Invest Like The Best
Episode 230 Resilience and Imagination
Invest Like The Best

Episode 230: Resilience and Imagination

Invest Like The Best

Episode 230

Resilience and Imagination

John Harris is the Managing Partner of Ruane, Cunniff & Goldfarb, the flagship Sequoia Fund. We cover John’s approach to finding businesses that can be owned for the long-term, what goes into their diligence process, and the importance of resilience for investors.

This episode is brought to you by:
Tegus. Tegus has built the most extensive primary information platform available for investors. With Tegus you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 10,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. Visit tegus.co/patrick to learn more.

Paxos. Paxos offers your customers crypto buying, selling, transferring, and more with easy to integrate APIs. Whether you’re a small fintech or a large financial institution, Paxos takes care of everything in the backend – from licensing and compliance to custody and exchange. You can start offering crypto to your customers within months. To learn more, visit paxos.com/patrick.

[00:03:48] - [First question] - How markets undervalue long-duration growth of companies

[00:07:21] - Why should one even do DCFs at all

[00:10:01] - Defining homework when studying a business and what getting better as you do your homework tends to look like

[00:12:24] - How the market still underestimates how the quality of a company reduces risk

[00:15:09] - Reinvestment opportunity and risk and why they’re important for long term returns

[00:17:14] - Lessons learned owning Google stock options for over a decade

[00:22:02] - Skill versus luck when it comes to investing psychology

[00:24:32] - Perspectives on big market cap companies in a portfolio when success often comes from smaller-cap non-linear growth 

[00:26:47] - Features of the current market landscape that he finds interesting

[00:31:24] - What buying behavior looks like in the demand side of the business equation

[00:34:10] - Discovering a company that served the customer and was a delight to discover

[00:37:58] - Analyzing getting one's hands dirty to get a competitive advantage in serving the customer

[00:39:24] - The hardest episode of his investing career and what he learned from it

[00:43:03] - Reasons why a company succeeded after doing a deep dive but not buying in

[00:43:54] - One of the CEOs he finds most remarkable

[00:47:20] - Examples of businesses where scale isn’t the driver of competitive advantage

[00:49:50] - A company they owned that did well but didn’t have the strongest company culture

[00:50:56] - His view on the investment industry today writ large

[00:52:16] - Ways investors could expand their imagination when analyzing businesses

[00:53:07] - The kindest thing anyone has ever done for him

Resilience and Imagination

Introduction

Patrick
My guest today is John Harris, managing partner of Ruane, Cunniff & Goldfarb, where the flagship Sequoia fund has an incredible 50 year track record running a highly concentrated portfolio of equities. In our conversation. We covered John's approach to finding businesses that can be owned for the long term, what goes into their diligence process and the importance of resilience for investors. I think many of the stock pickers out there will enjoy many of the points on good management, good businesses, and using imagination. I hope you enjoy my conversation with John Harris.

Three Market Tendencies

Patrick
So John, I was toying with where to start our conversation, something your team sent over stood out in all the materials that I reviewed prepping for our chat today. And there are these three interesting things that you say markets tend to do. I'm going to list them and I'd love to spend some time on each of them because I think they're unique and interesting.

Access the full transcript
Sign in or register to view episode transcripts.

Contact

Get in touch at help@joincolossus.com