Scott Reardon

Scott Reardon

08-11-2022

20:55

Great investor series #9: Glenn Greenberg Returned 18% a year over 25 years. (After fees, I believe.) --A generalist. --Doesn't care about knowing every little thing about holdings. --Doesn't buy things where he could lose all his money even if the upside is huge. 1/

Uses FCF yield + growth rate to value thigns. If FCF yield + growth rate is over 20%, he's interested. Focused on good businesses that can survive severe downturns. Wants things that could be up 50% without any multiple expansion. That's a high bar. 2/ #greatinvestorseries

"Keep things simple. Complexity involves greater risk, whether you know it or not." --Doesn't build models. --Concentrated: no positions under 5%. --I believe 70% of the fund is in top 3 positions. --Bought RyanAir bc even if it stopped growing, he'd make 13.5% from FCF. 3/

--Wants growing earnings. --Bought Google w/o knowing much about it, just that internet was growing and Google had 50% mkt share. --Wants "two-inch putts", big return with little risk. Like many of the greats, marries payoffs with probability. Result: concentrated bets. 4/

Biggest winner: Freddie Mac. Bought during the Gulf War at a low P/E and held on. Another big winner: buying cable businesses in the 90s. They went from 5x ebitda to 15-20x. Also owned Amex, Precision Castparts and Varian. 5/

Says not good at coming up w/ a co's fair value. So he tries to buy good businesses at 10%+ FCF yields and allow that setup to do the work. Interesting how Type B many great investors are. Don't need to know every little thing. Not focused on what's defensible intellectually. 6


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