Episode 409: What to Do When the Market Punches You in the Face
On this week's Stansberry Investor Hour, Dan and Corey welcome Chris Mayer back to the show. Chris is co-founder and portfolio manager of Woodlock House Family Capital – a firm that focuses on long-term, patient investing. He has also written several books, including 100 Baggers: Stocks That Return 100-to-1 and How to Find Them.
Chris kicks things off by breaking down his "CODE" acronym that he uses for picking stocks – cheap, owner operator, disclosures, and excellent financial condition. He lists Brown & Brown as an example of one such company that checks all four boxes. And he shares a trucking company he likes because of its lower-than-average turnover rate. This leads to a conversation about the importance of management having skin in the game and why investors should mostly leave their portfolios alone. Chris then uses Monster Beverage as a case study for identifying a good company. He notes...
You had years to buy it and still make a hundred times your money. And it was evident in the financials... You saw very large, fat margins [and] big growth. And it was years that [it] was going along like this. So you had a chance to buy it during all that time. It was like right out there in the open... So the lesson there is when you find a really great business, you have a lot more time than you think.
Next, Chris talks about investor psychology. He says that it's difficult to hold stocks through large drawdowns and through periods of boredom, but that's how you can make a lot of money in the long term. Doing nothing is often the best thing you can do for your portfolio. Chris also covers how philosophy has influenced his investing style, the hidden opportunity in Swedish stocks, two specific Swedish companies that he likes today, and why you should always stick to your core principles – even if it means missing some winners along the way...
There's tens of thousands of securities. We have to have some way to get to some manageable number that we can work on. And so you have to also recognize that whatever principles you choose or filters you choose, you're going to miss out on some great winners.
Finally, Chris explains that staying true to your investment principles is hardest (yet also most crucial) when times get tough. It all comes down to knowing yourself, your risk tolerance, and what you're most comfortable investing in. Chris shares the names of two spun-off companies he's excited about today, as he expects a big surge in free cash flow for both. He clarifies that these are for holding long term rather than trying to make a quick buck. And Chris finishes with a discussion about why the recent tariff drama doesn't really matter...
It doesn't change anything that I'm doing... I'm not going to run out and sell any of these businesses because they're down 15% – or whatever it is – from their highs.
Click here or on the image below to watch the video interview with Chris right now. For the full audio episode, click here.
(Additional past episodes are located here.)
This Week's Guest
Chris Mayer is portfolio manager of the Woodlock House Family Capital fund. He co-founded the firm in October 2018. Chris got his start in finance in 1994 as a corporate lender, a role he held for 10 years. After that, he wrote investment newsletters for Agora Financial and worked with Bonner & Partners. Chris has been quoted many times by MarketWatch, has contributed to the Washington Post, has made multiple CNBC and radio appearances, and has been a guest on Forbes on Fox, Fox Business, CNN Radio, and Russia Today TV.
Chris is also a prolific author. His books include Invest Like a Dealmaker: Secrets From a Former Banking Insider, 100 Baggers: Stocks that Return 100-to-1 and How to Find Them, and How Do You Know?: A Guide to Thinking Clearly About Wall Street, Investing, & Life – among others. Chris graduated magna cum laude with a degree in finance from the University of Maryland. He also has a Master of Business Administration from the same institution.
Dan Ferris: Hello, and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research.
Corey McLaughlin: And I'm Corey McLaughlin, editor of The Stansberry Daily Digest. Today, we talk with Chris Mayer of Woodlock House Family Capital.
Dan Ferris: I've known Chris for decades now. He's a great guy, and a brilliant investor. Please take notes. This is one of the folks I really, really want you to learn something from, OK? So get out your pen, get out your paper, type on your computer, wherever you take notes. Get ready to do it. All right? So let's do it right now. Let's talk with Chris Mayer.
