TIP622: Finding Certainty in an Uncertain World w/ Joseph Shaposhnik

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 12 April 2024

⏱️ 75 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Clay sits down with Joseph Shaposhnik to discuss his high quality investing approach. Since its inception in 2015, the TCW New America Premier Equities fund has compounded at 15.8% per year versus the benchmark of 12.0%. Joseph is the Portfolio Manager of TCW New America Premier Equities, Global Premier Sustainable Equities, and Global Space Technology Equities portfolios. According to Nasdaq eVestment, the TCW New America fund has outperformed 99% of its peers. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 03:25 - The two types of recurring revenue. 13:37 - Why certainty is an essential part of a quality investing framework. 25:02 - How Joseph thinks about portfolio allocation by industry. 28:02 - Value accretive versus value destructive capital allocation decisions. 36:09 - How understanding incentives can make us better investors. 36:53 - Why we should ignore Buffett’s advice of buying businesses so great that an idiot can run it. 46:33 - How Joseph developed his own investment approach after working under two investment legends at Fidelity. 51:56 - Why Joseph believes that quality investing is the best approach to match his investment objectives and temperament. 58:33 - Why growth in free cash flow per share is Joseph’s number one focus as an investor. 1:00:28 - An update on a few of Joseph’s portfolio holdings 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, Kyle, and the other community members. Learn more about the TCW New America Fund. Check out Buffett’s 1996 Shareholder Letter. Book Mentioned: What I Learned About Investing from Darwin by Pulak Prasad. Book Mentioned: Big Money Thinks Small by Joel Tillinghast. Episode Mentioned: RWH017: Fidelity Legend w/ Joel Tillinghast | YouTube Video. Follow Joseph on LinkedIn. Follow Clay on Twitter. Check out all the books mentioned and discussed in our podcast episodes 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 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 TurboTax Fidelity Monarch Money Meyka Simon & Schuster CI Financial Vacasa Long Angle Fundrise iFlex Stretch Studios American Express 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! 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	On today's episode, I sit down with Joseph Shapashnik.
0:07.0	Joseph is the portfolio manager of TCW New America Premier Equities.
0:11.8	Since its inception in 2015, the fund is compounded at 15.8% per year net of fees
0:17.7	versus the benchmark of just 12%. I admire not only how brilliant of an investor Joseph is, but also his humility and his commitment to continuous improvement.
0:27.5	In his Q4 2023 shareholder letter, he wrote, I quote,
0:31.3	Since our strategy's inception on July 31st 2015 TCW New America
0:36.6	has outperformed 99% of its peers according to NASDAQ E. Vestman. While we
0:42.0	take pride in our outperperformance, we never declare victory.
0:45.6	We strive to continuously improve upon it, end quote.
0:48.9	Getting to the top is extraordinarily difficult, but staying there is also difficult, and I believe that this level of humility will take Joseph far.
0:56.7	Joseph puts an intense focus on only investing in superior businesses that have long runways for growth coupled with a patient
1:04.3	approach to sitting on these companies for many years. For example, Joseph's
1:08.4	top holding constellation software is now over 19% of his fund as he took to heart Peter Lynch's approach of not cutting the flowers to water the weeds.
1:17.5	He recognizes that just a single investment held for a long period of time can contribute tremendously to generating exceptional long-term returns.
1:26.0	During this chat Joseph and I cover why certainty is an essential part of a quality investing framework.
1:31.3	The two types of recurring revenue, how Joseph thinks
1:34.3	about portfolio allocation by industry given that so many quality businesses are in
1:38.6	the software industry, how understanding incentives can help make us better
1:42.0	investors, value a creative versus value understanding incentives can help make us better investors.
1:43.0	Value a creative versus value destructive capital allocation decisions.
1:47.5	Why we should ignore Buffett's advice of buying businesses so great that an idiot can run them. How Joseph developed his own
	...

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