Chris Mayer, how to hunt 100 baggers?

Chris W. Mayer is a Value Investor and author. He has written the book “100 Baggers: Stocks That Return 100-to-1 and How To Find Them” which is an interesting read for every investor.

The interview was done in 2020. We made it public now to give you more materials about our high-quality interviews at hand.

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[00:00:00] Tilman Versch: Hello, everyone. It’s great to have you here for a conversation with Chris Mayer. Hello, Chris.

[00:00:06] Chris Mayer: Hello, Tilman.

[00:00:07] Tilman Versch: How are you today?

[00:00:09] Chris Mayer: I’m excellent.

Getting to know Chris Mayer

[00:00:11] Tilman Versch: To give a start, I want to ask you for an introduction because you’re the first time on our channel, it’s great to have you here. I just want to ask you what’s interesting that other investors should know about you and what makes a good investment for you as a beginning question.

[00:00:27] Chris Mayer: All right. Well, let’s see. About me, I started my career in corporate banking where I made loans to all kinds of businesses. That was an interesting place to start my career in finance because as a lender, you really think a lot about the downside and balance sheets and you learn how to value different assets. That was a very good training ground thinking about the downside first. I did that for about 10 years and I always liked to write. My passion was always for the stock market so I started a newsletter on my own in 2004 called Capital & Crisis. I did well enough so that within six months, I quit my banking job and did that full-time. I did that till about 2016.

In 2016, I started working with the Bonner Family Office. Bonner’s family owns Agora, a big publisher, and they were publishing my newsletter. I started helping them with the family office and then in the middle of 2018, I proposed to them the idea that maybe we could start a fund. A long story short there’s they seeded it with $25 million in the capital called the Woodlock House Family Capital. It’s named after a property they own in Portlaw, Ireland. We started the fund and opened its doors in 2019 and that’s what I’ve been doing full-time ever since.

One good thing I always like to point out, when I did the newsletter is I got to travel all around the world into 40 somewhat different countries and wrote four different books and met all kinds of interesting people so that was a really good time doing that. Then you asked what makes a good investment. Well, these days I’d say the ideal, drop the ideal would be a business that produces lots of free cash flow, has a long runway for growth, it generates a very high return on invested capital, has the ability to reinvest those profits, and cash flow and earn consistently high returns on that investment, they have a good balance sheet.

I have a very good insider like a CEO who owns a lot of stock and it’s preferably on the young side maybe 40s, 50s and then I would sit back and watch it compound for years and years. That would be ideal.

[00:03:24] Tilman Versch: Sounds good. Before we could go into details, I want to post a disclaimer but before that, I want to ask you, you have this great bookshelf behind you.

[00:03:34] Chris Mayer: Yes.

[00:03:34] Tilman Versch: [inaudible 00:03:35] you’re to grab a book that’s some good investing book for you, if you have good investing books there and a book that’s a good non-investing book you can recommend and after that, I will post a disclaimer so everybody can see the disclaimer and you can-

[00:03:49] Chris Mayer: All right. I’ll be right back.

Interesting books Chris highly recommends

[00:03:51] Tilman Versch: -get the book. Guys, as promised here’s the disclaimer. You can find also a link below the video and look at it. It just says, “Do your own research. We’re having here a good conversation, we have knowledge but it’s always that you have to do your own research and we make no advice just do your own research. Thanks.” Now, I’m curious about the books and to see what Chris found.

[00:04:25] Chris Mayer: Okay. Well, yes, behind me I have several shelves of investing books.

[00:04:32] Tilman Versch: Looks like an awesome bookshelf.

[00:04:34] Chris Mayer: Yes, some of them go back quite a way so that I think maybe the earliest I have some Peter Lynch books from ’89 I think was his first one and they’re hardcover so they go back quite a ways and some of them are even older than that. I picked two. The first investment book is one that people have heard me talk about. It might be hard to get now but it’s a great read. It’s by Martin Sosnoff Humble on Wall Street and came out in 1975. He’s a money manager. He’s been a money manager for about that point, I think since the ’60s. He managed, I forget but anyway, he’s a very good writer.

I enjoy this because he talks about a lot of experiences investing money. One of the things I take from Sosnoff is he was one of the ones who really drilled into me the idea of how important it is to have an ownership that has skin in the game and that cares about the business. This book is just really really fun to read and again it might be hard to get now but definitely, I like this book.

I’ll read this little beginning for you. It says, “As a state of mind, Wall Street is no different from Main Street. Lazy and avaricious, prejudiced and easy to panic, it can believe in anything and just as readily shared its belief, its deeds and misdeeds with clothes and generic rhetoric of petty politicians and its people are there only to make money.” Anyway, he says it right really well so I picked that one.

The other one I had to grab because it inspired me is which you may know is 100 to 1 Thomas Phelps’ book. Again, in this book, there are parts of it that don’t date that well but it’s the original study of 100 baggers and stocks that went from 100 to 1. It’s also very well written. He says a number of little quotable things in here I know I remember saying things like, “If not for thieves, there’d be no locks,” talking about how problems create opportunities. It’s a fun read. I definitely recommend that one.

Then for non-investing, I have a lot also on my shelf. I have a lot of philosophy books and some of my favorite thinkers, the pretty quirky ones like Buckminster Fuller and Alfred Korzybski. I’ll grab Korzybski although I don’t recommend anyone really start and read this Science and Sanity it’s a very thick book. It’s hard to read but I think if you could read a little bit on general semantics, I think it would help you’ve helped me think. I think the way I think about general semantics it’s just another way to aid critical thinking. I wrote a book that applies general semantics to investing it’s called How Do You Know. Anyway, those are some things I pulled.

[00:07:41] Tilman Versch: What did you learn from the transfer from semantics to investing?

[00:07:46] Chris Mayer: Well, I came to appreciate more how language influences how we think and the power of naming something. When you call something a name, how it can influence how people think about it. It comes up all the time people call a stock a growth stock or they call something a compounder or they say it’s a large-cap or a mid-cap and they treat these entities as if they were real and as if they had a certain meaning to them. When you really break it down a lot of these terms they’re really arbitrary and not as useful. So when you start seeing even something like people talk about the economy, then you break down what it really means. What are they talking about?

That’s one thing I think is important just to pay attention to language and particularly how we use these abstractions and we just pass over [unintelligible 00:08:44] as if they were real things and if you break them down and examine them, you find there’s not really much there.