Corey McLaughlin: For the last 25 years, Dan Ferris has predicted nearly every financial and political crisis in America, including the collapse of Lehman Brothers in 2008, and the peak of the Nasdaq in 2021. Now he has a new major announcement about a crisis that could soon threaten the U.S. economy and could soon bankrupt millions of citizens. As he puts it, there is something happening in this country, something much bigger than you may yet realize, and millions are about to be blindsided unless they take the right steps now. Find out what's coming and how to protect your portfolio by going to www.americandarkday.com and sign up for his free report.
The last time the U.S. economy looked like this, stocks didn't move for 16 years, and many investors lost 80 percent of their wealth. Learn the steps you can take right away to protect and potentially grow your holdings many times over at www.americandarkday.com.
Dan Ferris: Chris Mayer, welcome back to the show, man. It's been a while.
Chris Mayer: Yes, it has. It's been a long time, Dan. How you doing?
Dan Ferris: Yeah, it's been – I just checked. It's been since August of 2021 here on the podcast.
Chris Mayer: Wow.
Dan Ferris: Yeah.
Chris Mayer: OK. A lot's happened since.
Dan Ferris: Yeah. A lot's happened since last Monday, but –
Chris Mayer: I think two bear markets – that's like two bear markets ago.
Dan Ferris: That's right. It's been a busy time, hectic time for investors, and it's getting more hectic every day, it seems.
Chris Mayer: Mm-hmm.
Dan Ferris: But I thought – I was thinking about how we should start this out, because you and I have so much history, we could start it a million different ways. But since it has been almost four whole years, I wonder if you would indulge me and begin by reminding our listeners what your core investing principles are, including your "CODE" that you've told us about before. Because I think that's a really good – I hope they take notes when you talk about CODE.
Chris Mayer: Yeah, so that was an acronym that I developed to kind of capture some principles that I wanted in the investments I look for. So the C was for "cheap," so basically, I'm looking for something that is going to be worth a lot more in the future, and that's kind of fundamental. And the O is for "owner/operator." I'm investing in companies where there's skin in the game, where the management team or board or somebody owns a lot of stock. And that's probably one of the most important ones, especially over a long period of time, get those incentives aligned.
The D was for "disclosures," which was just the public disclosure is good enough for me to kind of understand what's going on. Is it not overly complicated? Are there red flags in the way the company's organized? So that covers that kind of thing. And then E is for "excellent financial condition," which covers the balance sheet and financial strength. So for me, I don't invest in companies that have any financial leverage or have minimal financial leverage.
And they all kind of work in sync. You need all those things together. So those are the core principles. But the basic idea, too, is to hold on to these things for a long time. So there's very little turnover in my portfolio. It's buy and hold. And yeah, that's it in a nutshell.
Dan Ferris: Yeah. I think the incentives you talked about, the incentives play into the other three, don't they? Well, the other two, anyway, the disclosures and the excellent financial condition, because –
Chris Mayer: For sure.
Dan Ferris: – when you're handling your own money, you don't want to lie about it and get in trouble, and you –
Chris Mayer: Yeah. That's it. That's it. So when you have that – I sometimes say like that part of it is the most important, the alignment and the skin in the game, because that covers a lot of other things. You don't have to worry about it as much.
And it's true. There's a lot of empirical studies about this as well, but companies where there's – let's say family-controlled companies, where there's a family that owns a large percentage of the stock. Those companies tend to be less leveraged than their peers.
Dan Ferris: Now one thing I wonder about, I've never really studied those companies as a separate group, although when I happen upon them, I say, "Oh, OK that's good." But since you're focused on them, have you noticed a tendency to sort of allocate capital in a more careful, long-term manner, like doing the right thing when everybody's panicking, and not doing the wrong thing when everybody's euphoric, that kind of thing?
Chris Mayer: Yeah, I would say that's definitely true. Of course, there's always exceptions on both sides, but as a general rule, definitely. If you have – if you own a lot of stock, you're less likely to dilute yourself by selling shares. You are also more likely to invest when others are fearful, so when a hired hand really sees no particular upside to sticking his or her neck out and investing when things are bad, the owner, thinking much longer term, will more likely do that.
