will be able to to easily replicate that network left boat and and warehouses and everything that goes into that well infrastructure yeah I I think two two two things to be aw uh uh aware of i and I I used to own it I sold it after a couple of months after the acquisition rumors surfaced or it's it wasn't rumors but they were made official um but uh I think they postponed the deadline for when they needed the number of votes required to get to get the deal done and I think the European Commission if I'm not mistaken here recently uh like my friend Niklas shared an article with me uh I think they also are looking at it from a um what's it called English uh like to avoid former monopolies right from from that point of view.
1:04:29
SPEAKER_00: I actually think luxury is something that will probably do pretty well with AI since it's uh it has a unique business model and psychology behind it.
1:04:40
SPEAKER_02: Um I don't think you can really replace hermats um with AI I mean they might even become more profitable due to uh efficiency gains I don't know um I think in indeed like you mentioned like infrastructure perhaps like uh waste management railroads uh stuff like that might be interesting to look at the I I love inverting stuff so everybody's talking about AI and everything is going through the roof so what is not going to be affected by AI is is a good question to ask sometimes I I I believe like aerospace is probably a good one or healthcare but it but even within software I think it the judgment just requires a lot of nuance I don't think AI is going to uh disrupt all software companies but there's like a a very fine line between those that are going to to go away very quickly because AI can just do it better more efficiently more more cheaply and companies that will actually benefit even even in that space that maybe at surface value seems like it's prone to be disrupted.
1:05:49
SPEAKER_00: Yeah it's I think uh software is in trouble but mostly horizontal software I think the more vertical you are the more mission critical you are the the the less risk you uh Probably have.
1:06:02
unknown: Yeah.
1:06:02
SPEAKER_00: Do you think we're in an AI bubble?
1:06:05
SPEAKER_02: Yeah, I don't know.
1:06:06
SPEAKER_02: As I said, my common sense tells me yes, but the data is isn't backing that up so far.
1:06:12
SPEAKER_02: But yeah, I have my doubts how long that race can continue going on.
1:06:17
SPEAKER_00: Maybe back to uh some of your portfolio and investing, and then uh we'll work towards the ending.
1:06:22
SPEAKER_00: If you could maybe like mention three companies you would like to own for the next decade, what sort of interesting companies would you like to own?
1:06:30
SPEAKER_00: No matter let's say all companies are attractively valued.
1:06:33
SPEAKER_00: What sort of companies would would you like to own for the next comp for the next decade?
1:06:37
SPEAKER_02: Yeah, but just glance at my portfolio.
1:06:39
SPEAKER_02: Uh we already mentioned interactive broker, so I don't need to repeat that.
1:06:42
SPEAKER_02: I one is that uh is one that is coming to my mind.
1:06:45
SPEAKER_02: Um look at my portfolio, so all the companies I mention now are owned by me right now, so I'm of course biased in some some way.
1:06:54
SPEAKER_02: Um but wise comes to my mind too.
1:06:56
SPEAKER_02: Company that uh for the most part of my holding period has been like easy sailing, not much to track, like they report their quarterly numbers, we check them, they keep the KPIs are on track and everything is smooth sailing.
1:07:08
SPEAKER_02: Uh more recently it has has more has had more hiccups.
1:07:11
SPEAKER_02: I think you're you follow the company too, right?
1:07:13
SPEAKER_00: Uh it's as well, yeah.
1:07:15
SPEAKER_02: But I'm not sure if you read my my latest update on on the company after the application to the US National Trust Bank um charter uh got denied.
1:07:25
SPEAKER_02: I think the long-term destination is still intact.
1:07:28
SPEAKER_02: So I still believe in their long-term mission.
1:07:30
SPEAKER_02: And I'm a happy shareholder as of now.
1:07:33
SPEAKER_02: I think it's always important to be able to change your mind on that.
1:07:36
SPEAKER_02: But as of today, I still believe 10 years from now they will be a bigger, better company delivering a lot of value to their customers.
1:07:43
SPEAKER_02: And maybe a company that more recently entered my portfolio would be would be Mercado Libre, which we could tie back to that infrastructure point we just discussed.
1:07:51
SPEAKER_02: I think that will prove to be to make the company incredibly durable to during the next 10 years.