How to stay focused 

[00:08:50] Tilman Versch: It’s interesting to take this idea with me. Thanks already to the viewers for the questions you’ve handed in. I already saw them and I’m happy to receive more questions from Chris because this day is all about the questions from the audience and I already received a lot of questions. What I want to ask and also in the metaphor of the bookshelf you have behind you, think about the current time we are in, we had a big bookshelf somehow on the internet and there’s a lot of information, a lot of offers and with your time you can only read one book at once. The question is how you stay focused in this time. It’s coming from a Mega cap. Best wishes to you.

[00:09:40] Chris Mayer: Yes. Well, I’m pretty disciplined about always carving out time to read books and self-carve some time to reflect on things that don’t directly have to do with the market, so just recently, I read a biography of Montaigne. The French essayist in the 1500s. There were some unexpected parallels with our own time that I didn’t expect to find. In the 1500s in France where he was, there was the plague so he talks about how difficult it is to travel during the plague and all the different things people did. It was interesting reading that again because I didn’t anticipate that but it had obviously made an impact that we’re going through something.

Well, not like the plague, but we have our own pandemic and it makes you think that humanity has been through worse things. As bad as the pandemic is, it’s certainly not the plague and we’re in much better shape than he was. I always carve off some time and usually that time is at night to try to read things that just I’m interested in, carve out time for biographies or books on philosophy or other topics like that. The other important part about staying focused is you have to really be good at managing your time, even on social media. I’m on Twitter, but Twitter can be a huge time sink if you let it.

You could spend an hour on Twitter and then you get to the end of the hour and you’re not really sure what you were doing that whole time. What do you really take away. It’s like junk food, just kind of- I try to manage those times as well. Certain times I like to do it and then otherwise I stay away from it and also manage your newsfeed. There are some things I like to read at the beginning of the day. I always read the Journal or the Financial Times, but there’s just so much that you could read and it becomes really important to carve off time so you’re not just being a news junkie all the time.

It’s important to leave time, not only to read those books, as I mentioned at night but also to just spend time with primary documents, just spending time reading annual reports or going through investor presentations and transcripts. Those are things that you usually get a good bang for your time there. It really requires you to manage your time well, and not allow distractions to take over.

The other important part about staying focused is that you have to really manage your time, even on social media.

Hunting 100-baggers 

[00:12:19] Tilman Versch: How do you select what you read in this nightly reading?

[00:12:24] Chris Mayer: Well, the nightly reading is always just sort of whatever grabs my interest. I’m interested in a lot of different things and as I told you, I read Montaigne’s biography. I think I have been on a little bit of a biography kick. I read a recent biography on Soren Kierkegaard recently. Again, it doesn’t really have anything to do with markets. It’s just interesting people and what they’ve done. I like reading about philosophers or writers and different time periods in their life experiences. Really, it’s just allowing me to just follow my interests not necessarily, I’m not looking for a payoff or some key market insight all the time. Just allow some time to reflect on other things.

[00:13:14] Tilman Versch: It’s interesting. There’s one quote where you make the metaphor for 100 baggers. What are your ways if you’re hunting, how you’re coming closer to the deer or to the target to use this metaphor?

[00:13:36] Chris Mayer: Well, there are certain ingredients that are important and sometimes I think if I had to do the book again, I would emphasize more than that. Perhaps I did, that the key ingredients are really, you have to have that high return on capital. You have to have a business that generates high returns. It’s very difficult to do it. Otherwise. There are always exceptions. There are lots of companies where it would have been very hard to discover that they would have been 100 baggers because they either didn’t make money for a long period of time or whatever.

But the ones where you have a better chance of perhaps identifying earlier are those ones where the economics of the business themselves are great. If you looked at the early days of McDonald’s or Starbucks, you could see that the underlying store economics were always very good. Their returns on capital are high, and then they have the ability to take that profits and reinvest them again. That’s where you really get that compounding. In the real world, it’s hard to find companies that can do that. Most of the time they’re paying a dividend or there’s some leak. They’re not investing 100%. They’re reinvesting maybe half or even 30% or even less.

That slows down your compounding a little bit, but ideally, you would want a company that can reinvest the whole thing. Some of this you can get at with screens. You can screen for companies that have generated high returns on capital, and high returns on assets over 10 year period of time. You can start to dig your way through those names. A lot of them are going to be names that you know are great businesses.

The other thing is if you really looking for 100 baggers is to stay on the smaller side. Apple is still a great business today, but not going to be 100-bagger. I think we can safely say. Some of it is that you can [unintelligible 00:15:35] with screen otherwise, this reminds me of the question I get a lot is like, “Well, where do you get ideas?” This could’ve changed over time because I’ve been doing this a long time. I now have a watch list of a lot of names that I keep track of and you just do a lot of different reading. You can get tips from other investors, somebody finds something they’re excited about. Maybe you take a look at it.

There’s really no magic trick to it. I wish there were, I wish I could say you plug in these four or five numbers and you do a screen and you’re going to get a list of 30 names and have at it, but it’s just not that simple.

[00:16:19] Tilman Versch: I think you could make a great product though. Was that like the magic formula or something like that [laughs]?

[00:16:25] Chris Mayer: Right. The magic formula is not a terrible screen. That’s a start. You just need some way to filter out. You need some way to filter stocks. Another filter that I like is just insider ownership. If I look for insider ownership, at least 15% or something, it chops out a whole bunch of names. Now, am I missing some really good companies by doing that? Of course, but you have to find ways to filter somehow. I like investing with companies that have high insider ownership, and I think it brings the alignment with shareholders closer together.

There are many examples of 100 baggers where you had a strong insider presence. Not all of course with lots of exceptions, but it’s also kind of a matter of taste.

I like investing with companies that have high insider ownership. I think it brings the alignment with shareholders closer together.

[00:17:15] Tilman Versch: Also screening is like a good idea of screening is to look what other good people do. What we asked you to look at is what this fund has in its portfolio.

[00:17:25] Chris Mayer: Well, that’s right. You make a good point because nowadays is probably the easiest time in the history of investing to find ideas. There’s just so much. Just in the number of hedge funds and mutual funds that publish quarterly letters. There are tons of ideas there for you to look at if you wanted to just read there and you’re looking for certain things, you just look and you get a lot of ideas that way with all the computer screening processes that we have. There are just tons of ways to get ideas.

Names to reconsider

[00:18:00] Tilman Versch: I have to question what makes you kill these ideas, but I also have another question. Maybe we answer both, but let’s start with a question from the chat because people have also your blog. They see your blog and it’s a good way to screen for ideas as well because you’ve written a lot of interesting content. You can find the link to the blog under this video so you can easily find it. Thanks to that you also made an RSS. I ask you for that and it’s great so it can be easier.