So you definitely see that. There's anecdotal evidence about that, that those kind of firms invest countercyclically. That's a big one. The lack of dilution we talked about, that's another big one.
So yeah, and the other thing I think comes up, too, is focus on [research and development (R&D)]. So a lot of times these companies will invest more heavily in research, things that don't pay off for years to come, right? That's, again, where that long-term mindset comes into play.
So there's a lot of things that it leaks into, and I think over time, I've come to appreciate more and more how powerful that is, because it also affects how you incentivize people, how you pay them. So a lot of times, these longer-term, family-oriented companies, they're just better at keeping good people, paying them.
I know for a specific example, like Brown & Brown is a company I think you have in the portfolio, too. I'm not sure if you still have it. But I've owned it since –
Dan Ferris: We sure do. Yeah.
Chris Mayer: So I've had it since the inception of my fund, and I think we started buying shares around $25, and it's $125, until recently. It still might be like $110 or something. But that's a company where the Brown family owns a significant amount of stock, and the CEO is a grandson of the founder, and there's a certain ethos there about how they think about incentives. And there's lots of stories of people who've gotten wealthy there as well, becoming shareholders of Brown & Brown, people that worked there, sold to Brown & Brown, stayed on.
And so that kind of legacy, those are the things I really look for, and those tend to be marks of very successful companies.
Dan Ferris: It's cool, I have to say. It's cool to find companies where – in Extreme Value, I often like to start out the report by discussing the history of the company. When I find that it has something to do, that it bears upon how they're behaving today, that's gold to me, because when things change and they get a different type of management team, and then they're not doing so great for a while, and then they come back, and they get another management team, oh, we're doing better now. It sort of muddies the waters for me a little bit.
Chris Mayer: Yeah.
Dan Ferris: I deal with it, but I like it when there's a straight line from the founding to the present in terms of the management continuity. It just gives me a sense of conviction that I don't think I can really get any other way.
Like I've got these two high conviction sort of natural resource plays, the last place you'd ever want to get conviction, because I know the management teams, and I'm really highly confident that they're going to behave well through the cycles. And they have. They've behaved brilliantly through the cycles.
Chris Mayer: Yes.
Dan Ferris: And –
Chris Mayer: Yeah, companies do have a kind of – a DNA, and that gets set really early.
Dan Ferris: Yeah.
Chris Mayer: And persists for a long time. Well, it absolutely can be messed up, but it takes time. And if you do have that kind of continuity, yeah, that's a good sign.
Dan Ferris: Yes. And it doesn't have to be a family member. It could be like Costco, right?
Chris Mayer: Absolutely. No, it doesn't – it could be ranks from within. And you see it in different ways. You could look at – sometimes I'll look at turnover, and that's an interesting thing, because sometimes you'll see like a top performer in an industry – let's say like Old Dominion Freight Lines, which is in trucking, which is an industry which is notoriously difficult to find drivers, keep drivers. Their turnover is far less than the industry average, and they train most of their own drivers. And it's the way they manage it, too, when times get tough. They don't let go of their drivers. They keep their drivers, but maybe they have them work on the docks for a little while. They still pay them the same amount. They're still treated well. But they still have them, so when that demand rebounds, they can put those people back as drivers.
Again, that's also a family-run organization, was family – founded by a family, but has since kind of stepped away. But you still have that culture and you still have the people that have been promoted to the executive offices, CEO and so forth, have been there for 20 years or longer. So again, to your point about their being kind of a – like a golden thread from the founding on to the present.
Dan Ferris: Yeah. Is this something that you discovered on your own, or do you have – were you influenced before you even started investing other people's money, and before you were in finance? Where does this – where does this knowledge of this come from for you?
Chris Mayer: Yeah, that's a great question. I'd say it's like slowly built up over time, because I started my career in finance in banking, corporate banking. And in that world, you get to know the businesses very well. You get to know the people very well. And we always did these deals, we'd have personal guarantees. The founders of the businesses would have to sign on the loan personally. They were responsible for paying it. If it didn't work out, we could in theory go after their personal assets.
