The Darkest Night: Lessons from Battle and Value Investing, with Mike Zapata – [Invest Like the Best, EP.89]

My guest this week is remarkable. He now applies his talents on Wall Street, searching for smaller cap companies trading at huge discounts in an effort to compound wealth for his investors. He is classically trained, having earned his graduate degree from Colombia, a school known for producing value investors. But his method also reflects what he learned across more than a decade of active duty in the U.S. military.

Mike Zapata served us all as a Navy SEAL in the aftermath of 9/11 and ultimately as a member of the SEAL’s “Development Group,” commonly known as SEAL team 6. I think everyone listening strives for excellence in what they do. This week we get to hear from someone who has pursued excellence on our behalf.

I’ll let him explain the meaning of his firm’s name, Sententia, but for now suffice to say we are lucky to have quiet professionals like Mike. If you are interested in supporting the families of soldiers who fought with Mike and lost their lives, I encourage you to check out the Tip of the Spear foundation and make a donation along with me, small or large.

Please enjoy my conversation with Mike Zapata.

Books Referenced

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

Fearless: The Undaunted Courage and Ultimate Sacrifice of Navy SEAL Team SIX Operator Adam Brown

Boyd: The Fighter Pilot Who Changed the Art of War

 

Show Notes

2:23 – (First Question) – A quick overview of Mike’s career leading up to his time at Columbia

3:43 – What led him down the path of value investing at Columbia

3:51 – The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

5:57 – The focus and goal of the firm

7:12 – Where the name of the firm, Sententia comes from

8:04 – His experience in the Basic Underwater Demolition/SEAL (BUD/S) program and lessons learned from it

13:14 – How much grit is innate vs can be learned

14:59 – What the actual job was in BUD/S

17:33 – Difference between the broader SEAL community and being part of the more exclusive development group

19:03 – The team dynamic within the SEALS

20:26 – Fearless: The Undaunted Courage and Ultimate Sacrifice of Navy SEAL Team SIX Operator Adam Brown

21:18 – The sacrifice that SEALs make with the story of Adam Brown as an example

24:35 – Waiting for darkness before deployment

27:23 – How do you know when to violate your best practices for a risk

29:26 – A look at three pictures in his office and why they are meaningful

31:36 – Lessons that would be useful to other people

33:10 – Boyd: The Fighter Pilot Who Changed the Art of War

33:17 – How is Mike’s skillset applied to the investing world

39:24 – Factors that would be seen as good alignment in businesses

40:18 – How the view the profiles of other investors in these small businesses

41:46 – Examples of “smoke and fire”, markers of an attractive investment

43:42 – Other investors that he has learned the most from and what those lessons were

44:54 – Importance of balance sheets in value investing

47:33 – Is value investment oversaturated

50:28 – Market blind spots that are attractive to Mike

52:03 – What point in Mike’s career has he felt the most alive

53:14 – Any other lessons Mike would want to share

55:12 – Kindest thing anyone has done for Mike