The question is if you look back on the good work you’re doing there, are there currently maybe two or three names that we should look at again now? Or you’re looking again now or you think if I ask this question, “Oh, I can look at that again now.”

[00:18:52] Chris Mayer: Ideas I look at now. Well, we’ve had such a bounce. Well, I’m tempted to think about things that are really unpopular, but that I think are good assets. I don’t know when’s the last time I wrote about InterContinental Hotel, for example, but that’s one that’s interesting and not just InterContinental, but also Marriott and Hilton, those big three. There are similar, there are some differences between them, what you favor, but what’s remarkable about them is their asset-light mostly franchise businesses. Even in during this time, which is the worst time you could possibly imagine for hotels, they really had the worst year.

Going back, I don’t know how long you got to go back to find numbers as bad as they’re putting up this summer, but they’re still going to produce free cash. Free cash flow this year. It’s real proof of their model. I think the stocks are all pretty cheap when you consider what they could earn, back in a more normal environment, say another take two years. Say it takes two years. That’s one that’s interesting, because if you look back, and they’ve consistently generated very high returns on their capital.

In fact, InterContinental if you look back over the last 10 years, the amount of capital invested in the business has shrunk. They’ve generated a lot more free cash flow so that’s the ideal business where you’re getting a lot more free cash today than you were 10 years ago, and actually doing it with a lot less capital. That’s one interesting idea. There are other things I’ve written about that I’m not as enthusiastic about anymore because it’s the world that has changed with the COVID and the pandemic.

I’ve written about aircraft leasing, for example, I’m no longer in that name. That was one of my best performers last year, but they just have a very, very difficult road and if I was going to get involved in aviation, I would probably choose a different way to play, maybe, something like HEICO would be a good way to play. It’s much better business. Anyways, a couple of thoughts to mind.

Chris Mayer’s ways to kill ideas 

[00:21:23] Tilman Versch: Thank you for the good answer to the question from the chat and to our audience, you’re welcome to ask more questions in the chat window. I already saw two other questions I want to drop them in during our conversation. I also have a question that’s coming, already asked, and that’s coming from one of the people who wrote before our chat is how you kill ideas. There are a lot of ideas out there and what’s your way to decide, that’s interesting, I waste more time or just kill the idea.

[00:21:56] Chris Mayer: Lots of ways to kill ideas. One for me is if it’s got a lot of debt, that’s an easy kill. I don’t like the ideas that are really deeply cyclical. I’m not going to be interested in say mining companies, or I’m not going to spend a lot of time looking at tanker stocks, or these heavy industrial, very cyclical names where you look at their performance over the last 10 years, and they’re all over the place. That’s an easy kill. There are certain industries that probably are easy. I’m not going to invest in say little biotech names with one or two drugs, I don’t have a skill set in that area so that’s easy to kill.

There are a lot of businesses that are not really that good they’re just mediocre. When you see businesses their return on assets is low single digits, the only way they get into a double-digit return on equity is they’re using a lot of debt. Businesses that don’t really have much of competitive advantage for there are lots of competitors and it’s nothing particularly special about it. Those businesses are easy to kill. There aren’t that many really good businesses around. Those ones are easy to kill, if there’s any whiff of that there might be some fraud or any whiff that there are accounting issues, I stay away from those, overly complicated things.

Additionally, I’ve been reluctant to get involved with roll-ups, where these companies do a lot of acquisitions but I’ve changed that recently. As I wrote down the blog, there are some companies that have been very skilled at acquiring lots of companies, Constellation Software is one that I’ve written about I do not own. HEICO, of course, is another skill acquired. Brown & Brown is an insurance broker that I own, has proven to be a very good acquisition over a long period of time. Those are some ways to kill ideas.

[00:24:17] Tilman Versch: How important is management to you to kill ideas?

[00:24:21]Chris Mayer: Critically important. It’s become more important over time. I remember when I was a younger investor, I wouldn’t worry so much about management. I would feel good management teams leave their imprint in the numbers and if I was also trying to evaluate and put a premium on a good business that I was double-counting, in a way. I’ve come to think investing more and more is just a people business and that management is critically important so for a couple of reasons. One is the capital allocation over time.

I’ve come to think investing more and more is just a people business and that management is critically important for a couple of reasons.  

One of my favorite Buffett quotes is the one where he talks about a CEO who is on a job for 10 years and he’s allocating 10% of the profits so whatever, it comes to an enormous number that that CEO is responsible for allocating that capital. That’s very important and has a big impact on returns. The honesty of management, if there’s any question about management, if there’s anything in their history that gives you pause, it’s just a lot of other companies, I would not mess with it because the market’s always going to test you.

There’s always going to be a time when the stock’s going to be down, and there’s going to be some questions about it and if you don’t have that confidence, you’ll likely get scared out of those opportunities but if you have the confidence, those are times you can add to it. That’s really where you generate some alpha. Management’s definitely very, very important. I spent a lot of time trying to evaluate the track record there, and the integrity of the people involved.

Management’s definitely very, very important. I spent a lot of time trying to evaluate the track record there and the integrity of the people involved.

Family generations in management

[00:26:05] Tilman Versch: One of your fans from Twitter, Fox Castle Holdings, fans of friends, he has asked a question on a certain form of management, the family. The question is about how you deal to evaluate the change of family generations in management?

[00:26:27] Chris Mayer: A lot of times in broader history, those transitions don’t really go so well but there are always exceptions. I think about John Elkann of Exor, who so far, I think, has shown he’s a pretty good capital allocator, a pretty good manager, and he was groomed for that role very young. I think that’s one way to look at it is to say, “Has this person been involved in the business when they were very young? What kind of training did they receive?” Another one would be, the sons of Vincent Bolloré, are also have people who have been in the business a long time, and have been trained to run it from the very beginning.

It’s hard to know that those transitions will go well, and there’s always some risk. I think what you’d want to look for is someone who has been in the business a while and talking to people, if you can meet them all the better but talking to other people, what they think of them, what their interactions have been like. You get positive feedback on those things they give you some comfort, those people know what they’re doing they’re not just someone who fell into that position because of their last name.

Families are generally a positive for me when there’s large family ownership in the business because there’s empirical research on this, too, that families, in general, are good stewards of capital because they tend to be less levered, and less aggressive. They are more willing to invest long-term and not play the quarterly earnings game. Of course, there are always exceptions but I’m thinking of several of my holdings where there’s a family involved, and they’ve been good stewards over a long period of time.

Families are generally a positive for me when there’s large family ownership in the business. There’s empirical research on this too that families, in general, are good stewards of capital because they tend to be less levered and less aggressive. They are more willing to invest long-term and not play the quarterly earnings game.