So I just saw the power of that over a long period of time, and especially sometimes when things would go south. And so I retained that.
And then I know – he's an obscure, not as well known financial writer, but Martin Sosnoff wrote a couple of books that are long out of print that I really like. One was called Humble on Wall Street, which came out in I think '77 or something – '78. And the other one was Silent Investor, Silent Loser, which came out in – I think in the '80s, but again, out of print. But this is a point he would emphasize all the time, is the power of having management skin in the game. And one of his phrases was, entrepreneurial instinct equates with insider ownership. It's one of those things I always remember, which he always taught and emphasized, this aspect of –
Dan Ferris: Is that EIEIO?
Chris Mayer: – management as problem solver? Yeah. There you go. It is, isn't it? EI –
Dan Ferris: It is. EI –
Chris Mayer: Holy cow. I never –
Corey McLaughlin: I will never forget that now. Yeah.
Chris Mayer: Yeah. I never realized that.
Corey McLaughlin: Hopefully.
Chris Mayer: Entrepreneurial instinct equates – yeah. So there you go. But that was another influence along the way. And then, yeah, then my own personal experience. I remember particularly through like the '08 crisis, you'd see some of these management teams that didn't have skin the game would – I thought they were a little quick to raising capital, which maybe a more creative team that had skin in the game might have worked a little harder before going to the market and raising capital at such unattractive times. Little things like that.
So it's a combination of a lot of influences and reading, experience, that have got me here.
Dan Ferris: Well, Chris, I promise I'm paying attention, but I couldn't help going immediately to Amazon and looking for Sosnoff's books. Humble on Wall Street is apparently a collectible item. It starts at $116 a copy. So –
Chris Mayer: OK. That's not that bad.
Dan Ferris: – I'm going to hold off on that one.
Chris Mayer: I've actually seen it higher.
Dan Ferris: No kidding?
Chris Mayer: I think I've –
Dan Ferris: That's a – [crosstalk]
Chris Mayer: – I think I've made the market for – yeah. I think I've made the market for that book. Maybe it's come down, along with everything else.
Dan Ferris: Yeah.
Chris Mayer: So, yeah. I met him before, too, when I wrote – was writing my newsletter way back when. I visited his office, and, yeah, had – he was very generous. He spent over an hour with me. He loves to talk about art. He's very much into art. And he likes to draw lessons from the art markets to the stock market. And he's got lots of stories where he bought certain paintings and left them alone for a long period of time, and were worth a lot of money. So as you can see, that's probably very applicable to investing, where we see the prices all the time, but if you just kind of bought something, socked it away, then it might be a better outcome for a lot of people, similar to art.
Dan Ferris: Yeah. It's – that lesson comes from all directions and all strategies. Even the tale of Jesse Livermore – I forget what it's called now.
Chris Mayer: Yeah.
Dan Ferris: That famous book about Jesse Livermore –
Chris Mayer: Yes.
Dan Ferris: – where they don't name him explicitly.
Chris Mayer: But – [crosstalk]
Dan Ferris: Right, right, right. The Fever. And he says, my – I always made my money in the sitting, not in the buying or selling, right?
Chris Mayer: Yeah.
Dan Ferris: The sitting, he says. So even that guy, who traded his way to like three or four bankruptcies or something, knew that making money was about just sitting on a position that's working. And with you, it's sitting on a business that works, right?
Chris Mayer: Right.
Dan Ferris: Over the long term.
Chris Mayer: Right. This is one of the things that always fascinates me about investing generally. If you just look at businesses, and I know this was in Thomas Phelps' original 100 to 1 in the Stock Market, and he did this with like – Pfizer was his example. And he just had some basic financial data, like net income, sales, [return on equity ("ROE")], like earnings per share, really basic stuff.
