MI379: Quality Investing: Learnings From John Huber w/ Shawn O’Malley

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Education, Investing, Business

4.6 • 592 Ratings

🗓️ 25 November 2024

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

In today’s episode, Shawn O’Malley (@Shawn_OMalley_) explores the fundamentals of, and merits in, being a long-term, quality-focused investor, using John Huber’s success and philosophy as an example to follow. Huber is the rare money manager who truly aligns incentives with his investors by using the template created by Warren Buffett back in his days before Berkshire Hathaway. You’ll learn about what makes Huber’s fee structure special, Huber’s philosophy for investing long-term in high-quality companies, how time-arbitrage gives long-term investors a structural advantage in markets, how to blend both a focus on value and quality, the importance of assessing compounding power, how much to pay for quality companies, how changes in valuation multiples affect returns even for great businesses, plus so much more! Prefer to watch? Click here to watch this episode on YouTube. IN THIS EPISODE, YOU’LL LEARN 00:00 - Intro 01:36 - Why John Huber used the Buffett partnership fee structure in his fund 03:44 - How time-arbitrage gives investors an advantage over time 04:55 - What it means to find investments where you can win big, and if you lose, not lose much 11:40 - How to calculate ROIC and why it matters for compounders 28:11 - What price to pay for the highest-quality businesses 32:33 - How changes in price-to-earnings multiples can affect returns over time 35:36 - How to blend both value and quality as investing styles And much, much more! *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members. Saber Capital Management’s website. Check out What Is Your Investing Edge? Article from John Huber. John Huber’s latest interviews on Millennial Investing (YouTube Video) and We Study Billionaires (YouTube Video). Follow John’s Substack: Base Hit Investing. Buffett’s 1987 shareholder letter discussing returns on capital. Check out the books mentioned in the podcast here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Check out our Millennial Investing Starter Packs. Browse through all our episodes (complete with transcripts) here. Try Kyle's favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: Fiscal.AI Connect with Shawn: Twitter | LinkedIn | Email HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.8	On today's episode, I want to dig into the fundamentals of investing for the long term,
0:07.5	since I consider myself to be a long-term investor, and I know many in the audience do too.
0:11.5	And to do so, I'm using the writings and research of John Huber as my guide.
0:16.0	Huber is the managing partner of Sabor Capital, which is a partnership that's actually modeled
0:20.4	after the
0:21.0	original Buffett partnership fee structure. Huber has been a popular guest on the show and on
0:26.3	our We Study Billioners podcast, and I want to use this opportunity to really explore some of the
0:30.9	wonderful writings he's shared over the years. Huber is very much a friend of the podcast, and
0:36.4	someone I've learned a lot from, so I'm sure you'll get a lot out of today's episode too.
0:40.3	I'll discuss Huber's investment philosophy on owning quality businesses for the long term, how time arbitrage gives long-term investors advantages over the market, why return on invested capital is so important to the results that companies generate for shareholders
0:54.2	over time, to what extent purchase price and changes in valuation multiples affect the
0:58.6	returns you'll receive for companies of different quality, and so much more. With that,
1:02.7	let's dive right into the episode.
1:08.4	Celebrating 10 years, you are listening to Millennial Investing by the Investors Podcast Network.
1:14.5	Since 2014, we have been value investors' go-to source for studying legendary investors,
1:20.3	understanding timeless books, and breaking down great businesses.
1:24.4	Now, for your host, Sean O'Malley.
1:36.2	Thank you. businesses. Now, for your host, Sean O'Malley. I'm really excited to highlight some of my favorite takeaways from the wonderful John
1:39.7	Hubert today, who has built up an impressive track record while running Saber Capital
1:44.0	Management.
1:44.9	Before we jump into his writings, I want to discuss the fee structure he uses with his investment
	...

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