Dealing with conflict of interest between the family and minority shareholders

[00:28:35] Tilman Versch: How do you take into account possible conflict of interest between the family and minority shareholders?

[00:28:43] Chris Mayer: Again, that’s going to be something you going to just look at the track record, have they treated minority investors, have they treated them fairly in the past? If they haven’t, then stay away. There’s really not necessarily any other easy way to do it. Actions speak louder than words so how did they treat minority shareholders in the past? That’s what you have to think about.

A stock sector that will benefit from a Biden victory

[00:29:15] Tilman Versch: Hello again, to our audience. For all the new viewers, you’re welcome to hand in questions. For all the other viewers and also the new viewers I’m welcoming your likes for this interview so that many people can see it. Thank you. There’s one question that I found quite interesting and I haven’t thought that this kind of question might be handed in. What sectors or specific stocks will benefit most from a Biden victory in your eyes?

[00:29:50] Chris Mayer: That’s an interesting question. I’ve thought about it a little myself, but I don’t think if you’re really going to be a long-term investor that you should necessarily worry too much about the outcome, who’s going to be president because even if Biden is president and you have an investment, hopefully, if you’re right, it’ll be one that you own past his presidency. I wouldn’t let those influence you too much.

Now, there’ll be a lot written about that as we get closer to the election, people will come up with their Biden portfolio and their Trump portfolio, but I don’t really think of it that way unless there was something that would be like an obvious target. I’m trying to think of an example where you might be particularly scared. If a politician had it out for a particular industry and you might be a little more cautious. I don’t know for sure, but depending on how the US election goes, you’re still probably going to have a divided government and it’s not so easy for one person to just do what they want.

I don’t think if you’re really going to be a long-term investor that you should necessarily worry too much about the outcome of who’s going to be president.

I’m not that concerned about whether Biden or Trump wins. I don’t think if you told me who the next president was going to be, and I know for sure, I don’t think I would change anything in my portfolio as a result. I’m sure, I wouldn’t.

The US vs. emerging markets

[00:31:20] Tilman Versch: There’s also one question coming from the chat from a friend of yours from Argentina, it’s Diego Martinez [unintelligible 00:31:28]. I hope I spell it right. He’s asking about where do you currently see more value? Like in the US or in emerging markets?

[00:31:40] Chris Mayer: Well, especially when I was writing newsletters, I used to do a lot more in emerging markets. I don’t really do that as much anymore. I don’t have a strong opinion on emerging markets. There’s always value in every market, but the question is sometimes there are cheap stocks that are cheap for a reason. Of course, there’s lots of cheap say in the US if you’re looking at cheap stocks, you might look at there’s a number of energy companies or something, but maybe there’s not exactly the kind of businesses you want to own. I think there’s some pretty good value in certain patches in Europe.

Again, this is not necessarily a question I would think about that way because where a company is listed, of course, doesn’t necessarily mean that’s where they do business. I mentioned InterContinental Hotels listed in London. It’s also listed in the US but they have a big business all over the world, US, Europe, and Asia. I can think of another example like air lease is listed in the US but 95% of our business was outside the US so is really an American company. More than 20% of their business was in Asia. I don’t really look at it that way anymore.

I don’t think in terms this market is cheap. I try to focus more on the individual companies and you have to of course consider where they’re operating. A company that is trading at 10 times earnings in a tough market, might not be so much cheaper than a company trading 20% in an easier market. I just don’t think about it in terms of geographies that much. I don’t have as helpful an opinion there as I might’ve one time.

Dividends and 100-baggers

[00:33:44] Tilman Versch: A question from the chat or annotation by Yens was about dividends and their role for 100 baggers. Maybe you can say something about these two points, dividends, and 100 baggers.

[00:33:59] Chris Mayer: This is sometimes a hard point for people to swallow because I’ll say with 100 baggers that dividends are not important. Then ideally again, you would have a company that doesn’t pay a dividend at all, and people sometimes will shape it that because of course, there’s lots of research that shows that dividends make up a substantial part of equity returns, and people like getting that dividend check. It’s all saying as if you’re looking for 100 baggers, you really need to have the full effect of maximum compounding.

I’ll say if you’re looking for 100-baggers, you really need to have the full effect of maximum compounding. The way to get there is to have a company that can take all of its profits and reinvest it in the business, earn that high return, and does it again and again.

The way to get there is to have a company that can take all of its profits and reinvest it in the business and earn that high return and does it again and again if it has to take its profits and has to pay out a piece to shareholders, well, just intuitively you have that much less to reinvest and it slows down your compounding. Again, this is ideal and in the real world, it’s hard to find companies that can reinvest all their cash flows, and most companies will pay some dividend or theirs where they do some buybacks or there are other ways that there are other uses for the cash.

Dividend, I would say shouldn’t be a consideration. Thomas Phelps said that as well in his book. I believe he called it an expensive luxury. He said it dividend was an expensive luxury because if you saw dividends, you were kind of intentionally slowing down your own compounding of capital over time. I would say don’t worry about the dividend instead, focus on the cash flows and then how they reinvest and allocate those cashflows. Sometimes, business really is super capital light requires very little capital, and then they pay out dividends. That’s fine.

Dividend, I would say, shouldn’t be a consideration.

I mentioned InterContinental Hotel before, and that’s what the business says, if you look at a 10-year history, it’s paid out quite a bit of its cash flow in dividends and special dividends because again, they don’t need the capital. It gets a business that can grow with minimal capital. It’s kind of the Holy grail. If you can find a business like that.

Chris Mayer on networking and ways to find ideas

[00:36:15] Tilman Versch: In one of your former interviews, you mentioned the importance of networking events, and getting connected to other people to find good ways to find uncommon ideas that might turn out as 100 baggers. Now, we are living in a different world somehow.

[00:36:32] Chris Mayer: Yes.

[00:36:32] Tilman Versch: What are your ways to track different ways to find ideas in the last month or weeks?

[00:36:44] Chris Mayer: I am a person who loved to go to conferences, Berkshire Hathaway was a big networking event, but Berkshire Hathaway’s annual meeting Omaha’s was a big networking event I go to every year, of course, couldn’t do that this year. I often make the trick that attracts Toronto as well to go to Fairfax’s annual meeting for similar reasons, not only because of the Fairfax being, there’s a lot of other things going on around that time. They’re people come in town for that, that you maybe they only see there the same as true in Omaha.

