MI345: A Decade Outperforming The NASDAQ w/ Brian Stoffel
The Intrinsic Value Podcast - The Investor’s Podcast Network
The Investor's Podcast Network
4.6 • 592 Ratings
🗓️ 16 April 2024
⏱️ 63 minutes
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| 0:00.0 | You're listening to TIP. |
| 0:03.1 | There's two types of risk. |
| 0:04.2 | One type of risk is that I'm significantly overpaying for it, which is basically every day |
| 0:11.7 | that you wake up and you don't sell a stock, you're basically buying it, which I think is a |
| 0:16.3 | really important idea that a lot of people miss. |
| 0:18.5 | They're like, well, yeah, you got in at Shopify at $4 a share, |
| 0:22.9 | but what should I do today? And I'm like, look, I'm not selling. So that's the same as buying to me. |
| 0:29.0 | And the first risk is that you overpay. And that's what happened to Shopify for me, even though I |
| 0:34.2 | wasn't paying, I was paying. The other risk is that I look at a company |
| 0:39.1 | and I say, well, it's got a P.E. of 200, I got to sell. And then it just continues to go up and |
| 0:45.4 | up and up and up. And the reason for that is that people don't understand what happens to |
| 0:49.9 | profits or free cash flows when you're going through operating leverage. I try and assume, |
| 0:55.9 | say when I'm looking at CrowdStrike, I try and assume that today they've reached that |
| 1:02.4 | free cash flow margin. So I don't have the numbers in front of me, but let's say they've got |
| 1:07.2 | $10 billion in sales and they've got a 38% free cash flow margin, then I say, |
| 1:12.4 | okay, I'm going to put myself in a world where they have $3.8 billion in free cash flow, |
| 1:18.0 | 38% margin. How much does that have to grow to justify today's stock price? |
| 1:27.7 | Brian Stofel is an investor with one heck of a track record. |
| 1:30.5 | From December 31st, 2014 to December 31st, 2023, his portfolio has compounded at 17.7% per annum. |
| 1:39.0 | Over the same time period, the S&P 500 has done 11.3%. |
| 1:42.3 | The NASDAQ composite index has done 15%. So his strategy has been |
| 1:46.0 | crushing the market now for a decade, and it's a lot different than most strategies you'll come |
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