1:07:58
SPEAKER_02: So I'm I'm very confident in the trajectory of that business over the next 10 years as well.
1:08:02
SPEAKER_00: Is there a company in your portfolio that you're maybe down on big, but you think the complete the market just completely misunderstands?
1:08:10
SPEAKER_02: Oh, now I have to throw in a tough one here.
1:08:13
SPEAKER_02: Um still one of my bigger positions is Tiger Brokers, which is a single poor-based brokerage business.
1:08:20
SPEAKER_02: And there's so much I would have to bring up here.
1:08:23
SPEAKER_02: Um they recently, like I earlier said, you have to have the right temperament to be uh an individual stock picker and someone who runs a concentrate portfolio.
1:08:33
SPEAKER_02: A couple of weeks ago, news broke that basically Chinese regulators are forcing uh companies like Tiger Brokers, offshore brokers from the mainland China perspective, to entirely shut down uh their business with mainland China customers.
1:08:48
SPEAKER_02: Meaning historically, um Tiger Brokers started with uh Chinese customers who wanted to invest uh abroad and put in a nutshell that business is getting entirely shut down now.
1:09:01
SPEAKER_02: And uh when that news broke, Tiger Brokers was on like 40% free market.
1:09:05
SPEAKER_02: So that that's a hit to the stomach once you see it.
1:09:08
SPEAKER_02: I still own it though, and I think it's way too cheap.
1:09:11
SPEAKER_02: But that's definitely like I want to put a big disclaimer here, uh probably a wide trajectory of outcomes, and there's a lot of things going on that you have to familiarize yourself with.
1:09:21
SPEAKER_02: But these days, the majority of the accounts that have an account with Tiger Brokers are not mainland Chinese investors.
1:09:31
SPEAKER_02: So the majority actually are based in Singapore and Hong Kong, some also in other uh geography cities like Australia and other countries, but the majority nowadays is Singapore and Hong Kong.
1:09:42
SPEAKER_02: But effectively the mainline China part got cut, but those only represent, I think, 10% of all accounts, a bigger portion of revenue, 20 to 25% of revenue, presumably an even bigger portion of earnings, because I think they have been more attractive customers, because in Singapore, for instance, and I think in Hong Kong too, if I'm not mistaken, um, the model Tiger runs is a zero commission model.
1:10:05
SPEAKER_02: So I think that's just less attractive than the legacy customer, so to speak.
1:10:10
SPEAKER_02: I'm still bullish on the company though, because put in a nutshell, my thesis is GDP per capita in Southeast Asia will go up, more people will want to have access to capital markets, um, wealth per capita capita will will go up, and as a result, assets uh under management will go up for these companies.
1:10:32
SPEAKER_02: And that's basically the thesis in a nutshell that I think is not changed.
1:10:37
SPEAKER_02: So yeah, we I I think that's a very dynamic situation.
1:10:40
SPEAKER_02: Maybe if if someone listens to this episode half a year from now, I will sound like a complete idiot because things may have changed.
1:10:48
SPEAKER_02: Um, but but the stock is also very, very cheap, I believe.
1:10:52
SPEAKER_02: So yeah, not much has to go right for the company to do well from here.
1:10:56
SPEAKER_02: I will say, however, if we take on the the necro perspective here, like we are in this massive bull run, right, with a lot of uh euphoria everywhere everywhere we discussed it, and eventually that party will end.
1:11:11
SPEAKER_02: And as a brokerage business, you probably better have a very conservative conservatively managed balance sheet, not too much margin-led uh debt on your books to make sure you survive your other environments too.
1:11:24
SPEAKER_02: So that's something to be aware of too, I think.
1:11:26
SPEAKER_00: Is there a company you deeply admire but you never own because of the valuation?
1:11:34
SPEAKER_02: Oh, I'm sure there are.
1:11:35
SPEAKER_02: Um Microsoft comes to mind.
1:11:40
SPEAKER_02: Never seemed cheap enough to me.
1:11:42
SPEAKER_02: I'm sure there are more.
1:11:42
SPEAKER_00: It's not like like one comes to my mind right away here.
1:11:45
SPEAKER_00: I always I always come back to Hermes.
1:11:47
SPEAKER_00: I would love to own that business.