There are other financial conferences that come on here and there that I would like to go to, but all that stopped. It depends, I find value in those kinds of networks because I enjoy meeting and speaking with other investors about ideas and what we’re seeing and what we’re talking about, and what we’re doing. There’s also, one of my favorites is MOI Global and a lot of that’s online. We’re still able to do that. All the people that I’ve met over the years at these different events, we still talk and swap emails and call occasionally. It’s easier to stay connected with other investors than ever before I think.

[00:38:05] Tilman Versch: You do a lot of phone calls?

[00:38:08] Chris Mayer: Yes. I mean, definitely on the phone. One of the ironic things too is I’m not doing as much travel while I’m not doing any travel this last few months, but I have probably talked to more management teams than I ever did before. Part of it is because they’re also not really, they have less, less to do and less travel and more time to talk to people. It’s maybe one of the silver linings of this whole process.

[00:38:38] Tilman Versch: It’s easier to get an appointment and…

[00:38:40] Chris Mayer: Definitely it’s. I find it’s been much easier to talk to people now than before.

Strategies for portfolio composition

[00:38:47] Tilman Versch: Have you used these days also to think about portfolio composition, how you size positions, how you allocate? Which is your way to do this and how has it changed maybe in the last weeks?

[00:39:00] Chris Mayer: Well, I would say the pandemic definitely made me rethink positions because I had walked into this with a lot of exposure to travel and aviation and some other positions that were directly affected by the pandemic either because they were had to shut down or whatever. There was a lot more turnover in my portfolio than I would’ve liked. Um, but I have to, this is a new risk now to underwrite. I tell people this, now we have something new to think about. Before, when I would underwrite a company, I’d always look back to 2008, and see, “Well, how did this business do in 2008? How did it hold up?”

Now it’s also going to be, well, what happened during the pandemic and as building that portfolio, you’re going to have to build a portfolio that can weather a pandemic. Again, you can take some risks during a pandemic. Of course, I’m like…

If you’re going to own a hotel or a restaurant, but you’re just going to pay attention to how those positions connect and pandemic I like to say it like it connected the dots to a number of my positions, connected a number of my positions together in a way I wouldn’t have thought before. That forced a change. As a result of this too though, I’ve become a little more concentrated. I think early part of the year I had like 15 positions and now I’m down to 10. A lot of that has been selling one thing and rolling the proceeds into other things I like better. The way I think about portfolio construction now is ideally I would have maybe 10 to 12 names somewhere between 8% and 10% each on cost.

It’s pretty balanced. I don’t think… I’m not a big fan of trying to overweight positions or people say, well, this position is riskier, so I’m going to make it a smaller position. For me, I just want to have it all balanced because at least for me what I found is that there isn’t that much difference in return. In other words, if I were to give you my top 10 names, it’s not necessarily that number one is going to beat number two is going to be at number three. Sometimes, the number six is the best one. You are just not sure where the performance is going to come from. Though I’ve found it’s better to just kind of keep it more balanced. The other thing that I try to do is have a limit on how much I’ll put in any one name on a cost basis.

For me, it’s no more than 10% of the portfolio in any one position on a cost basis. That’s there just to protect me against me. Every investor gets enthusiastic about a name and then it doesn’t work out. You don’t want to have that happen when you love a name and you’ve got 25, 30% in it and it doesn’t work. Now you’re really in trouble. I’m okay if it appreciates much larger. I think in my fund the limit is 20% on any position. It’s actually tough to get there if you work out the math, even if you put 10% in one name. It has to double and everything else has to go nowhere, which really is not usually how it happens. That’s how I think about portfolio construction. That and, again, keeping in mind, trying to keep a balance of risks. If I have one hotel stock, I’m just going to have one not going to another. If I have one oil name, I’m just going to have one oil name. I don’t want to have too many connected positions.

Chris Mayer on rebalancing winners

[00:42:43] Tilman Versch: There’s one question related to the 100-bagger mentality about cutting your winners. When do you do it? Or do you even do it?

[00:42:54] Chris Mayer: Like rebalancing winners? Yes, that’s a good question, This is where an individual investor might have an advantage because they can allow a position to really become big. There’s a professional investor running a fund, you can’t. I guess some people do, but it’d be very risky to allow one position to become half your portfolio, let’s say. Really, this is a matter of personal preference. If you really find one that’s a winner and you have to cut back on it, that’s a good problem to have, but ideally, I think you just let it ride as long as everything is in place. Now, I remember reading, like for example, I’ve talked to Chuck [unintelligible 00:43:41]. He’s had two 100-baggers, Berkshire Hathaway and American Tower, and I’ve talked to other money managers who’ve had big, big winners like that. I know there was one money manager I know who’s retired now, but he had Walmart and he says, it was just every quarter he was selling it it’s because it hit his lim…

If you really find one that’s a winner and you have to cut back on it, that’s a good problem to have. But ideally, I think you just let it ride as long as everything is in place.  

[00:44:01] Tilman Versch: Are you still there?

[00:44:02] Chris Mayer: Every quarter it was a performer. He was just constantly selling. I would say that’s a personal preference. Let it ride as long as possible. Just don’t touch it and let it go.

Positive and negative surprises for Chris

[00:44:17] Tilman Versch: There’s a question from the chat from Frank One. What are you excited about currently and what companies or sectors have maybe made a positive surprise for you?

[00:44:34] Chris Mayer: Well, there hasn’t been a lot that’s been like too much of a positive surprise this year. It’s been pretty tough. What I’m excited about is there are several companies that– There are a couple I don’t want to mention yet because they’re maybe a little small, but let’s say in general the kinds of companies I’m talking about. I’ve found a handful of names where I have really good owners. I’ve got long runways where they’re going to compound at least double digits. I’m really excited just to follow their stories. I don’t think there’s any particular sector that I would point to as being particularly interesting. Anyway, I don’t want to give any of those couple specific names just now, but I don’t think of it necessarily on a sector basis. I think there are just some really good businesses I’m excited to own and we’ll see how their story plays out. Maybe I’ll write about them on the blog here soon.

[00:45:48] Tilman Versch: Then maybe let me try to reframe those questions. What were positive surprises for you this year as an investor?

[00:45:56] Chris Mayer: Well, I think some of the positive surprises would be the resilience of some of these businesses in this environment has been encouraging. When I look at… I have a pizza delivery business has done… the stock has held up pretty well this year. It’s very adaptable to the pandemic. My insurance brokerage firm Brown & Brown has held up pretty well year to date. There are a couple of companies I have that are involved in necessary industries that were allowed to operate. They’ve been positive surprises. They’ve held up much better than the market. I think that’s one interesting takeaway from this whole pandemic process is to see which businesses were able to survive this and continue to operate and prosper during this. That’s kind of like the ultimate test of durability and resiliency. I really have a high degree of confidence in those businesses going forward.

