TIP651: Value Investing in a Growth-Obsessed Market w/ Scott Barbee

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 11 August 2024

⏱️ 63 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Kyle Grieve chats with Scott Barbee about how he managed to maintain a deep value-based strategy while it’s gone out of fashion, the three buckets of risk Scott uses to assess businesses, what a genetic contrarian is and why it can be a powerful advantage, why fossil fuels aren’t going anywhere anytime soon and why opportunities exist in that industry, how he navigated a 72% drawdown during the GFC, and a whole lot more! Scott is the founder of the Aegis Value Fund. Which was created in 1998. Prior to Aegis, Scott worked as an analyst covering oilfield services at Simmons & Company. He also had a stint as a deep value advisor for Donald Smith & Company. He received his MBA from the Wharton School and the University of Pennsylvania. He also holds a B.S in Engineering and a B.A in Economics. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 02:41 - Some of the key lessons he learned from investing legends like Bill Ackman, Bob Robotti, Peter Cundill, and Walter Schloss 08:17 - How Scott has managed to maintain a value-based strategy when many investors have bailed to chase more expensive stocks 12:00 - Scott's three buckets of investing risk 16:10 - A breakdown of the concept of a "genetic contrarian." 17:30 - Why risk management is key to investing in businesses with high levels of uncertainty and how to take advantage of it 24:27 - Scott's views on energy and how fossil fuels are unlikely to disappear anytime soon 33:36 - The potential downsides Scott sees in super high-quality businesses 34:41 - Why lower-quality businesses with volatile earnings look very attractive right now due to a widespread de-leveraging 43:55 - How Scott dealt with a 72% drawdown during the GFC And so much more! 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 about the Aegis fund here. Read Scott’s Manager Letters here. Follow Kyle on Twitter and LinkedIn. 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 Range Rover Fidelity Fundrise Sound Advisory AT&T The Bitcoin Way SimpleMining BAM Capital American Express Onramp Public USPS 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	Does traditional value investing still work today?
0:05.6	You know, the low price to book and low price to earning strategies that Graham and Buffett
0:09.3	made so popular many decades ago?
0:11.5	I think most investors have moved away from that style as more and more money goes into many is defied the odds, sticking to the principles of value investing.
0:23.7	And while you can find many institutions that hold alphabet, Amazon, and Microsoft, not many of these
0:28.6	closet index funds have actually beaten the market.
0:31.4	But Scott Barbie's AGES Value Fund has beaten the market,
0:34.3	compounding at 11% since inception in 1998 versus the S&P 500
0:38.7	index's results of only 7.8%. In today's chat, we'll cover some of the primary reasons why Scott has outperformed
0:44.7	the market, why he prefers to be in stocks that very few other investors will touch,
0:49.3	how he dealt with drawdowns during the great financial crisis, how he tries to avoid unconventional errors,
0:54.8	how he's managed to create alignment with his investing team and the funds investors, and a whole lot more.
0:59.8	Whether you're a value investor looking for your next beaten down industry or idea to research or just want to
1:04.4	improve your ability to deal with volatile markets, you'll take something valuable away from today's
1:09.0	episode. Now let's get right into this week's episode with Scott Barbie.
1:13.2	Celebrating 10 years and more than 150 million downloads.
1:21.0	You are listening to the Investors Podcast Network.
1:23.0	Since 2014, we studied the financial markets and read the books that influence self-made billionaires the most.
1:30.0	We keep you informed and prepared for the unexpected.
1:33.0	Now for your host Kyle Grieve and today we bring
1:48.8	Scott Barbie onto the show. Scott welcome to the podcast.
	...

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