1:11:48
SPEAKER_00: Although it's I believe it's dropped like yeah, it's getting closer, but it's still, I think it comes down to multiple expression uh um multiple compression.
1:11:57
SPEAKER_00: I think it's still like 37 times earnings, which is crazy after a 40% drop.
1:12:02
SPEAKER_00: But um what a world-class business that is.
1:12:06
SPEAKER_00: It's uh phenomenal.
1:12:07
SPEAKER_00: Yeah, and it's just so fun to follow as well.
1:12:10
SPEAKER_00: I I'm just fascinated by the psychology of the luxury industry, and I I hate luxury items.
1:12:15
SPEAKER_00: I am the cheapest guy you'll ever find.
1:12:18
SPEAKER_00: I I'll drive in the cheapest car, I I want the cheapest petrol, I want the cheapest clothes.
1:12:23
SPEAKER_00: I just want my money to be spent on things I care about, which is travel, um um doing things with my wife, experiences, maybe my own house, stuff like that.
1:12:36
SPEAKER_00: But um I just find it fascinating that people spend so much money on these expensive items that just make no sense to me.
1:12:43
SPEAKER_00: I keep going back to the example of uh the Patek Philippe watch where you have to go, you pay like a million bucks for a watch that you have to recalibrate every three months because it I don't know, it just you can buy a cheap watch at action for like three euros and it will last for you for like 10 years.
1:13:04
SPEAKER_00: I don't know.
1:13:04
SPEAKER_00: It's just funny to me.
1:13:05
SPEAKER_00: We're nearing the end of the episode.
1:13:07
SPEAKER_00: You gotta get a tan soon because uh I'm just kidding.
1:13:12
SPEAKER_00: Uh, but I think it will be fun to to wrap this up and give our listeners maybe some useful lessons.
1:13:18
SPEAKER_00: If you could sit down with the 18-year-old self, your old self, what advice would you give yourself about investing and money in general looking back?
1:13:28
SPEAKER_02: The first thing that comes to my mind would be start as early as possible.
1:13:32
SPEAKER_02: I think that's that's probably the biggest hack you you you can unlock here.
1:13:37
SPEAKER_02: Of course, if you start at age 20 versus age 30 and you plan to invest until you're you're 70, the advantage you have as someone who started a decade earlier, you you can't you you have a you will have a hard time catching up by earning a higher return if you start 10 years later.
1:13:53
SPEAKER_02: So probably that.
1:13:55
SPEAKER_02: I started at like age 28.
1:13:59
SPEAKER_02: Um so I think that's okay.
1:14:01
SPEAKER_02: Could could be worse.
1:14:03
SPEAKER_02: But I I see people on X who start with 19, right?
1:14:06
SPEAKER_02: And I think, oh lucky, lucky you.
1:14:08
SPEAKER_00: Yeah.
1:14:09
SPEAKER_00: Yeah.
1:14:09
SPEAKER_00: I started at like 20, but it still feels like I started too late.
1:14:16
SPEAKER_00: Yeah, I've been investing for like eight years now, but it still feels like I should have started at like what when I was 18.
1:14:23
SPEAKER_02: Yeah, but you have no control of it, right?
1:14:25
SPEAKER_02: So my my parents didn't give me exposure to it and wasn't taught in school.
1:14:29
SPEAKER_02: So it it depends on some external um circumstances, I guess, when you when you get that exposure, and you and some might never get it.
1:14:36
SPEAKER_02: Yeah.
1:14:36
SPEAKER_00: And I probably didn't have the capital to really invest in anyway, and I spent a lot of my money on uh fun times with uh with my friend.
1:14:45
SPEAKER_00: So uh no regrets.
1:14:47
SPEAKER_00: Which was worth it.
1:14:48
SPEAKER_00: Yeah, definitely.
1:14:48
SPEAKER_00: Yeah.
1:14:49
SPEAKER_00: What what would you like to achieve with your uh Substack publication?
1:14:53
SPEAKER_00: Your you have a YouTube channel, you're you're active on X, you you you like to invest.
1:15:00
SPEAKER_00: There's a lot going on.
1:15:01
SPEAKER_00: What's the goal and what what keeps you going besides just being interested?
