A Podcast for Investors from Richard Sosa. This show covers investment opportunities in markets that are relatively unknown to the average investor. Through in-depth conversations, we learn how money managers, company executives and other leaders build an edge one niche at a time.
The Power of Anchoring with Jeff Gramm
Jeff Gramm is the Founder and Portfolio Manager at Bandera Partners, an investment firm focused on special situation and activist investing. Jeff is also the author of Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism. This episode includes a deep dive into capital allocation, shareholder governance and activist investing. It also recounts great stories from Popeyes, Joint Corp (JYNT), PAR Technology (PAR), Donnelley Financial (DFIN) and Denny’s (DENN).
To learn more about Jeff please follow him @jeff_gramm on Twitter. To learn more about Richard or to request a transcript of the podcast please visit www.thinkaen.com.
To order a copy of Jeff’s book please use this link here.
(1:08) Background and introduction from Jeff. He talks about Columbia Business School and taking Joel Greenblatt’s class.
(03:06) Getting an MBA at Columbia and the value investing program. Figuring things out. Mario Gabelli and Seth Klarman.
(05:45) Jeff’s most difficult classes at Columbia.
(06:30) Working at HBV Capital post MBA. Looking at bankruptcies. Denny’s investment and filing 13Ds.
(10:13) The ‘ins and outs’ of filing a 13D.
(16:43) Position tracking and Popeyes Investment. How to trim a portfolio holding. Cheryl Bachelder.
(19:36) The Power of Anchoring stock investments. Management’s ability to create long-term value. Overcoming mental exercise of looking at portfolio every day.
(21:37) JYNT Twitter Spaces with Edwin Dorsey @stockjabber
(23:27) DFIN, DENN, JYNT and Popeyes going over the similarities and differences.
(25:39) Speaking to other investors about portfolio holdings. Hearing the Bear Cases.
(26:47) Investor fatigue on special situations and how it can sometimes create massive opportunities. Discussing 5+ year incremental returns chart posted by Dennis Hong.
(30:37) Idea Generation Process and Wishful Thinking versus Fundamental Reality.
(33:13) The Benefits and Dangers of speaking to company management.
(34:14) Jeff has been on six company board of directors and he gives a brief overview of what it entails.
(38:08) Talking about the role of a board of directors. Star Group Investment (SGU)
(39:11) Public Company Annual Meetings. What you can learn and how it benefits investors.
(41:22) Other Activist Investors.
(42:38) Executive Compensation. Jeff delves into his contrarian thoughts. Performance over optics.
Secular Cyclicals Investing with Yaron Naymark
Yaron Naymark is the Founder and Portfolio Manager at 1 Main Capital, a boutique investment firm that makes concentrated investments in high-quality, reasonably-valued businesses with long reinvestment runways. The firm also invests in special situations with asymmetric risk return profiles. Richard talks to Yaron about how he entered the investment world, what led him to start a fund and how he sees great opportunities in Secular Cyclicals.
To learn more about Yaron please visit www.1maincapital.com or follow him @1MainCapital on Twitter. To learn more about Richard or to request a transcript of the podcast please visit www.thinkaen.com.
(1:10) Launching 1 Main Capital. Growing up in Florida with Entrepreneur parents and being a First Generation American.
(04:57) Passion for investing at young age. Getting into investing banking from Florida and how Yaron networked into a job.
(08:11) Luck versus skill as well as the interview process at investment banks and private equity. Being prepared for interviews, knowing what to say and what not to say.
(11:50) Detailed explanation between the differences in investment banking and private equity.
(15:08) Starting his own investment partnership. Personal capital and network of close contacts and former colleagues.
(18:01) 1 Main Capital’s Strategy of compounding capital and avoiding permanent impairment risk. Core Investments, oligopolies, etc. Yaron also talks about his opportunistic bucket.
(25:35) Time it takes to research a stock and then make it a real position, which varies depending on whether it’s a core or opportunistic position.
(27:07) How to think about leverage in the fund.
(29:27) Favorite themes, introducing secular cyclicals – how opportunities can be found in cyclical industries with massive secular tailwinds.
(31:04) Introduction to Malibu Boats, large secular cyclical in the portfolio. Other top ideas to include Ricks and KKR.
(39:09) Investing in companies that make a lot of acquisitions, what makes a good deal versus a bad one. How Yaron’s background in private equity and investment banking help him evaluate transactions.
(45:52) Speaking with management teams. Small cap companies versus the larger Googles of the world.
(48:19) Valuable tips for aspiring investment managers.
(50:36) Wrap up and contact information.
POD RECAP - Popeyes Stock: The $11 to $79 Story
Bonus Podcast Recap for Episode 28: Principles of Restaurant Franchising with Cheryl Bachelder.
Cheryl's Book - Check it Out https://amzn.to/3zQgUpR
Click Here for YouTube Video Link.
Cheryl Bachelder is a legend in the Restaurant Franchising Space. She is currently on the Board of Chick-fil-a and US Foods. She has held senior positions at Domino’s Pizza and KFC. Most notably, Cheryl was the CEO of Popeyes Louisiana Kitchen where she launched a franchise driven turnaround that drove the stock from $11 to its ultimate sale of $79 in 2017. Enjoy the 4 minute video. Please don't forget to Like, Comment, Subscribe and Share.
