Value Investing with Legends – Details, episodes & analysis

In this episode, host Tano Santos sits down with Richard Brekka, founder and managing partner of Second Alpha, to examine the lesser-known world of secondary investing in private technology companies. With decades of experience—from venture capital to secondary transactions—Richard shares his journey through private equity at Chase and CIBC, his role in building and reviving companies like Gomez Inc., and how that led him to identify a unique investment niche. He explains the mechanics of sourcing deals in illiquid markets, using data and AI to surface hidden gems, and the psychology of getting deals done. The discussion also explores valuations, exits, and policy implications of private market access for 401(k) investors, plus the impact of AI on business fundamentals and much more!

Key Topics:

● Richard's early exposure to entrepreneurship and finance (3:29)

● Lessons from Arthur Laffer and University of Chicago MBA experience (6:15)

● Early career in private equity at Chase and learning value investing (8:12)

● Starting Dolphin Equity Partners after CIBC and early challenges (14:06)

● The rise and fall—and rebirth—of Gomez Inc. (17:18)

● Discovering secondary investing through Gomez's cap table (23:58)

● The founding and investment strategy of Second Alpha (26:29)

● Understanding the structure and dynamics of the secondary market (30:21)

● How Second Alpha sources deals and builds its data pipeline (35:49)

● The process of deal execution and managing rights of refusal (41:11)

● Case study: Prove Identity and growth through secondaries (52:29)

● Thoughts on liquidity, valuation, and 401(k) access to private markets (55:35)

● AI's impact on private companies and investment strategies (59:19)

● Book and podcast recommendations (1:01:34)

● And much more!

Mentioned in this Episode:

● Second Alpha

● Chase

● CIBC

● Gomez Inc.

● Prove Identity

● TouchCommerce

● Arthur Laffer

● Acquired (podcast)

● Warren Buffett – Berkshire Hathaway Annual Letters

● Berkshire Hathaway Annual Shareholder Letters

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Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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Amit Wadhwaney, founding partner and portfolio manager at Moerus Capital Management, joins hosts Tano Santos and Michael Mauboussin to trace his unorthodox journey from Bombay to Concordia to founding a value investing firm focused on the balance sheet. Along the way, he discusses his early exposure to Marty Whitman, lessons from Third Avenue's international expansion, and what led him to start Moerus.

Amit outlines the core of his investment approach—asset-based valuation, downside protection, and long-term holding periods—and explains why macro factors are typically disqualifiers, not drivers, in his process. He shares insights into portfolio construction, the role of currency risk, and how Moerus identified undervalued opportunities in places like Argentina, Japan, and the gold sector.

Key Topics:

● Growing up in India and finding investing through chemical engineering and economics (3:04)

● Discovering Marty Whitman via an obscure academic book on value investing (5:05)

● Lessons from selling real estate during Quebec's post-referendum panic (9:23)

● Joining MJ Whitman and watching Third Avenue evolve (11:12)

● Pioneering international value investing at Third Avenue (17:05)

● Founding Moerus Capital: philosophy, culture, and investment constraints (24:38)

● Moerus's asset-based investment framework (28:48)

● Managing macro risk and volatility through conservatism, not forecasts (30:41)

● Risk management: internal, external, and business model-related risks (33:00)

● Portfolio construction, position sizing, and concentration limits (46:39)

● Currency exposure and when to hedge (49:12)

● Case studies: Grupo Galicia and Despegar during Argentina's political shift (51:15)

● What keeps Amit up at night: industrial policy, broken immigration, and political gridlock (1:00:52)

● What Amit is reading—and what the Norton Simon Museum can teach investors (1:03:39)

● And much more!

Mentioned in this Episode:

● Moerus Capital Management

● Third Avenue Management

● MJ Whitman

● Marty Whitman

● Grupo Financiero Galicia

● Despegar.com

● Wheaton Precious Metals

● Major Drilling Group

● Dundee Corporation

● UniCredit

● LATAM Airlines

● Journal of Economic Literature

● Shubik and Whitman's The Aggressive Conservative Investor

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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In the third episode of Season 10, hosts Tano Santos and Michael Mauboussin speak with James Bessen, Executive Director of the Technology and Policy Research Initiative at Boston University. Delving into the intricacies of technological advancement and market dynamics, Bessen shares his insights on the evolving landscape of competition and innovation. The discussion highlights the impact of proprietary software on industry disruption, exploring the significant shift from mass production to mass customization facilitated by technology. This episode not only provides a deep dive into the challenges and opportunities presented by the digital age but also prompts a reflection on the future of value investing in a tech-dominated world and so much more!

