TIP692: Reading the Signals: How To Identify Winning Investments w/ Andrew Martin

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 19 January 2025

⏱️ 68 minutes

🔗️ Recording | iTunes | RSS

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Summary

In today's episode, Kyle Grieve chats with Andrew Martin about how he utilized his PhD in investing, the typical traits Andrew looks for in great investments, valuable physics-related mental models to improve your thinking processes, why Andrew is attracted to smallcap stocks, how Andrew utilizes his inflection point strategy to beat the market, how he evolved from an asset-based investor to where he is today, how to think about technological disruption in low-tech industries and much more! Andrew Martin is the CEO of Fairlight Capital. Andrew has decades of experience working for large global insurance companies and asset managers managing billions of dollars. He has worked with companies such as Accenture and AIG. Andrew graduated with a B.Sc. in Theoretical Physics from the University of York and a doctorate in Astrophysics from the University of Oxford. IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 05:06 - The physical cue that Andrew looks out for to help him subconsciously identify fantastic investing opportunities. The traits that Andrew searches for in potential investments. 10:53 - How to combat biases in investing to avoid making big mistakes. 12:56 - How to utilize a natural contrarian nature to your advantage in investing. 16:59 - A valuable earthquake mental model to help you find hidden fundamentals that the market can overlook. 28:09 - Why Andrew settled on investing in small-caps. 33:24 - Why Andrew has a few concentrated positions while maintaining a few more minor positions. 38:35 - Andrew's evolution from an asset-based value investor to a growth at a reasonable price investor. 01:02:04 - How technology is disrupting low-tech industries and rapidly transforming business models. 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. Read Andrew’s investor 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: Hardblock SimpleMining Unchained The Bitcoin Way Found Fintool Bluehost Vanta Fintool PrizePicks Onramp TurboTax Fundrise HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! 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 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	I think it's safe to say that today's guest, Andrew Martin, has crushed the S&P 500's total return since 2019.
0:10.1	In that time span, his fund, Fairlight Capital, has compounded at an impressive rate of 38% per annum, versus the S&P 500's rate of 16%.
0:18.8	Andrew first came into my radar for writing a piece on a business
0:22.3	that we both hold in common. However, after taking a deeper look into some of his other holdings
0:28.1	and finding his impressive track record, I wanted to learn more about what he was doing.
0:32.5	We'll discuss the physical cue that Andrew uses to help him subconsciously identify when he
0:36.5	comes across an investing opportunity with loads of potential. If you've ever found a physical cue that Andrew uses to help him subconsciously identify when he comes across an investing opportunity with loads of potential. If you've ever found a physical cue to help prompt
0:42.1	you to go deeper into an idea, you're definitely going to resonate with this. We'll also cover
0:46.8	some of the common characteristics that Andrew finds in businesses that get Andrew excited to go
0:51.2	down the rabbit hole. Since Andrew has a PhD, I wanted to find out how he's used this to his advantage, specifically
0:57.6	in the world of investing.
0:59.3	And interestingly, he had this really novel mental model from his days in physics that
1:02.9	have helped him think about why some of these excellent investment opportunities exist
1:06.8	in the first place.
1:07.9	He also uses mental models to help identify catalysts that can bring
1:11.3	sudden movements in a stock price both upward and downward. This mental model can help you find
1:16.5	hidden upsides in the market that hasn't yet been priced in, which is obviously a very, very
1:20.2	valuable tool to have in your toolkit. Another interesting theme I wanted to discuss in some detail
1:25.4	was technology. Andrew isn't the type of investor
1:29.1	who's going to own the Magnificent Seven, but he's clearly thought very deeply about how the
1:33.9	benefits of technology have helped reshape numerous businesses and industries. We'll go over his
1:38.9	thought process and he'll share a name that I think was thought of as a low-tech business that is rapidly
	...

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