Below is our “Top Podcast” episode with our new curator, Colby Donovan! Holler with any feedback!
Today we have a great episode on value investing, Rob Arnott providing thoughts on the current state with the market, a talk with the CEO of AWS, and how gyms across the US applied behavioral economic principles to enhance their profitability.
- Invest Like The Best: Chuck Akre — The Three-Legged Stool. Akre is a fundamental investor and founder of Akre Capital Management, which manages roughly $10 billion. He explains what he calls the three-legged stool, which he uses to analyze businesses. It consists of: 1) the quality of the business enterprise; 2) the quality and integrity of the people who run the business; and 3) the managements’ record of reinvestment and their opportunity for reinvestment going forward. He then walks through the thought process behind a few of his investments, including Mastercard in 2010, Dollar Tree, and O’Reilly Automotive. He also touches on the importance of keeping the investment process simple, avoiding noise, focusing on the long-term, and identifying CEO’s who focus on compounding the economic value per share instead of the stock price. He finishes with recommending the book 100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities, which emphasizes the idea of compounding. [June 18, 2019–47 minutes] iTunes Podcast | Spotify | Overcast | Breaker| Website Link
- Grant’s Current Yield Podcast: Research Triangle. Grant is joined by Rob Arnott, founder and chairman of Research Affiliates, LLC, to discuss the current state of the market. He starts by explaining why he went overweight (with half of his net worth) emerging market value stocks a couple years ago and states “there’s no such thing as a bargain in the absence of fear.” He thinks there’s currently a bubble in the bond market because you need implausible assumptions to justify current valuations and the average marginal buyer is paying no attention to valuation models. He also discusses the relationship between the yield curve inversion and an impending recession, why he thinks the Fed will cut rates 50–75bps this summer, and why he thinks treasuries are a safe haven (for now) if the deficit doesn’t get out of control. [June 21, 2019–29 minutes] iTunes Podcast | Spotify | Overcast | Breaker | Website Link
- Animal Spirits: Talk Your Book: Trading with MarketSmith. The Animal Spirits team is joined by William O’Neill from MarketSmith to talk about the art of trading. They discuss the idea of cutting your losses short and letting your winners run and explain the psychology behind why letting your winners run is successful. They also explain why the cup and handle formation is an important pattern to follow, why a stock breaking the 50-day moving average with heavy volume is very bearish, and why taxes should not be the deciding decision when trading. [June 17, 2019–41 minutes] iTunes Podcast | Spotify | Overcast | Breaker | Website Link
- Alpha Exchange: Harley Bassman, The Convexity Maven. Harley is a VP and PM at PIMCO and known as The Convexity Maven. The episode is focused on options, volatility, interest rates and the impact of future demographic shifts. He begins by touching on a few of his beliefs: most of the big market shaking events occur when people have positioned themselves short convexity; we currently have lower volatility right now because of the Fed; and a country like Germany having negative long term rates is preposterous. He believes this is a result of demographic changes and is something Central Banks will need to be aware of going forward. He also discusses the MOVE index, metric for bond option volatility that Harley designed and explains how it is tied to the shape of the yield curve. [June 13, 2019–41 minutes] iTunes Podcast | Spotify | Overcast | Breaker| Website Link
- The TED Interview: Andrew McAfee on the future of our economy. McAfee is a MIT professor and author of Machine, Platform, Crowd. He talks about a lot of issues in calculating GDP, inflation and economic growth due to deflationary things like iPhones and other technological advances which are hard to capture in the data. He mentions there is an increasing concentration across a number of things, including wealth, industrial and geographies. He gives thoughts on why we need to embrace automation, and that he dislikes Universal Basic Income because he thinks the true problem is that people feel alienated and that they aren’t part of something bigger than themselves, and UBI does not fix that problem. He finishes by explaining he thinks the three key drivers for the US going forward are figuring out the right healthcare system, fixing our infrastructure, and doubling down on AI. [June 19, 2019–1 hour, 23 minutes] iTunes Podcast | Spotify | Overcast | Breaker| Website Link
- Recode Decode: Amazon Web services CEO Andy Jassy (Live at Code 2019). This is a timely episode with the recent discussions of antitrust related to big tech. Amazon Web Services (AWS) is a huge part of Amazon and the CEO explains the idea for AWS originated when he served as the chief of staff for Jeff Bezos. He realized there was a need after seeing smaller business struggle to build the storage and data infrastructure for their businesses. It’s now experiencing annual revenues of $31 billion and growing 41% YoY. He finishes the episode explaining why he doesn’t think AWS needs to be spun off and why he was disappointed in NYC pushing back on having Amazon have one of their HQ’s there. [June 17, 2019–54 minutes] iTunes Podcast | Spotify | Overcast | Breaker | Website Link
- Standard Deviations: Andrea Schaffer — Opportunity Zone Investing. Start the episode at the 4:20 mark. Schaffer explains opportunity zones were part of the Tax Cuts and Jobs Act of 2017 to encourage private, long- term investment in low income communities. It gives the opportunity to both institutional investors and individual entrepreneurs, specifically anyone who’s going to face capital gains taxes and has a long-term investment horizon. She also explains what types of investments don’t qualify: golf courses, country clubs, race tracks, and anything related to gambling. She emphasizes the business investment must be both well vetted and projected to be held for 10 years. She provides this website for the economic innovation group if you want to learn more. [June 20, 2019–35 minutes] iTunes Podcast | Spotify | Overcast | Breaker | Website Link
- Planet Money: #590: The Planet Money Workout. This was a fun episode about how gyms across the US have embraced concepts from behavioral economics in order to increase memberships. Gyms used to try to recruit body builders and have them workout close to the entrance to their facility, but have since changed by putting less intimidating machines at the front so people aren’t intimidated the first time they visit the gym. As a result, they are more likely to commit to an annualcontract (gaining precommitment). Gyms have additionally started pizza nights and other “fun” things to increase the likelihood and someone who’s on the fence will sign up. While this has helped gyms become more profitable, they still lose about half their customers every year, so they have to continually recruit new members annually. [June 12, 2019–17 minutes] iTunes Podcast | Spotify | Overcast | Breaker | Website Link
In the last year there have been a couple great episodes on investing in farmland. Both episodes discuss farmland as an asset class and the pros and cons of the space.
- Meb Faber Show: #114 — David Gladstone — “Farmland Is One of The Most Stable Assets One Can Own.” If you’re an allocator or someone who is interested in the topic, this is perfect for you. We’ve heard Meb talk about owning farmland himself before briefly, but this episode is all about it. David talks about how he got interested in farmland and started a REIT ($LAND), why he thinks it’s a great investment/hedge against inflation, and current trends and risks in the space.[July 25, 2018–1 hour, 2 minutes] iTunes Podcast | Overcast | Stitcher | Website Link
- Behind the Markets Podcast: Brandon Zick. Great episode for anyone interested in the farming sector as an investment. Zick is Director of Acquisitions & Portfolio Management at Ceres Partners. They specifically discuss the history of farmland as an asset, why Zick believes the asset looks attractive now, & the impact of tariffs on the space. [September 23, 2018–54 minutes] iTunes Podcast| Spotify | Overcast | Stitcher | Website Link
Episode #161: Brandon Zick, “In Row Crops You’re Generating A Lot Of Current Income”