Key Topics:

• Welcome to Season 10 of Value Investing with Legends (0:20)
• Exploring the concept of barriers to entry in value investing (1:05)
• James Bessen discusses technology's economic impact (3:15)
• Analysis of the decline in economic disruption despite technological growth (5:10)
• Impact of proprietary software on industry stability and market concentration (6:35)
• Historical perspective on technology's influence on the economy (8:25)
• The role of proprietary software in shaping competitive dynamics (10:30)
• The transition from mass production to mass customization in retail (12:05)
• Walmart's evolution and strategy in retail sector dynamics (14:20)
• Discussion on the concept of skill premium and technological advancements (24:55)
• Artificial intelligence's influence on market dynamics and job skills (26:10)
• Examining the pace and implications of innovation diffusion (31:00)
• Regulatory challenges and tech dominance in the market (34:10)
• Concentration of innovation and its economic implications (36:20)
• James' book recommendations (43:10)
• And much more!

Mentioned in this Episode:

• The New Goliaths: How Corporations Use Software to Dominate Industries, Kill Innovation, and Undermine Regulation by James Bessen
• Learning by Doing: The Real Connection between Innovation, Wages, and Wealth by James Bessen
• The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon
• The Lever of Riches: Technological Creativity and Economic Progress by Joel Mokyr
• Worldly Philosopher: The Odyssey of Albert O. Hirschman by Jeremy Adelman

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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In this episode, Tano Santos sits down with Jan Hummel, CIO of Paradigm Capital, revisiting his investment strategies and exploring the nuanced dimensions of risk management in the evolving European asset landscape. Jan discusses the foundational investment philosophy of Paradigm Capital, emphasizing risk minimization and the strategic deployment of assets across Europe. Key discussions pivot around the firm's selective investment criteria, focusing on companies in the small to mid-cap space and the significance of geographical and cultural nuances in their investment decisions. This conversation offers listeners insights into the subtleties of value investing, portfolio construction, the implications of geopolitical and economic dynamics on market opportunities, and so much more!

Key Topics:

• Introduction and background of Jan Hummel (0:37)
• Fundamental tenets of investment philosophy at Paradigm Capital (1:25)
• The impact of European market dynamics on investment strategies (7:25)
• Sourcing and valuing investment opportunities (9:47)
• Specific approaches to risk management and hedging strategies (22:23)
• Portfolio sizing and the decision-making process behind exiting investments (26:00)
• The role of geographical focus in Paradigm's investment strategy (29:12)
• Valuation techniques and practical applications in portfolio management (32:03)
• Trends and challenges in the European asset management industry (36:48)
• Macro-economic factors influencing market conditions and investment decisions (40:30)
• Prospects for growth and opportunities in the European financial landscape (45:17)
• Jan's book recommendations (46:06)
• And much more!

Mentioned in this Episode:

• The Fiscal Theory of the Price Level by John Cochrane
• Paradigm Capital
• Columbia Business School

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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In this heartfelt episode, we pay tribute to Charlie Munger, the visionary vice chairman of Berkshire Hathaway who recently passed away. Joining us is Todd Combs, an investment officer at Berkshire Hathaway and a close acquaintance of Munger. Todd shares personal anecdotes and insights into Munger's profound influence on the investment world and his unique approach to life and business. From his early meetings with Munger to the invaluable lessons on value investing and rational thinking, Todd provides an intimate look into the wisdom of one of the greatest investors of our time.

Key Topics:

• Celebrating Charlie Munger's contributions and legacy (01:20)
• Todd's initial encounters with Munger (02:15)
• The intellectual journey and partnership between Munger and Buffett (08:57)
• Munger's approach to life, investing, and the importance of mental models (11:22)
• Behavioral economics insights shared by Munger (13:00)
• The practical applications of Munger's wisdom in business and investing (16:17)
• Munger's lasting impact (24:59)
• And much more!

Mentioned in this Episode:

• Poor Charlie's Almanack: The Essential Wit and Wisdom of Charles T. Munger by Charles T. Munger 
• Thinking, Fast and Slow by Daniel Kahneman 

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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Today's discussion with Kim Lew, President and CEO of the Columbia Investment Management Company, traverses her unique journey from her roots in the Bronx to managing a prominent Ivy League endowment. Kim shares her insights on navigating the intricate world of investment management, particularly in risk management and asset allocation. With a career marked by pivotal roles at entities like the Ford Foundation and Carnegie Corporation, her expertise brings a nuanced understanding of the interplay between market dynamics and organizational strategy. This episode explores how adaptability, intellectual curiosity, and understanding global trends shape successful investment approaches.

Key Topics:

• Kim's early career and transition to finance (2:59)
• Role at Chemical Bank and career progression (5:05)
• Experience at Prudential Capital and Ford Foundation (9:27)
• Shift to Carnegie Corporation and Columbia Investment Management (18:07)
• Challenges of managing a larger endowment (20:13)
• Aligning endowment goals with university values and ESG considerations (22:08)
• Comprehensive approach to risk management (26:54)
• Asset allocation and balancing public vs. private markets (34:06)
• The concept of future-proofing investment strategies (41:19)
• Organizational behavior in asset management (48:54)
• Importance of intellectual curiosity in team members (55:11)
• Kim's book recommendations (1:01:01)
• And much more!

