TFTLR: 1) Frameworks, 2) Stock Source and Pitch, 3) M&A as a Function, and PD) Focus and Life's Questions
Thoughts for the Long Run, 9/16/22
Welcome back to TFTLR! My sincerest apologies for the unplanned hiatus, but it is a pleasure to be back.
Mental Model 1 - Frameworks (Chris Paik): A series of fascinating investment / operating frameworks. A few of my favorites are 1) The seven deadly sins are seven core motivators, 2) Build a platform for others to build their businesses on top of, 3) Content networks enfranchise previously disenfranchised creators, 4) Specialized tools beat generalized tools, 5) 10X better derives from a combination of vectors (e.g., price and quality), and 6) User trust = consistently meeting expectations
Mental Model 2 - EPAM Systems Stock Pitch (Value Punks): I'm actually less interested in the stock pitch itself that the structure of the pitch and what it means for finding and evaluating businesses broadly. Identifying a company that has compounded cash flow growth at 30%+ each year that traded off 75% is likely to have some fairly compelling investments, and identifying the issue causing the sell-off and double-clicking into the market overreaction based on fundamentals is very well done.
Mental Model 3 - Sidecar Investing (Scuttlebutt): Compelling breakdown of the value of high-performing conglomerates that run decentralized operations in fragmented end markets, particularly looking at their repeatable acquisition engine. Building a dedicated M&A function focused on smaller companies in specific niches is a highly profitable strategy when executed correctly, and backing management teams who can do this provides tremendous leverage.
Personal Development - Focus and Finding Your Favorite Problems (Neckar): Focus is a tremendous driver of long-term success, and one can identify this focus through keeping a catalog of the "questions that keep you curious and engaged for a long time." A few on my mind: 1) How do we build a better healthcare system? 2) How do we solve the housing crisis? 3) How do I keep in touch and deepen my relationships?
Have a great weekend,
Aimun