Two weeks ago I gave a presentation on Trupanion at the Value Investing Seminar in Italy. The presentation is brief for two reasons:
- I only had 20-minutes to present.
- I don’t like reading slides when presenting (kind of defeats the point of presenting), so most slides contain high-level thoughts that were explained more in-depth by me.
I wish I would have had 30-40 minutes to present. That way I could have done a deeper dive into the business. Nonetheless, I think some readers will get value out of it. Click below to view the presentation.
TRUP Presentation – VIS 2018 – Travis Wiedower
My 2018 interim letter is linked below. Topics include:
- My evolution to focusing exclusively on compounders
- JD.com investment thesis
- Four significant changes to Wiedower Capital to help align my investment strategy with my partners and my own pay structure
Wiedower Capital 2018 Interim Shareholder Letter
Most companies I’ve invested in have been ones that I wasn’t previously familiar with. I only became familiar with the product and industry after many hours of research. This isn’t on purpose—just a result of me not being a user of most public company’s products. The advantage of this is that I approach learning about these new products from a clean slate with few biases. The drawback is that I will probably never understand the product as well as I would if I was a regular user.
The opposite of this is Peter Lynch’s investing style: “Invest in what you know.” Lynch advised people to invest in companies they know and love. Logically, this makes a lot of sense, but I’m not convinced this method is any better (or worse). The advantage of Lynch’s approach is that a user might have a unique insight into the value of a company that other investors may not have or appreciate. The drawback is the user will almost certainly overemphasize their own experience with the company and may discount what the greater population thinks (i.e. the base rate).
Continue reading “Invest in what you know or what you don’t know?”
I generate new investing ideas mostly through reading investment write-ups online, talking to other investors, occasionally going through screens of companies that meet some high-level criteria I look for, and general learning (like reading books and news) that sometimes leads to an idea. I like getting ideas from others (via investing websites, blogs, and friends of mine) because it’s a quick way to get an overview of the business and industry. Thus, my research doesn’t have to start from scratch. Between investing websites and blogs that I follow, I look at several hundred investment write-ups per year.
Depending on how well I know the industry, my research for a new company generally takes anywhere from a few weeks to several months. Thus, in an entire year I only have time to get to know a handful of companies really well. This forces me to be very picky on what companies I spend time researching. I want to know a small number of high-quality companies very well, as opposed to knowing less about hundreds or thousands of companies.
Continue reading “My investment process”
In the 1950s, the average holding period for stocks was over seven years. Not surprisingly, that number has been falling ever since—current estimates put the holding period at around 4-8 months.
The vast majority of investors are focused on the next quarter or the next year, which is mostly just noise in terms of what really matters to a company’s value. It’s not uncommon that a company’s terminal value is 70-80% of what it’s worth today. If how a company will perform 10-20+ years from now makes up most of its value, then the most important factor when choosing companies to invest in is how durable their competitive position is over the long-term, which often has very little to do with near-term results. Even so, it’s not a surprise that so much of Wall Street focuses on the short-term.
Continue reading “Time Arbitrage as a Competitive Advantage”
“If I had to sum up history in one sentence it would be: Life gets better—not for everyone all the time, but for most people most of the time.” – Bill Gates
It’s easy to look at the news on a daily basis and think the world is getting worse, but that couldn’t be further from the truth. Unfortunately, the news only reports on what gets the most viewership, and reporting “US murder rates down 1.6% this year” or “worldwide childhood mortality fell this year like it always does” aren’t nearly as visceral and impactful as the KKK, drug overdoses, Middle Eastern wars, or even our president’s tweets.
Not that the world is perfect—far from it—but I think it’s important to be reminded once in a while how good we have it compared to everyone else in human history. Similar to my blog post, Is the world getting better or worse?, reading through the annual letters of the Bill and Melinda Gates Foundation was a healthy reminder of the amazing progress this world continues to make, despite the non-stop negative headlines.
Continue reading “Lessons from Bill and Melinda Gates”
I went back on The Intelligent Investing Podcast this week to discuss a few companies Wiedower Capital owns, mainly Calloway’s Nursery, Franklin Covey, and Issuer Direct. Click below to listen.
The Intelligent Investing Podcast