This summary of the video was created by an AI. It might contain some inaccuracies.
00:00:00 – 00:56:20
The video covers various topics related to investing, focusing on stock selection strategies, company analysis, and market trends. Key points include the discussion of "The Forgotten 40" publication, the importance of diversification, identifying catalysts for stock price growth, and potential investment opportunities such as Interactive Brokers and Howard Hughes company. The importance of underwriting, investing in strong businesses, and the potential for shareholder value increase in sports teams like the Rangers are also highlighted. Overall, the speakers emphasize the need for individual company analysis, strategic investing decisions, and breaking away from consensus for better performance in the market.
00:00:00
In this segment of the video, the speaker discusses “The Forgotten 40,” a publication highlighting 40 best stock ideas for the upcoming year. To be featured in this publication, stocks need to have a catalyst for meaningful capital appreciation and must have been previously profiled in full-length reports. The Forgotten 40 is a popular product from the speaker’s firm, offering one-page snapshots of each company included. The speaker emphasizes the importance of having a diverse list of stocks for portfolio construction, with last year’s issue reportedly performing well for value managers compared to benchmarks.
00:05:00
In this segment of the video, the speaker discusses their equal weighted 40 stock portfolio, the concept of The Forgotten 40, and the importance of diversification in investing. They highlight the turnover rate in their portfolio, aiming to pick their 40 best stocks across different industries and market caps. The speaker mentions a potential small-cap Renaissance in 2024, emphasizing the importance of identifying catalysts to unlock value in investments.
00:10:00
In this segment of the video, the speaker discusses how they view companies as potential acquisition targets and mentions two companies, Univar and Hostess Brands, that were acquired from a previous list. They emphasize the importance of having a reason for owning a business and seeing potential for value growth. The speaker also considers various catalysts for a stock price increase, such as private equity takeovers, share buybacks, asset sales, and index inclusion. The discussion touches on the factors that could lead to a company’s stock price rising and highlights the need to identify these catalysts over a reasonable period of two to three years.
00:15:00
In this segment of the video, the speaker discusses Uber as the biggest winner of the previous year, with its stock rising over 130%. They emphasize Uber’s fast growth in an industry often seen as winner-takes-all. The speaker mentions Uber’s market cap and share price, expressing continued confidence in the company despite its stock value increase. They highlight Uber’s profitability, strong leadership, competitive advantage over Lyft, and long-term growth potential. The speaker also touches on broader economic themes and the importance of not getting swayed by macro factors when investing. The discussion shifts towards small-cap stocks underperforming the S&P 500 since 2015, with potential reasons cited such as tech sector dominance and historical market trends.
00:20:00
In this segment of the video, the speaker discusses the performance of the stock market after the dot-com bust, emphasizing the potential for stock pickers focused on smaller-cap names to excel. The conversation shifts to the impact of presidential election years on investing strategies, highlighting historical patterns and the tendency for markets to be more accommodating during those times. The speaker also touches on the importance of individual company analysis over macroeconomic considerations, cautioning against relying too heavily on strategic calls. The discussion concludes with a reflection on past predictions and the unpredictability of future market trends.
00:25:00
In this segment of the video, the speaker discusses their avoidance of energy sector investments due to historical performance and tax inefficiency. They then transition to talking about Interactive Brokers, a part of the “Forgotten 40” list, noting its impressive growth in account numbers and platform attributes. The speaker praises Interactive Brokers’ business model, differentiation, and growth potential, particularly outside the US market. Interactive Brokers is commended for features like low-cost margin lending and technology automation. The speaker highlights the firm’s appeal for investors seeking long-term growth opportunities and favorable valuation multiples. Interactive Brokers’ PE ratio is mentioned as just under 15 with strong revenue growth figures released in December 2023.
00:30:00
In this segment of the video, the focus is on Interactive Brokers, highlighting their profitability, history, and market growth. The company has shown consistent profitability, with the founder owning a significant portion of shares. Interactive Brokers transitioned successfully to online trading, leading to growth primarily outside the US, notably in Australia, Europe, and Asia. The company benefits from high switching costs, offering low fees and a comprehensive platform that keeps customers satisfied. The competitive advantage lies in being a low-cost provider with excellent technology. In comparison to other US firms like Fidelity and Charles Schwab, Interactive Brokers has substantial room for growth, especially internationally where zero commission trading is not as common.
00:35:00
In this segment of the video, it is discussed how Pershing Square has accumulated a $1.2 billion stake in the Howard Hughes company, with over half of the shares purchased during the drop in March 2020. The chairman, Ackman, bought shares during COVID to ensure the company’s liquidity. The company owns 36,000 acres of raw land for development, with plans to spin out some assets into a separately publicly traded company in 2024. The company may also consider taking the business private or merging it with their fund. Overall, Howard Hughes has a long runway for growth, and there is potential for increased valuation in the future.
00:40:00
In this part of the video, the speaker discusses the importance of accurately valuing a company and not oversimplifying by just looking at land values. The company being discussed reinvests profits back into the business, which is a competitive advantage. They control the supply of land within their communities, making it more valuable over time. The company is not a REIT and can invest for the long term. Near-term catalysts include spinning off assets and owning part of a minor league baseball team. Another company, Marel, is highlighted as undervalued, with a potential upside. The speaker emphasizes the importance of investing in great companies led by good stewards of capital. Markel Ventures, a part of the company, is mentioned for its growth potential.
00:45:00
In this segment of the video, the discussion focuses on the importance of underwriting in investing, referencing investor Chris Mayer’s strategy of focusing on Compounders. The conversation highlights the significance of investing in strong businesses with growth prospects rather than mediocre ones. The speakers emphasize the need for a rationale beyond merely looking at historical stock performance when making investment decisions. Specific companies, like Interactive Brokers and Marel, are mentioned for their diversified revenue streams and potential growth opportunities. The potential upside in investing in Madison Square Garden Sports Corporation is also mentioned, noting the Dolan family’s control and the valuable assets the company owns, such as the Knicks and the Rangers. The discussion touches on the dynamics of publicly traded sports teams and private equity involvement in the sector.
00:50:00
In this segment of the video, the speaker discusses the potential for the Rangers to increase shareholder value through various actions like selling a team or stake, buying back shares, or paying special dividends. They highlight the scarcity and increasing value of sports teams, mentioning the potential NBA expansion and forthcoming media rights negotiation. The speaker addresses the “Dolan discount” due to James Dolan’s reputation, but sees potential opportunities based on past experiences with Cablevision. Lastly, they direct viewers to learn more about the Forgotten 40 and their firm through Boyer Research and their substack.
00:55:00
In this part of the video, the speaker expresses gratitude to the guest, Jonathan, for sharing research and insights on stock picking. The guest emphasizes the importance of breaking away from the crowd and investing in discounted, neglected assets for better performance. They discuss the challenge of going against consensus to find opportunities that others overlook. This strategy requires self-control and discipline in investing.