And it was – every year, I don't know, like a 20-year span, he put these numbers out, and if you just looked at that, of course, you'd never sell it. OK, yeah, it didn't mean that it went up every year. Sometimes – maybe then it was down a little for that year. But it was still perfectly within a band of expectations. Returns were good. Return on equity and all that was good. Of course you would have left it alone.
But the stock price was all over the place during this time. Cut in half, and up, and down, and if you just left it alone, you were up like 25x or something more than that. It was crazy.
And I see that even in stocks in my own portfolio. I wrote about this recently to my investors. I shared with them some examples, and just in the seven years I've had my fund, there have been stocks where if you look at our overall [internal rate of return ("IRR")] over a five- or six-year period, it's like 21% compounded. But in the midst of that, I had to suffer a 45% decline, a 55% drop in one case. It's astounding.
But again, if you just looked at the business, you would never see that. The one that fell 45% actually increased earnings per share every year that we've owned it. So if you just looked at the business, and you looked at the sales, you looked at earnings per share, looked at margins, you would never have guessed that somewhere in that run there was a 45% drawdown from peak to trough. But if you just left it alone, you've got about a double, five years. So – which is perfectly fine.
Dan Ferris: Perfectly fine.
Chris Mayer: Yeah. Yeah.
Corey McLaughlin: And Chris, you, of course, wrote a great book, too. Here, one I read a long time ago, 100 Baggers, where you talk about a lot of this, a lot of these ideas.
Chris Mayer: Yeah. And that came right out of Phelps' book.
Corey McLaughlin: Totally –
Chris Mayer: That was the inspiration, was to update that, what he did. So that's how that came about.
Corey McLaughlin: Yeah. And I was looking back through it, once I knew you were coming on, I had earmarked some pages back when I first read it. And the first one I got to was when you tell the story about Monster. I know you've probably told about – talked about this a lot. But just the – and I remember reading that for the first time, and kind of being blown away by it, because that's one of the names that I think a lot of casual investors hear about, when they see these long lists of top returning stocks over the last 10, 20 years, whatever, but Monster.
And I was wondering if you could just use that maybe as a brief example of why that company turned out the way it did.
Chris Mayer: Yeah. Well, I always remember the great thing about Monster, and that particular example, is that you had years to buy it and still make 100 times your money. And it was evident like in the financials. It was very clear this company was – you saw very large – fat margins, big growth, and it was years it was going along like this. So you had a chance to buy it during all that time. It was like right out there in the open, which sometimes is not always the case, but in this, you could really just see it. And you had so much time.
That's one of the things I take – I think that's one of the things I take the most from Monster, and of course, it wound up going up many more times than just 100. I think it was up, I don't know, 700 times at some point, and maybe is up more than that now. I don't remember.
So the lesson there is when you find a really great business, you have a lot more time than you think. It could be – just think if you had looked at Monster and it was up 10x and you thought, wow, I've missed it. That would have been a shame, right?
But focusing just on the business, it had huge what we call TAM, total addressable market. That's the other thing about Monster. And it was making deals with distributors. And so there was definitely a story there that you could follow.
But another thing that was interesting about Monster was there was quite a bit of skepticism about it for a long time.
Dan Ferris: Yep.
Chris Mayer: And in the book I pointed out – I think there was a value investors club write-up that was very negative on that stock, and the competitive position of it. So even though it had these very thick margins and on paper it was doing very well, there was still a lot of skepticism about the durability of that.
So those are some things that come out of that case study, but that was one of the interesting ones, for sure.
Dan Ferris: Yeah. When I think of energy drinks, of course, Red Bull was the ultimate example. And the classic story that goes around about that is that people tasted it and they hated it.
Chris Mayer: Yeah, that's right.
Dan Ferris: And it's terrible. If you've ever tasted it, it's terrible.
Chris Mayer: That's exactly right.
Dan Ferris: And yet –
Chris Mayer: I remember that's part of it, too. People would look at it, they'd taste it, and it was terrible. It was like, how can this possibly –
Dan Ferris: And they said, this is – nobody's going to drink this. Right?
