Scott Davis & Rob Wertheimer - Lessons from the Industrial Titans - [Invest Like the Best, EP.324]

Invest Like the Best with Patrick O'Shaughnessy

Colossus

Technology, Business, Investing

4.7 • 2.5K Ratings

🗓️ 11 April 2023

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

My guests today are Scott Davis and Rob Wertheimer. Scott and Rob head up Melius Research and are the authors of a great book called Lessons from the Titans. The book explains what the industrial giants of old can teach the new generation of high-growth businesses about how to survive and deliver shareholder value over multiple decades. Drawing on their experience as industrial analysts, they present case studies on businesses like Danaher, Roper, Honeywell, Boeing and GE to reveal both what does and doesn’t work when it comes to capital allocation and business strategy as a company enters a more mature phase in its lifecycle. Please enjoy my conversation with Scott and Rob. Read Lessons from the Titans Listen to Founders Podcast Founders Episode 136 - Estee Lauder Founders Episode 288 - Ralph Lauren For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:03:20) - (First question) - The intersection between the current tech sector drawdown and the historical track record of industrial titans (00:07:10) - The most common ways they see companies start to fail and the types of errors they commit (00:11:01) - The best historical examples of companies that have gone from non-operational excellence to operational excellence (00:15:04) - Teaching the value of a business system and installing one for longevity (00:24:06) - Questions they’d ask and points of evaluation to uncover the health of a business (00:31:19) - Thinking about sustainable value creation in a lower growth environment (00:37:04) - Lessons from operating leverage and the rental industry (00:39:11) - Ways industrial companies have handled growth CapEx well and badly (00:43:52) - The line between discovering the future in a lab versus major pivots in reality while trying to solve today’s problems (00:49:37) - How the best managers nurture a great shareholder base (00:55:35) - Lessons to learn about business model transitions (01:00:13) - Further important messages from their book that businesses would benefit from (01:04:30) - The kindest things anyone has ever done for them

Transcript

Click on a timestamp to play from that location

0:00.0	This episode is brought to you by TIGAS, the modern research platform for leading investors.
0:05.0	I'm a long time user and advocate of TIGAS, a company that I've been so consistently impressed with that last fall my firm positive sum,
0:12.0	invested $20 million to support TIGAS's mission to expand its product ecosystem to unify and streamline investor research processes.
0:19.0	In addition to the library of 55,000 transcripts, TIGAS now combines at-cost on-demand calls with a full suite of financial workflows.
0:28.0	Whether it's quantitative analysis, company disclosures, management presentations, earnings calls,
0:33.0	TIGAS has tools for every step of your investment research. They even have over 4,000 fully-driveable financial models.
0:40.0	TIGAS's maniacal focus on quality, as well as its depth, breadth, and recency of content, makes it the one-stop end-to-end research platform for investors.
0:49.0	Move faster, gather deep research to build conviction and surface high-quality alpha-driving insights to find your differentiated edge with TIGAS.
0:56.0	As a listener, you can take the TIGAS platform for a free test drive by visiting tegas.co-slashpatrick.
1:03.0	For more information, visit TIGAS.co-slashpatrick.com
1:03.0	Hello and welcome everyone. I'm Patrick O'Shanasi and this is Invest Like The Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money.
1:26.0	Invest Like The Best is part of the Colossus family of podcasts and you can access all our podcasts including edit the transcripts, show notes, and other resources to keep learning at Join Colossus.com.
1:41.0	Patrick O'Shanasi is the CEO and founding partner of Positive Sum and the CEO of O'Shanasi Asset Management.
2:09.0	All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum or O'Shanasi Asset Management.
2:16.0	This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
2:25.0	Clients of Positive Sum or O'Shanasi Asset Management may maintain positions and the securities discussed in this podcast.
2:32.0	My guests today are Scott Davis and Rob Werthimer. Scott and Rob head up Melius Research and are the authors of a great book called Lessons From the Titans.
2:41.0	The book explains what the industrial giants of old can teach the new generation of high growth businesses, how to survive and deliver shareholder value over multiple decades.
2:50.0	Drawing on their experience as industrial analysts, they present case studies on businesses like Dan Her, Roper, Honeywell, Boeing, and GE to reveal both what does and doesn't work when it comes to capital allocation and business strategy as a company enters a more mature phase in its life cycle.
2:59.0	Please enjoy my conversation with Scott and Rob.
3:14.0	So Rob and Scott, I'm so appreciative of your time today. I'm really excited to dive into the many lessons that you've learned from industrial Titans in business and stock market history.
3:18.0	You mentioned before we hit record that your book, which isn't that old, has really been hitting it stride recently probably because so many of these lessons have seemingly become more applicable, especially to the technology sector in the last year, year and a half or thereabouts.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Colossus, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Colossus and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.