TIP544: Life-Changing Returns in Cyclicals & Spinoffs

The Investor's Podcast (We Study Billionaires) - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 11 April 2023

⏱️ 58 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Clay continues his review of Gautam Baid’s book, The Joys of Compounding. Today’s episode is part 3 of our review of this incredible book. Gautam Baid is the Managing Partner and Fund Manager of Stellar Wealth Partners India Fund, a Delaware-based investment partnership which is available to accredited investors in the US. The fund is modeled after the Buffett Partnership fee structure and invests in listed Indian equities with a long-term, fundamental, and value-oriented approach. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 02:15 - How journaling can make us better investors. 07:00 - Why incentives are at the root of all human behavior. 09:22 - How management incentives impact our long-term returns as investors in businesses. 18:15 - Why being directionally right is more important than being precise in assessing the intrinsic value of a business. 25:37 - How maintenance capex impacts the value of a business. 32:14 - Ways in which value investors fall for value traps. 32:45 - Why we as investors should respect the market’s wisdom for pricing stocks. 35:09 - The three most important words of investing. 41:25 - How high-quality businesses enhance our margin of safety. 47:55 - How one commodity investment catapulted Gautam to nearly achieving financial independence. 53:36 - Why Seth Klarman, Peter Lynch, and Joel Greenblatt consider spinoffs to be ripe hunting grounds for investors. Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Check out the book, The Joys of Compounding. Tune into our previous episodes covering The Joys of Compounding: Part 1 & Part 2. Watch the videos here and here. Check out our recent episode covering Mark Leonard's Letter's and Constellation Software. Watch the video here. Check out Clay’s YouTube video calculating the intrinsic value of Constellation Software here. Follow Clay on Twitter. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Range Rover Fundrise AT&T The Bitcoin Way USPS American Express Onramp SimpleMining Public Vacasa Shopify 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 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.
0:03.0	Hey everyone, welcome to the Investors Podcast.
0:05.5	I'm your host, Clay Fink.
0:07.0	For those of you who have been tuning into my recent episodes,
0:10.0	you know that I'm currently covering Godam Bade's book,
0:13.0	The Joys of Compounding.
0:14.0	Today's episode is part three of our series covering the book.
0:17.0	And as I've mentioned before, most of the chapters in the book
0:20.0	are somewhat standalone, so you're able to listen to each episode separately.
0:24.0	But the episode you're listening to is part three of my series covering his book.
0:29.0	In part one, episode 534, I touched on more of the personal development side of the book,
0:34.0	such as why it's really important we invest in ourselves,
0:37.0	and embrace lifelong learning, as well as the biggest edge we can have as individual investors.
0:42.0	In part two, episode 536, I covered the virtues of philanthropy and good karma,
0:47.0	the importance of achieving financial independence,
0:50.0	why the key to success is delayed gratification,
0:53.0	how to properly assess a management team and much more.
0:56.0	On today's episode, I'll be covering chapters 15 through 21.
1:00.0	I'll touch on how journaling can make us better investors,
1:03.0	why it's so important to understand the power of incentives,
1:06.0	how some investors fall for value traps,
1:09.0	the three most important words of investing,
	...

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