[00:47:02] Tilman Versch: Maybe just see the other side of the coin, what were the negative surprises? Maybe also nobody’s talking about it, but you’ve experience in the field of investing?

[00:47:12] Chris Mayer: Well, negative surprises I think would be the length of these shutdowns. I think if you had told me in March that there would still be a lot of businesses closed here at the end of June, I wouldn’t have believed you. That’s definitely been a big negative. Even in the US, some of the states that have opened up are now rolling back or closing businesses again. That’s definitely a negative. I’d say a bit of a surprise. Another surprise has been the resistance of people to do the social distancing and wearing masks. It’s kind of a surprise maybe, and maybe I shouldn’t have been surprised. It’s made it more difficult to beat the virus here in the US. We’re at a new all-time high in cases. It’s going to be difficult to roll that back if people don’t play ball. It’s been some negative surprises.

[00:48:26] Tilman Versch: Interesting to hear those points is also a kind of intense debate about masks in Germany, but I think most people are following the rules, and it’s not this kind of intense politicized debate as you have in The States. I hope there’s a turning point to that because it really helps to wear masks on that basis especially if you have a high virus load.

[00:48:49] Chris Mayer: All right. Yes

[00:48:51] Tilman Versch: Maybe let’s get to one question from the chat it’s from William Walsh and he liked your piece on visible mode. Last weekend was great.

[00:49:02] Chris Mayer: Thank you.

Evaluating roll-ups acquisitions

[00:49:02] Tilman Versch: You mentioned ODFL, they compete with a roll-up, which you mentioned. You recently changed your opinion on XPO. Are the strong network effects needed for roll-ups to work? He’s also asking how do you evaluate roll-ups and judge acquisitions?

[00:49:20] Chris Mayer: Well, it’s a very simple way, not a very simple way, but there’s one way where I look at roll-ups and that is hopefully you have a long history. I’ve done this before, where you take a company, you look at the last 10 years and you see how much they’ve put towards acquisitions, and then you see what the return has been on those acquisitions. A simple way to do it to start is, you could say over a 10-year period company spent however much on CapEx and how much on acquisitions, and then you can also see free cash flow per share return, free cashflow went up however much percent. You can see the changes. You try to get a sense of what their return has been on those acquisitions. The other way is if a company is earning a pretty stable return on invested capital over that time, or look at some return metrics ROA, ROE, ROI, CEOs kinds of things.

If they’re pretty stable, that means they’re doing a pretty good job. That means they’re acquiring these companies and they’re folding them in and they’re keeping their same high level of financial performance.

That’s one. The other way is to track impairments. I mentioned Brown & Brown. I believe Brown & Brown has never had impairment on an acquisition. That also tells you that they’re probably doing a good job.

A company that has to take, that’s constantly writing down those acquisitions and three or four years later, they’re writing them down. This company is probably not doing a good job on acquisitions.

Likewise, if you have a company that’s doing a lot of acquisitions and over time you see slow degradation in returns on capital, that would also be a sign that they’re not doing such a good job.

Maybe they’re showing great growth in earnings. Maybe they’re showing great growth in sales, but if their return numbers start to degrade, that’s a warning sign that they’re not creating value.

Long-term vision as an investor

[00:51:18] Tilman Versch: Thanks for this answer. I also want to welcome all our new viewers. If you like what we are talking about here, please leave a like so that the video can be seen by many people. I want to say hello to Dennis Hong who is also soon on the live stream.

He has two questions. What is your long-term vision for Woodlock House Family Capital? What do you feel is your edge as a professional investor?

[00:51:48] Chris Mayer: What’s my long-term vision? Well, my long-term vision would be that… Really, I don’t need any additional capital. Capital I have, I just compound that at a good rate over a very long period of time. Owning a concentrated portfolio that does not turn over much. That would be ideal. That would be what I would hope to achieve. What was the second question?

[00:52:17] Tilman Versch: What is your edge as a professional investor?

[00:52:20] Chris Mayer: My edge. The edge is always an interesting question. I think a lot of people talk about the edge and they don’t really have an edge. It’s difficult to really have an edge analytically I think because we’re all doing the same stuff. We’re looking at the same numbers. I guess, perhaps, there are firms out there that have an analytical edge where they’re going well, well beyond normal due diligence. I think that’s a hard way to build an edge.

I think a lot of people talk about the edge, and they don’t really have an edge. It’s difficult to really have an edge analytically because we’re all doing the same stuff.

I think the best edges are more built around soft skills, more around behavioral things. Being patient. There might be the real last edge because there’s so much trading and algorithms and all these things. You’re not going to compete with those on a short-term basis. This is true for individual investors too. Your best edge may be your ability to look out more than the next couple of years and plant your flag that way. I think, one edge of mine is around the behavioral things. I think I’m very good at holding positions, and being patient. I think there are some basic things that I really focus on that I think maybe other investors don’t pay as much attention to.

I think the best edges are more built around soft skills, more around behavioral things. Being patient.

Your best edge may be your ability to look out more than the next couple of years and plant your flag that way.

For me, it’s all about the incentives, getting the incentives right. I spend a lot of time looking at management teams of my companies and how they’re incentivized, whether they own a lot of stock, or what their incentive comp is. It always makes me think of Charlie Munger’s favorite famous quote where he talks about, “Show me the incentives, I’ll show you the outcome.” That’s an important piece for me as well. The other thing I like to say is that I did… I wrote newsletters for 15 years.

I spend a lot of time looking at management teams of my companies and how they’re incentivized, whether they own a lot of stock or what their incentive comp is. It always makes me think of Charlie Munger’s famous quote where he talks about, “Show me the incentives, I’ll show you the outcome.

I have a very good network of people both in the investment world itself and also in the industry. If there’s an industry or business I want to learn about, odds are I can find somebody who knows something about it. I think that’s a nice advantage to have.

The most emphasized aspect of investing

[00:54:40] Tilman Versch: I have also a question from Steven Hossan in before. What do you feel is not emphasized enough in investing?

[00:54:51] Chris Mayer: Well, I think I’m going to flip that around a little. I think there’s one thing that’s emphasized too much. That is I think there’s far too much emphasis on the market as a whole, what the market might do, and what the economy might do. Most investors, and even professional investors I think will spend too much time thinking about those kinds of things, sort of unknowables. I think you’re better off focusing on the smaller things that you can know like really understanding the economics of a business, what makes it tick, how it really create value, and why it exists at all. That’s not emphasized enough.