Mentioned in this Episode:

• Columbia Finance
• The Worlds I See: Curiosity, Exploration, and Discovery at the Dawn of AI by Fei-Fei Li
• Quit: The Power of Knowing When to Walk Away by Annie Duke
• Hidden Potential: The Science of Achieving Greater Things

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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In the complex world of financial markets and economic fluctuations, John Armitage, a seasoned investment maestro, sits down with us today. As the chief strategist behind the success of Egerton Capital, Armitage brings his profound insights into navigating the complexities of portfolio management and the subtle art of risk-taking in fluctuating markets. His expertise, honed through years of experience, sheds light on the critical impact of macroeconomic shifts and the pitfalls that stock pickers often encounter amidst outdated corporate data. This episode delves into passive investing, dissecting the crucial role of competitive dynamics in sectors like European aviation and examining the transformative impact of a growing talent pool on the traditional realms of asset management. Armitage also ventures into the ethical crossroads, intertwining moral integrity, societal upheaval, and the revolutionary wave of artificial intelligence. We uncover his focus on growth, governance, and quality, underpinned by a meticulous decision-making process at Egerton Capital, his literary pursuits, pondering over the influence of literature on his investment philosophy, and so much more!

Key Topics:

• Overview of Egerton Capital (1:42)
• Transitioning from broad ideas to specific investments and the role of specialization (8:29)
• Egerton Capital's approach to researching new investment opportunities (12:58)
• Understanding market signals and opposing investment perspectives (15:46)
• John's approach to portfolio building and decision-making in investing (20:00)
• Client importance, portfolio building, and decision-making in investing (23:37)
• Luck, being in the right place at the right time, and mentorship (28:07)
• Managing portfolio volatility and the frequency of financial crises (30:54)
• John's positive outlook on reinsurance space and companies like Ryanair and Meta (35:31)
• The future of stock picking and asset management (41:19)
• What worries John and excites him about the future (43:09)
• John's book recommendations (45:29)
• And much more!

Mentioned in this Episode:

• Egerton Capital
• The Golden Mole and Other Living Treasure by Katherine Rundell
• Super-Infinite - The Transformations of John Donne by Katherine Rundell
• The Fall of Robespierre: 24 Hours in Revolutionary Paris by Colin Jones
• The Sword and the Shield by Christopher Andrew and Vasilli Mitrokhin

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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In the intricate dance of market movements and economic trends, it takes a discerning eye to discern patterns and make strategic decisions. Enter Nicolai Tangen, the astute CEO of Norges Bank Investment Management, who joins hosts Michael Mauboussin and Tano Santos on Value Investing with Legends. A connoisseur of art history and asset management, Nicolai offers a rare blend of expertise, drawing parallels between the seemingly disparate worlds of art and investment. His approach, marked by a blend of rigorous analysis and intuitive pattern recognition, reveals the underpinnings of a global economy shrouded in paranoia and driven by innovation. In this episode, Nicolai unfolds his journey from being an art student to leading one of the most prominent investment funds, highlighting how understanding historical context informs risk appetite. He brings to the forefront the role of AI in transforming investment strategies and the delicate balance of managing a substantial portfolio while maintaining a contrarian stance. Tune in to learn about the psychological aspects of risk assessment, the implications of AI on future investment strategies, the value of contrarian thinking in an ever-changing market, and so much more!

Key Topics:

• Nicolai's journey from Russian military studies to financial expertise at Wharton (2:45)
• Nicolai's foundational career experiences with John Armitage at Egerton Capital (4:04)
• The refreshing and insightful sabbatical Nicolai took to study art history (6:42)
• AKO Capital's strategy: selecting high-quality stocks for robust growth and solid returns (9:17)
• Investing success through deep reading, contemplative analysis, and rare decisive action (10:34)
• The critical role of pattern recognition in navigating financial uncertainties (13:51)
• Post-mortem analysis as a vital component of investment strategy refinement (15:41)
• The importance of contrarian perspectives in investment strategy and team development (19:09)
• Delving into CEOs' insights on market trends and the underestimated influence of corporate culture (23:04)
• Adapting from selecting individual assets to managing broad asset classes with team collaboration (26:48)
• Proactive engagement in corporate governance through ESG-focused voting practices (30:33)
• The inescapable responsibility of managing a globally influential investment fund (33:08)
• Balancing the promising prospects of AI with the imperative of managing social risks (35:36)
• Defining fund success beyond returns: robust processes and a motivated, fulfilled team (38:07)
• What keeps Nicolai up at night and excited about the future (40:40)
• Nicolai's book recommendations (43:24)
• And much more!