1:15:06
SPEAKER_02: I don't know, man.
1:15:07
SPEAKER_02: Uh I would say that's maybe another I think I gave sort of a a life hack early on in the episode where it talked about well, you have to just find something you're passionate about.
1:15:16
SPEAKER_02: Maybe another one would be to to do productive things.
1:15:19
SPEAKER_02: Um just being productive and and creating stuff makes me happy.
1:15:23
SPEAKER_02: I think it's it's a better way to to live life than just passively consuming content.
1:15:28
SPEAKER_02: Um and doesn't mean you have to create content for social media or for blog or whatever.
1:15:33
SPEAKER_02: Could be you drawing pictures uh in your garden, I don't know, or being very active in in in in a certain sports domain or anything like that.
1:15:43
SPEAKER_02: But I think just being productive is is like a uh a key to to lead a happy life.
1:15:49
SPEAKER_02: So it's not like every like a specific goal, it just makes me happy to create stuff, to reach people, to create see I I wouldn't be able to connect with you today if if I not at one point made the step to decide that I want to share stuff online too.
1:16:03
SPEAKER_02: Um yeah, not sure if that's a good answer, but that's what comes to my mind here.
1:16:08
SPEAKER_00: It's an it's an honest answer.
1:16:09
SPEAKER_00: Whether people agree with it or not, doesn't matter.
1:16:11
SPEAKER_00: It's uh it's your uh your feeling and belief.
1:16:14
SPEAKER_00: Uh let's wrap it up.
1:16:15
SPEAKER_00: We always end the episode with uh a life lesson, something you've learned along the way.
1:16:20
SPEAKER_00: And maybe I already know what you're going to say, but we'll we'll see.
1:16:23
SPEAKER_00: Maybe a mistake you made, things you learned, a belief you have from everything you've learned from your what you say, 38 years of living, everything you've done so far.
1:16:35
SPEAKER_00: What's something you believe everybody should know or uh walk away with from uh from this episode, maybe?
1:16:42
SPEAKER_02: I don't know.
1:16:43
SPEAKER_02: I feel like you're catching me off guard here.
1:16:46
SPEAKER_02: Like I gave some life advice already.
1:16:48
SPEAKER_02: I mean, ultimately, and uh based on all what you shared on this episode so far, I feel like you probably underwrite this as well.
1:16:56
SPEAKER_02: This whole investing thing, sort of a a side gig, a side challenge you want to accomplish in life, but you don't take any money with you when you die, right?
1:17:06
SPEAKER_02: So ultimately just connect with people you you like and and enjoy spending time with, have a great time with them, take some time off sometimes.
1:17:14
SPEAKER_02: Maybe that's the the wrong place to to state it, being on a podcast recording while on holiday.
1:17:20
SPEAKER_02: But you it's always about it's always about finding the right balance, right?
1:17:23
SPEAKER_02: I would say just surround yourself with with great people.
1:17:26
SPEAKER_02: That's that's ultimately what makes you happy.
1:17:29
SPEAKER_00: Yeah.
1:17:30
SPEAKER_00: And uh on that note, I think it's time for Renee to go outside, enjoy the sun and his holiday.
1:17:37
SPEAKER_00: But um awesome, Renee.
1:17:38
SPEAKER_00: Thank you.
1:17:39
SPEAKER_00: Uh it's been fun.
1:17:40
SPEAKER_00: It's uh it's so nice to meet you, and thank you for taking the time to do this.
1:17:43
SPEAKER_00: Um, I really appreciate it, and uh I found it super uh fun and insightful to talk to you.
1:17:49
SPEAKER_00: You can find all of Rene's socials in the show notes.
1:17:52
SPEAKER_00: Definitely check him out, give him a subscribe, whether it's on YouTube or on Substack where he's most active.
1:17:58
SPEAKER_00: And if you enjoyed our conversation together, don't forget to leave us a five-star review on your favorite podcast player.
1:18:05
SPEAKER_00: That definitely helps us out.
1:18:06
SPEAKER_00: And it's totally free.
1:18:08
SPEAKER_00: Thank you so much for listening, everybody, and uh I hope we'll see you in the next one.
1:18:13
SPEAKER_00: And uh thanks again, okay.