Transcript
Intro
Patrick
This week's conversation is an ode to old school, fundamental public market investing. My conversation is with IMC's Connor Leonard who spends most of his waking hours thinking and reading about markets. His mandate is to invest purely as if it was his own money, with no pressure to hug a benchmark and no pressure to do much of anything other than earn strong, long-term returns. The portfolio that results from this approach is highly concentrated and unique. Connor's strategy is to sort companies into four categories based on their type of sustainable competitive advantage. As you'll hear the vast majority fall into the first category, which means they have no such advantage and therefore should be largely set aside. We spend the majority of our conversation talking about the other three categories; one, companies with a legacy moat; two, companies with a reinvestment moat; and, three, an interesting category that Connor calls capital-light compounders, which we explore in detail.
When you step back and think about public markets, you realize how amazing it is that we can, from afar, buy an interest in so many companies around the world. A select few go on to deliver outstanding returns. This conversation highlights how hard that can be, but also how fun and ultimately rewarding. Please enjoy my talk with Connor Leonard.