There’s another thing sometimes I like to say which is that… which people forget is that the stock market is a market of secondhand goods. The only reason you’re able to buy a share in a company is that somebody else didn’t want it. When you think of it that way, not only did somebody else not want it but the original owner didn’t want it anymore, the guy who started it. Why is that?

I like to say which people forget is that the stock market is a market of secondhand goods. The only reason you’re able to buy a share in a company is because somebody else didn’t want it.

I think if you come at it with the mentality that there’s always someone on the other side, trade gives you some pause. Think about it before you buy. Make sure you have a good thesis and you know why you’re buying, you know why someone might be selling it to you, and what the counter-thesis is to your thesis and you understand it. I think those things are very helpful. They’re not really talked about very much.

Building positions

[00:56:28] Tilman Versch: That’s also a good pitch to build up for the next question. It’s how you’re building positions. Do you like tranches? Do you buy over time or how do you build positions? When do you make exceptions to your… when you’re doing it if you make any exceptions?

[00:56:46] Chris Mayer: Yes, definitely. Normally, I would like to buy it in a little bit like tranches. For me, if a full position is something around eight or nine or 10. Say between eight and nine. Then I might start something around three or four and then quickly get it to three or four.

Then maybe wait. Then work to build that position up over the next coming months. Usually, I have a full position on certainly before years up and to make exceptions for that definitely.

The one where I would make an exception was when we had something we did in March. When you have a market just fall out of bed and you have a big stiff drop like that, you might go ahead and just say, “Well, this instant I’m going to go ahead and buy it all pretty quickly.” That’s the exception. I can think there have been times when that’s happened. We’ve had big corrections in the market and where you’re going to say, “Well, I’m just going to buy this. You’re not going to trash it.”

In general, I prefer to do it in tranches because, also, no matter how much research you do, how much work you do on a name, there are some more things you learn about it owning it [chuckles]. There’s something as psychological about it. I don’t know. It’s like your level of tension kicks up another notch when you own it. That’s why. I know some money managers who just like to even take very small positions maybe 1% or 2% just because they know that now they own it, it raises their awareness to another level.

They work harder on it than if they didn’t own it. Everyone is different. You have to think about what works for you. For me, I don’t really like to keep little positions around when something… When I have a position that’s like 3%, I have to hold myself back because I want to make it meaningful. I want to make it big.

[00:58:41] Tilman Versch: Big position.

[00:58:42] Chris Mayer: I want to make it big or I just want to either or that or get it off or get it out. That’s just the way or how I think about it.

[00:58:50] Tilman Versch: What are examples of what has changed when you had a position in a company? What new came out of this magic of having a position.

[00:59:04] Chris Mayer: Well, for me, I don’t know. For me, personally, I don’t know if there’s anything that comes out of it specifically. I just think it’s a more general sense. You start to pay attention in a different way on earnings calls. You start to… When the management is speaking at conferences and new stories come up, you just… I don’t know if there’s necessarily any magic to it. It just feels like once you’ve owned something for a little while, you’ve gotten used to it. You’ve even seen how it trades and you’re just used to it and you’re more comfortable with it after you’ve owned it for a little while.

I don’t know how to explain it. Other than that, it’s a weird psychological thing I guess. At least, I find that it’s… I find it’s true most of the time. You own something, you feel you get a little more familiar with it than if you just didn’t own it and you just followed it more distantly.

Approach to selling

[01:00:11] Tilman Versch: After buying and hopefully having a 100-bagger, the process of selling comes in. How do you go about selling and what’s your approach to it?

[01:00:23] Chris Mayer: I have to say selling is the hardest thing in investing. If you’re doing a good job, you’re almost always going to sell something and you’re going to see it just goes higher, it’s higher a year or two later and that always drives you crazy, but if you’re really buying good assets and good businesses, that’s going to happen. It’s easier to sell if… not easier, but when something goes wrong, the company starts to go off the rails, maybe they did an acquisition you totally disagree with and you sell it. For me, I prefer to go out quickly. I have done partial sales but I’m never really happy with that because for me, I’m either in or I’m out. I don’t like to… something goes up, then take half of it and just let the rest ride. I don’t really like to do that so for me, most of the time when I decide I don’t want to be in something and I just sell it all pretty quickly.

[01:01:25] Tilman Versch: Markets can be somehow brutal, so you have sometimes phases where things just go nowhere and then explode. When you feel confident about the company, how do you keep to that company even if there is nothing happening?

[01:01:42] Chris Mayer: I’d say that happens most of the time. Most of the time seems like nothing happens and then you have this big move. 30, 40% moving months, and then not much happens again. Well, for me, it’s very hard, but you have to not let your emotions get tied up in the stock prices. You can’t feel good because it’s up and you can’t feel bad because it’s down. You just have to focus on the business. You really don’t have that much to look at. You’re going to get a report every quarter or every half a year. A lot of these European companies only report half-year results. You don’t let the trading influence you. I don’t know how to really say it other than that. You just have to train yourself not to get down when the stock price is down.

You can’t feel good because it’s up, and you can’t feel bad because it’s down. You just have to focus on the business.

[01:02:43] Tilman Versch: Do you have any ritual or something you do before you want to press the sell button?

[01:02:49] Chris Mayer: Yes, sometimes. I always feel a little sick when I sell something. It always feels like there’s this little voice like, “You’re making a mistake.” It’s never fun to sell anything, in my opinion. It’s rare that I’ve sold something with great authority and be like, “Yes, this is the right time to sell,” there’s always some doubt. You’ve done a lot of work with it. For me to sell something, usually, I’ve done a lot of work on the name already. Probably for me, I’ve owned it for a while, so it makes it harder to sell.

I would say no, there’s no ritual to it, you just sweat bullets and sell and life goes on. You can have to focus on what’s ahead, what you have, not what you’ve necessarily sold. I know sometimes it’s also tempting to keep track of all your sales, which I do, then review them and you can see how your decisions played out. You get a sense of how you are when your buy and your sell. Some people say they’re always a little early or always a little late. You can get a sense of how you are.

High growth SaaS sector

[01:04:06] Tilman Versch: There’s a practice to it. You sell a lot in this case and we are here to question you so further questions I will account for, this is the last call for questions so if you have any, drop them in the chat. There are three waiting for you. Neeshan is asking what’s your take on the high-growth SaaS sector.

[01:04:30] Chris Mayer: High growth… what’s that [crosstalk]-

[01:04:32] Tilman Versch: Software as a service.