Mentioned in this Episode:

• Norges Bank
• AKO Capital
• Egerton Capital
• Adam Grant - Think Again: The Power of Knowing What You Don't Know
• Angela Duckworth - Grit: The Power of Passion and Perseverance
• Amy Edmonson - Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy
• Annie Duke - Quit: The Power of Knowing When to Walk Away 

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

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John Rogers isn't just a successful investor; he's an industry titan. As the founder of a reputable investment firm, he's made a name for himself with his contrarian value investing strategies. But he's not just a practitioner; he's an educator, avidly reading and contributing to seminal works in investment literature. John's journey began with an early fascination for finance from his youthful days. A Princeton alumnus, he entered the turbulent waters of the stock market and turned a calamity—the infamous crash of 1987—into a career-defining opportunity. In today's episode, John joins us to discuss his formative experiences, the philosophical underpinning of his investment strategy, and the importance of thinking long-term. We also delve into his roles on various corporate boards, where he weighs in on 401k plans, corporate governance, the pivotal role of diversity in creating equal opportunities for minority businesses, and so much more!

Key Topics:

• An overview of John's professional background (2:15)
• John's journey from William Blair to founding Ariel Investments (07:42)
• The 1987 market crash as a turning point for Ariel's value investing approach (10:04)
• John's philosophy on patient, research-heavy, value-based investing (13:07)
• How longevity in markets solidified John's faith in efficiency (19:15)
• The mechanics of idea generation at Ariel Investments (23:30)
• Ariel's methodology for dissecting investment errors (29:53)
• Drawing teamwork and pressure-handling lessons from Coach Carril (35:20)
• How board experience informs his investing (37:47)
• John's focus on value investing and cautious approach to buybacks (42:20)
• Why John is optimistic about The Sphere in Las Vegas and Adelum (46:18)
• John's fulfillment from social engagement and its business impact (50:18)
• What keeps John up at night and excited about the future (55:48)
• John's book recommendations (57:41)
• And much more!

Mentioned in this Episode:

• Turn Every Page: The Adventures of Robert Caro and Robert Gottlieb
• Jonathan Eig | King: A Life
• Morgan Housel | The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Navigating the investment world is an enormous task, especially when looking at company numbers and the people running them. That's why we're thrilled to have Sheldon Stone on the show. Sheldon was the first in his family to go to college, attending the highly respected Bowdoin College. He was part of a remarkable class of 225 students, an experience that shaped his unique perspective on life and career. Hailing from New Jersey, Sheldon Stone has had a fascinating career journey. His time at Bowdoin wasn't just about hitting the books; it also laid the groundwork for his expertise in bonds and financial markets. In today's episode, hosts Michael Mauboussin and Tano Santos sit down with Sheldon to dig into the nuts and bolts of investing. Sheldon shares his path from studying government in college to becoming a seasoned Chief Investment Officer. We dive deep into critical considerations like balancing liquidity and safeguarding investments, understanding the growing high-yield market, and why intangible assets like brands and patents are making financial waves. Sheldon, Michael, and Tano will explore Sheldon's unique educational background, the trade-offs in investment strategies, the rise of the high-yield market, the role intangibles play in today's financial world, and so much more!

Key Topics:

• An overview of Sheldon's professional background (3:13)
• 40-year partnership with Howard Marks: mutual dynamics and shared intellect (8:38)
• Early high-yield bond market inefficiencies and technological limitations (11:23)
• How equity holders' approach affects creditor relations and company ease-of-work (18:57)
• Company growth via flexibility over ratings and the role of private equity (20:38)
• Operating in 300-550 basis point spreads; equity investment opportunities (24:18)
• Importance of new issues for returns; market appetite and deal quality (26:25)
• Role of equity market signals in bond investments; sector focus (28:34)
• Credit scoring matrix: eight critical factors for buy/sell decisions (31:17)
• Asset recovery rates: tangible vs intangible; market sentiment effects (39:25)
• Impact of rising rates on leveraged loans; stability measures (46:55)
• Challenges with interpreting delinquency rates; sector diversification strategies (50:30)
• Characteristics of influential investment committees: camaraderie and vital CIO (52:04)
• Teaching at Columbia; credit analysis as a career path for students (54:12)
• What keeps Sheldon up at night and excited about the future (57:14)
• Sheldon's book and theatre recommendations (59:00)
• And much more!

Mentioned in this Episode:

• Charlie Ellis Book | Winning The Loser's Game
• Howard Marks' Books
• The Most Important Thing: Uncommon Sense for The Thoughtful Investor
• Mastering the Market Cycle: Getting the Odds on Your Side

Thanks for Listening!

Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu.

Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!