Value is Dead, Long Live Value, with Modest Proposal – [Invest Like the Best, EP.95]

A very short introduction today because my guest is anonymous. Suffice it to say he manages a large pool of private capital.

He goes by the pseudonym “modest proposal” and his Twitter presence is one of the reasons I first got on and now stay on the platform.

He is level-headed, smart, and skeptical by nature, all of which made for a great conversation. We discuss how difficult the market has become for active investors, thematic investment opportunities, and the potential sources of market mispricings.

Please enjoy our conversation, and let me know which other anonymous accounts you’d like to hear from.

 

Links Referenced

Factors from Scratch: A look back, and forward, at how, when, and why factors work

Josh Wolf Podcast Episode

Mike Zapata Podcast Episode

Michael Mauboussin Podcast Episode

Show Notes

1:55 – (First Question) – How value investing has changed

5:45 – How does he apply the lens of market over-reaction to the current market today

5:47 – Factors from Scratch: A look back, and forward, at how, when, and why factors work

7:06 – Josh Wolf Podcast Episode

8:35 – Areas where he prepares most

8:36 – Mike Zapata Podcast Episode

12:18 – Where markets may be over reacting in media

20:10 – How does he invest on this thinking

20:44 – Michael Mauboussin Podcast Episode

22:35 – Other parts of media that he finds interesting

27:35 – Aggregation theory and how it plays into his investment philosophy

31:06 – Structuring a long-short portfolio in today’s media market

35:59 – Customer acquisition costs and how it’s impacting retailers

40:51 – The role of physical locations in a world that was upended by virtual retailers

49:41 – Consumer Internet Story thesis and what he’s seen during his career

58:11 – Why the FANG stocks can’t win in the niches

1:02:25 – The distrusted 50

1:05:00 – How he thinks about Capital Allocation and buybacks

1:11:08 – His view on international equity markets

1:13:58 – His take on the asset management business

1:19:38 – Allocation of a portfolio in between periods of conviction

1:21:08 – People that he has learned the most from

1:23:54 – How do you identify people who are capable of evolving after a rough spot

1:26:53 – How does he force himself to adapt to new conditions and evolve

1:30:31 – Thoughts in investing in cannabis industry

1:32:31 – Conditions where he would get interested in crypto currency

1:36:20 – Kindest thing anyone has done for him