[01:04:37] Chris Mayer: Oh, software as a service. I think those things can be great businesses. I don’t own anything in that sector right now, so I don’t know that my opinion is worth much there. Obviously, it’s a great business. It’s just always a matter for me of what’s the evaluation or how much can you pay.

Advice for younger investors 

[01:05:02] Tilman Versch: That’s a clear answer. I have another question from Dennis. He is asking what’s your advice for young people who want to get into the investment business.

[01:05:15] Chris Mayer: To get in the investment business?

[01:05:16] Tilman Versch: Yes.

[01:05:20] Chris Mayer: I think now because there are so many different ways to get ideas out there, you could create a website or a blog or get on something like Seeking Alpha and you can start to share investment research that you do. That’s always a good way to get in because you can distinguish yourself with your analysis and over time, and maybe you’ll get picked up somewhere, maybe somebody will be interested. I’ve known people who’ve gotten positions that way. They’ve picked up work at Hedge funds, even if just part-time analyst position or something, that’s a way to get in.

That’s one good thing about the world we live in now, it’s so easy to publish and share ideas. There are so many platforms. That’s the best way, you just get out there and just do it. Start doing it, start trying to share ideas, start trying to improve, and get feedback and criticism on your ideas. I’ve had people send me write-ups and say, “Love for you to just read this and give me your feedback,” I’ll read their write-ups and give them feedback and hopefully it helps them improve as an investor going forward.

Chris’ research process and how it was affected by Covid 

[01:06:38] Tilman Versch: There’s another question from Tyler. How long is your research process and how was that been affected by the COVID crash?

[01:06:48] Chris Mayer: It depends. Some companies are simpler than others and don’t require as much work and some are more complicated. If you’re doing a real estate company and you want to visit some of their major properties, that’s going to take a while. I would say the research process really depends. If it’s a simpler company, my research process then, I’m thinking, might be a matter of weeks before I get comfortable enough where I can start to buy something. If the position’s more complicated or if it’s in an industry that I’m not as familiar with then it might be months and [unintelligible 01:07:33] not the only thing I’m working on, but it might be a while before I really ever get comfortable or I may never get comfortable.

How is it affected during this crisis? Well, the biggest thing is I’ve not done any traveling. I haven’t done any company visits, and haven’t met with anyone face to face. That’s been a hindrance but not as great a hindrance. For example, one of the companies that I bought in March was Copart. They actually have a YouTube channel. You can go there, and they have tours of their different yards, I think I toured half a dozen different yards all over the place. You get a good sense of what their places look like, what they feel like, people work there, and even customers will put up videos, going through Copart yards, looking to buy certain cars. I got a kick out of watching a number of those.

You get both perspectives. You get the company showing off its yards and then you get the customer perspective, actually using it. In that case, it was remarkable. I was able to do quite a bit, even more than I would have because I don’t know that I would’ve necessarily found that before. I was able to do quite a bit just using the computer and online YouTube. It really depends.

Future 100-baggers

[01:08:51] Tilman Versch: That’s an interesting story to hear. If you look ahead five or 10 years from now and think about interesting hunting crowns for stocks and maybe 100 baggers. Which fields come into your head?

[01:09:13] Chris Mayer: Well, my first thought listening to your question is that it doesn’t really matter that much about the industry or the sector because when I did that 100-bagger research, that was one of the things that surprised me was the number of prosaic businesses that you wouldn’t necessarily expect, were on there. There were a number of oil and gas businesses. There were a number of simple businesses. It wasn’t like they were dominated by tech names, it was all Microsoft and Amazon intel or whatever. It was quite a mix. I wouldn’t worry too much about the sector. I think people may be putting too much emphasis on that. They want to know what sector is most attractive, but if you just focus on the basic economics of the business itself, it can be in a variety of sectors. I wrote up Old Dominion, ODFL in the blog, and it’s a trucking business. Who would think a trucking business could be such a wonderful compounded. The thing’s down 20, 30% for years and years and years. That’s because they have a good model and they have a good culture there, a good ownership group.

It doesn’t really matter that much about the industry or the sector because when I did that 100-bagger research, that was one of the things that surprised me was the number of prosaic businesses that you wouldn’t necessarily expect was on there.

They’ve managed to carve this niche out. If I would have sat here and said, “Well, you should look at the trucking industry.” No, I would never have said that. I know. I don’t worry too much about sector. There are good businesses there, and sometimes they do very simple things. Look at Domino’s Pizza. It’s been a fantastic stock.

I saw something, where I forget if it was Domino’s and Google or something. I think they went public around the same time. Tilman, you may remember, I don’t know, but Domino’s Pizza is actually outperformed. That’s so crazy. Who would have guessed that? That’s because the economics of that is so wonderful.

[01:11:16] Tilman Versch: To come to the end of our interview, which was fun and it was great to have all your questions. Thank you very much to the audience for all the good questions I was able to ask. Do you have something to add we haven’t covered and it’s maybe interesting what comes into your mind and maybe to bring back the bookshelf, if you’ve maybe came up with another idea for an interesting book you’ve recently read?

[01:11:46] Chris Mayer: Well, yes, another book I like to recommend for people is Peter Lynch’s first two books. They’re easy reads. He has In Search of 10-Baggers. He was the one who liked to talk about 10-baggers and he had a number of big winners. What I like about those books is how he talks about how he found these different ideas and… People simplify and say, it’s just by what you know, but he had some interesting insight in there about how he found certain ideas and still it’s dated because a lot of the examples he chooses are things that aren’t even around anymore, but those are good reads.

I’d recommend those, are kind of classic and I think they’re helpful for today. It’s been fun to review, Tillman. It’s been good talking to you and I know I’ve come across you on Twitter before, so it was good to meet you, sort of, on Zoom. Then now I have a face to connect to your handle.

[01:12:45] Tilman Versch: I hope we meet one day in Omaha because my plan was going there. I would have loved to meet you but…

[01:12:51] Chris Mayer: I’d love to go to Stuttgart.

[01:12:54] Tilman Versch: You’re welcome. We can…

[01:12:55] Chris Mayer: I love Germany. I’ve been to Germany a couple of times I’ve loved it. I love the whole… I liked Germany. I liked the whole beer garden culture.

[01:13:04] Tilman Versch: Yes, you can lot off good beer here. Also, sausages and stuff.

[01:13:09] Chris Mayer: Great stuff.

[01:13:11] Tilman Versch: You’re welcome here.

[01:13:12] Chris Mayer: Thank you.

[01:13:14] Tilman Versch: Thank you very much for the great interview and thank you to the audience for the great questions, and have a great day or week as well. Thank you.

[01:13:25] Chris Mayer: Thank you.

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