TIP555: Lessons from the World's Greatest Capital Allocators

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

Stig Brodersen

Business, Education, Investing

4.6 • 3.6K Ratings

🗓️ 26 May 2023

⏱️ 59 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Clay reviews one of Warren Buffett’s favorite investment books called The Outsiders by William Thorndike Jr. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro. 01:56 - How we should evaluate the performance of a CEO during their tenure. 03:01 - How Henry Singleton led Teledyne to deliver a 20.4% average annual return to shareholders during his 30 year tenure. 09:18 - How most CEOs think like foxes, while Outsider CEOs think like hedgehogs. 22:15 - What it means to be an exceptional capital allocator. 26:17 - How Katherine Graham from The Washington Post delivered a 22.3% average return to shareholders from 1971 through 1993. 32:40 - The unconventional decisions that led Warren Buffett to become known as the world’s greatest capital allocator. 52:55 - How Buffett thinks about constructing a stock portfolio. 57:24 - The most common themes in studying Outsider CEOs. Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES William Thorndike’s book – The Outsiders. Check out our newly released TIP Mastermind Community. Check out our recent episode covering the 2023 Berkshire Hathaway Shareholder Meeting or watch the video. Clay’s previous episodes covering Warren Buffett’s full story – Part 1 & Part 2, or watch the video here & here. Follow Clay on Twitter. NEW TO THE SHOW? Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. 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: River Toyota Range Rover Fundrise AT&T The Bitcoin Way USPS American Express Onramp SimpleMining Public Vacasa Shopify HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! 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 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.
0:06.0	I'm your host, Clay Fink.
0:08.0	On today's episode, I'll be doing a review of one of Warren Buffett's very favorite investment
0:12.7	books called The Outsiders by William Thorndyke, Jr.
0:16.7	This book explains how the world's greatest capital allocators delivered exceptional returns
0:21.4	to shareholders during their 10 years as CEO.
0:24.8	The book outlines a number of different CEOs, but this episode focuses on Henry Singleton
0:29.6	from Teladine, Catherine Graham from The Washington Post, and TIP's favorite Warren Buffett
0:35.0	from Berkshire Hathaway.
0:37.4	Exceptional capital allocators are very rare, and I found it helpful to read a book like
0:42.1	this to understand what excellent capital allocation looks like so I can hopefully identify
0:46.8	it myself when I see it in managers of today's public companies.
0:51.0	Without further delay, I hope you enjoy today's episode covering William Thorndyke Jr.'s
0:55.7	book The Outsiders.
1:00.6	You are listening to the Investors Podcast, where we study the financial markets and read
1:06.6	the books that influence self-made billionaires the most.
1:09.8	We keep you informed and prepared for the unexpected.
1:12.7	So as I mentioned at the top, The Outsiders is one of Warren Buffett's very favorite books,
1:27.0	and it's always interesting to study successful companies and successful CEOs, so I figured
1:31.8	it would be great to cover this book on the show.
1:34.6	This book was written by William Thorndyke Jr. and it was published all the way back in
	...

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