Full Episode with Show Notes Here.
Full Podcast Transcript Here.
Anglo Dutch Value Investing with Keith Smith
Keith Smith is the Founder and Portfolio Manager at Bonhoeffer Capital Management. Bonhoeffer is a value-oriented investment partnership that seeks to grow capital at a faster rate than market indices over full market cycles and provide minimal exposure to permanent loss. Richard talks to Keith about his electrical engineering background and his transition from a Business Valuation Expert to an Investment Fund Manager. *Value versus Growth Business Valuation. Identifying great investment opportunities. Anglo Dutch Public Companies and so much more.
To learn more about Keith please visit www.bonhoeffercapital.com. To learn more about Richard or to request a transcript of the podcast please visit www.thinkaen.com.
(1:08) Keith’s Background
(02:35) From Electrical Engineering to Business Valuation
(04:47) Value versus Growth Investing; Operational Leverage
(08:47) Current Stock Market Valuations; Ben Graham, China and QE
(14:40) Starting an Investment Partnership; Investment Mistakes
(19:11) Keith’s circle of competence and investing in companies with high Free Cash Flow; Telecom and Media
(24:03) Shareholder governance and how large institutions can do better
(27:54) Management alignment of interest and the Dutch East India Company
(29:18) Anglo Dutch Roots and Keith’s explanation of why some countries deserve higher multiples; Netherlands Cost of Capital Advantage; Emerging Markets
(34:43) Investing in Europe, Taxes, China, Disruption, UK
(39:09) Some investment ideas and themes including Asbury Automotive (AGB), Consolidated Communications (CNSL), Builders FirstSource (BLDR)
(48:12) When Keith exits an investment / sell criteria
(55:28) Keith’s thought on inflation
Principles of Restaurant Franchising with Cheryl Bachelder
Cheryl Bachelder is a legend in the Restaurant Franchising Space. She is currently on the Board of Chick-fil-a and US Foods. She has held senior positions at Domino’s Pizza and KFC. Most notably, Cheryl was the CEO of Popeyes Louisiana Kitchen where she launched a franchise driven turnaround that drove the stock from $11 to its ultimate sale of $79 in 2017. Learn Cheryl’s background, how she fixed franchisee relations and so much more.
To learn more about Cheryl please visit www.cherylbachelder.com. To learn more about Richard or to request a transcript of the podcast please visit www.thinkaen.com.
Amazon Book Link: Dare to Serve
(01:50) Cheryl’s Background
(02:51) First Job at Procter and Gamble
(03:31) How Cheryl got her start in the Restaurant Industry
(04:45) Domino’s Pizza and Tom Monaghan
(06:55) Investor Franchisee Due Diligence; Channel Checks
(09:07) Yum Brands and Kentucky Fried Chicken, KFC and David Novak
(11:21) Joining Popeyes Louisiana Kitchen; Frank Belatti, John Cranor and John Hoffner
(15:13) First steps as Popeyes CEO - Building Alignment and Trust + P&L’s
(17:15) Franchisee Mistakes and taking operating profits from 17% to 24%
(22:21) Comparing Dominos, KFC and Popeyes
(24:19) Class Action Lawsuits from Franchisees
(29:01) Drilling down on Popeyes Franchisees / Taking Franchisee Notes
(33:28) Biggest Franchisee Relationship Challenges
(35:41) Being a Public Company CEO and Huge Stock Market Win; Near 10 bagger
(38:55) Stock Investor Annual Meetings and Quarterly Conference Calls
(40:43) Favorite Foods and Answering the Toughest Question
(43:12) Cheryl’s Book: "Dare to Serve: How to Drive Superior Results by Helping Others" + Turnaround at Popeyes; Link to Book can be found here.
Switzerland Investment Diversification with Jamie Vrijhof-Droese
Jamie Vrijhof-Droese is a Managing Partner at WHVP LTd. Based in Zurich, Switzerland, WHVP is a full-service Financial Advisor that specializes in helping US clients internationally diversify their money and add a layer of asset protection to their wealth. Jamie and Richard talk about Currency Alternatives to the US dollar, busting myths around Offshore Investing, and Switzerland as an Offshore Financial Jurisdiction. They also talk about the Next Generation of Wealth and discuss some differences in how Men and Women value Financial Advisors.
To learn more about WHVP check out whvp.ch/. You can reach Jamie at JV@whvp.ch. To learn more about Richard please visit www.thinkaen.com.
(01:11) - Jamie Intro
(03:38) - Busting Offshore Investing Myths
(07:46) - How WHVP attracts clients
(09:49) - Millennials and other Generations
(11:05) - How women view Financial Advisors versus Men; Male and Female Investing Patterns
(15:59) - WHVP Investing Philosophy
(18:30) - Crypto Currency and Crypto-Valley
(24:30) - Taking over the Family Business
(30:12) - Jamie's first investment