
Andrew Brenton (Turtle Creek) - A Different Kind Of Value Investing
09/02/22 • 40 min
Andrew Brenton co-founded Turtle Creek, a Toronto-based asset manager, in the late 1990s. Since its inception, Turtle Creek has delivered outstanding returns by investing in mid-sized companies in the US and Canada. We discuss Andrew's formative experiences and evolution from private to public market investor, as well as the team's focus on unique companies and exceptional operators. We also talk about the emphasis Turtle Creek place on continuous portfolio optimisation, and other aspects of their process that make them a different kind of value investor.
Show notes:
[1:24] Andrew discusses his career and taking inspiration from John Maynard Keynes
[4:35] The benefits of public market vs private market investing
[7:59] Appreciating complexity in an uncertain world
[11:54] Competitive advantages
[15:01] The benefits of fragmented industries
[17:01] Focusing on unique companies
[19:49] Trusting great operators
[20:46] Getting the future right in a balanced way rather than being overly conservative
[23:38] Behavioural biases and collectively making intelligent decisions
[27:03] Valuing acquisitive companies
[29:27] Focusing on episodic rather than programmatic acquirers
[31:08] Portfolio construction and optimisation
[34:21] Appreciating qualitative factors and a human touch
[38:19] Turnover
[38:52] Have confidence in your views and act more quickly
Andrew Brenton co-founded Turtle Creek, a Toronto-based asset manager, in the late 1990s. Since its inception, Turtle Creek has delivered outstanding returns by investing in mid-sized companies in the US and Canada. We discuss Andrew's formative experiences and evolution from private to public market investor, as well as the team's focus on unique companies and exceptional operators. We also talk about the emphasis Turtle Creek place on continuous portfolio optimisation, and other aspects of their process that make them a different kind of value investor.
Show notes:
[1:24] Andrew discusses his career and taking inspiration from John Maynard Keynes
[4:35] The benefits of public market vs private market investing
[7:59] Appreciating complexity in an uncertain world
[11:54] Competitive advantages
[15:01] The benefits of fragmented industries
[17:01] Focusing on unique companies
[19:49] Trusting great operators
[20:46] Getting the future right in a balanced way rather than being overly conservative
[23:38] Behavioural biases and collectively making intelligent decisions
[27:03] Valuing acquisitive companies
[29:27] Focusing on episodic rather than programmatic acquirers
[31:08] Portfolio construction and optimisation
[34:21] Appreciating qualitative factors and a human touch
[38:19] Turnover
[38:52] Have confidence in your views and act more quickly
Previous Episode

Richard de Lisle (De Lisle Partners) - The Greatest Game
Richard de Lisle, founder of De Lisle Partners, has significantly outperformed US equity markets over the last 27 years by investing in US small-cap value stocks. We discuss what value investing means to Richard, his focus on themes and the advantages of taking a sociological perspective. We also explore the current environment, Richard’s investments in primary producers and why investing is the greatest game.
Show notes:
[1:05] Richard talks about how his father’s misfortune inspired him to start investing
[3:09] Don’t follow others as experts can be self-serving
[4:00] Richard’s career on the sell-side
[7:01] Equities were an unloved asset class in the 1970’s and early eighties
[8:18] Getting hooked on the American market’s intricacies
[9:13] Transitioning from the sell-side to the buy-side
[12:12] Why Richard focuses on US small cap value
[13:26] Small cap value’s outperformance between 1975 and 1983
[14:38] Ducking and weaving in difficult environments
[16:25] Taking a top down approach
[17:48] There is value in the least worst
[18:40] Looking backwards not forwards
[20:18] Identifying investment themes
[23:05] People often underestimate that value stocks can become growth stocks
[24:02] Reading broadly and taking a sociological perspective
[24:39] The advantage of being detached
[25:39] Investing is the greatest game
[26:51] Investing in primary producers in an inflationary environment
[29:46] Complacency around wage inflation
[31:21] Short duration stocks
[33:05] Work out what you want and set a plan to achieve it
Next Episode

Gerard Minack (Minack Advisors) - The End of Secular Stagnation
Gerard Minack has a wealth of experience as a macro strategist and founded Minack Advisors in 2013. Gerard has been particularly prescient over the last 18 months, highlighting the probability of rising inflation and higher interest rates well before many others. We discuss how the pandemic changed Gerard's macro views, why he believes secular stagnation has come to an end and what implications that has for investors in the years ahead. Gerard also talks about why he believes a recession in the US next year is more likely than not.
Show notes:
[1:19] Gerard talks about joining the industry on Black Monday in 1987
[2:17] Founding Minack Advisors after a successful career in big investment banks
[6:49] The end of secular stagnation
[11:34] The implications of such a change
[14:06] Most investors still underestimate the possibility of secular change
[15:52] The risk of recession isn't adequately priced by markets
[17:25] Why Gerard believes this will be a two part bear market with a recession hitting earnings next year
[20:35] Equities usually trough a few months before the end of a recession
[25:00] Labour inflation and why the Federal Reserve's job is so hard
[27:08] The winners of the next decade
[33:11] Private assets and why it is becoming harder to generate alpha
[35:27] Why Gerard thinks US government bonds may now be a good place to hide
[37:28] The credit cycle
[40:20] Do a job that you enjoy
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