Invest Like The Best
Episode 235 Investing Behind Change
Invest Like The Best

Episode 235: Investing Behind Change

Invest Like The Best

Episode 235

Investing Behind Change

Steve Mandel is the founder of Lone Pine Capital, one of the most successful hedge fund and investment firms of this generation. We cover how the investing business has evolved since Steve started in the 1980s, why it’s so difficult to drive alpha by shorting stocks today, and why Steve still loves to get into the guts of a business.

This episode is brought to you by:

Canalyst. Canalyst is the leading destination for public company data and analysis. If you've been scrambling to keep up with the deluge of IPOs and SPACs these days, Canalyst has models on Robinhood, Marqeta, Grab, and everything in between. Learn more and try Canalyst for yourself at canalyst.com/patrick.

Hall Capital Partners. Hall Capital is always looking for exceptional investment talent at any stage and size, so if you are raising capital or looking for a career change in the San Francisco or New York areas, you should check them out at hallcapital.com or e-mail invest@hallcapital.com.

[00:03:49] - [First question] - His first encounter with Walmart

[00:06:04] - What about Sam Walton made him worth idolizing

[00:08:27] - The juxtaposition of business to management quality

[00:11:10] - Why a career in retail influenced the lens he sees the investing world through

[00:11:36] - What bad company culture in retail looks like

[00:12:49] - Aspects of Walmart’s culture that could be applied to other companies

[00:14:07] - Defining the core essence of retail company culture

[00:15:15] - How long it used to take for a stock to properly reflect new information

[00:16:53] - The nature of edge and what it looked like back then

[00:21:22] - Investing behind change and assessing trends

[00:23:19] - Scars and stories from just how vicious short markets can be

[00:26:45] - Thoughts on building an enduring firm and how it’s evolved over time

[00:32:27] - The process and decision to remove himself from the day-to-day operations

[00:34:08] - Lessons learned over time about what separates good from bad analysts

[00:34:55] - Where to start looking when getting into the guts of a business

[00:36:44] - What is most exciting when you’re inside the guts

[00:39:32] - Interesting aspects about payments today writ large

[00:42:28] - Broad trends around change in consumer trends

[00:43:15] - How he views software businesses looking forward as an investor

[00:45:27] - Great managers and their emphasis on analyzing their competitive advantage

[00:48:15] - Ways that pace as a variable has changed in importance

[00:49:40] - What he thinks we’ll look back on as silly in how markets currently operate

[00:50:46] - Whether or not all markets becoming 24/7 will be a good thing

[00:52:12] - Big iconic business stories that newcomers should study

[00:56:19] - Whether or not business building is an art form

[00:57:51] - Key levers that typically always matter for a business

[01:00:06] - Other major aspects of the world that are important to consider

[01:01:26] - How his personal motivations morphed over the years and what has changed

[01:03:08] - Valuable lessons learned about the inputs and outputs of education

[01:04:28] - Advice for would-be future investment analysts

[01:05:59] - The kindest thing anyone has ever done for him

Investing Behind Change

Introduction

Patrick
My guest today is Steve Mandel, founder of Lone Pine Capital, one of the most successful hedge fund and investment firms of this generation. In our conversation, we discussed how the investing business has evolved since Steve's start in the 1980s, why it's so difficult to drive alpha by shorting stocks today relative to 20 years ago, and why Steve still loves getting into the guts of a business. Steve shares his lessons through a variety of great stories, which made this such a fun experience. Please enjoy my conversation with Steve Mandel.

Learning from Retail

Patrick
Steve, an appropriate place to start this, what will be a wide ranging conversation that I've really been looking forward to, is to set the early stage of your career. Because I think one of the most interesting topics we'll cover is what has changed the most and what has changed the least across your investing career. When we were talking on the phone in preparation for this, there are some great anecdotes from the mid to late '90s around shorting, and the way that information was disseminated through the system, and one about Walmart really stood out to me. I thought that would be an interesting place to start - your experience with Walmart, the company, the stock, everything it taught you about investing and about business and how different things used to be back then. Can you talk about your first encounter with Walmart and why that might be an appropriate interesting company to frame our conversation?

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

Contact

Get in touch at help@joincolossus.com