Chris Mayer: That's right.
Dan Ferris: Yeah.
Chris Mayer: That's right.
Dan Ferris: And everybody drinks the damn stuff. I don't get it. It's just – I don't personally get it.
Chris Mayer: Right. Yeah. So that's one of those things where maybe the Peter Lynch style of trying the product yourself didn't help you.
Dan Ferris: No. No, it kept you away from a huge, huge winner.
Chris Mayer: Yeah.
Dan Ferris: Yeah. Wow. They're the only one, if you watch Formula One racing, they're the only one with two teams in the field, and –
Chris Mayer: Right.
Dan Ferris: – there are very few – there are only 10 teams, you know?
Chris Mayer: Right. Of course, the other thing about Monster, and this is true of all these big winners, is that it suffered multiple drawdowns.
Dan Ferris: Yeah.
Chris Mayer: And I know in the book – I remember I went through and I had a little – I think I had a little heat map where I showed – and it dropped 40% multiple times during its run. So, one of – I'd say like two big lessons out of that book that I've learned about these long term winners is one is they all go through those periods where you have these massive, getting-cut-in-half-type drawdowns. Even Berkshire's been cut in half at least three different times.
But you also had long stretches of boredom, which is also I think just as bad. It's just as tough, maybe tougher, to hold on to a stock that goes nowhere for five, six, seven years. That's hard. And there were a lot of times that happened. I've done this with my stocks as well, where I've gone back, and actually, I think it was Brown & Brown I did one of these case studies on, where in a 16-year stretch, it was up – I don't remember the numbers now. It was up a good bit, many times, but there was a six-year stretch in that where it went nowhere, from peak to peak.
So that's hard, when you're watching other stocks, you're looking at other stocks, there's always something going up. Berkshire was the best-performing stock in that study, and it had a seven-year run where it went nowhere in the late nineties. Remember when the tech boom was going, and the S&P was up 200%, 300% during that time, and Berkshire went nowhere. That's tough to hold. But that was the best-performing stock in the study. So you can imagine some of the other top performers that weren't quite the best, had longer stretches of underperformance. And it's just kind of normal, natural, and you have to get used to it if you're going to be a long-term investors and make these really good returns.
Dan Ferris: This calls to mind the great quote of William Goldman, right? Nobody knows anything. He was talking about Hollywood. But nobody knows anything. Nobody knows anything about the price of securities, the direction of the price of securities. Nobody knows anything about it.
And if you make decisions based on it, well, you're making a decision based on something you yourself do not know, and that nobody knows. It's not how you do it.
Chris Mayer: Right. Over the very long term we know that stock prices generally will follow the business performance, right? You're not going to create a great business like Costco or something and not have the stock go up over time. But there are stretches, of course, that can go days, weeks, months, years, where they can be decoupled, and that can be very frustrating.
Dan Ferris: Yeah. Yep. And great, fantastic businesses, like Costco, if we're going to stick with that example, they can become extraordinarily cheap, and still be a fantastic business. They can become extraordinarily overvalued, and if you buy at that peak, you're not going to perform for a long time. But the business keeps chugging.
Chris Mayer: Yeah.
Dan Ferris: So it's just like – it's got to be intensely frustrating for people to look at that and be expected to not do anything.
So we often wind up here in these discussions where we have to admit that it's – investing is – I would say it's technically not extraordinarily difficult, but it is emotionally downright near impossible for most people.
Chris Mayer: Yeah.
Dan Ferris: Most people don't – yeah.
Chris Mayer: I totally agree. Sometimes I think that's my role. Like the biggest service I provide my investors is just getting them to stick in there and leave it alone, and be kind of like, yeah, almost like a shrink, telling – giving them – bucking them up when times are bad, and not letting them give up.
But yeah, I totally agree. It's like the basic principles of it are pretty simple, if you just – buying a basket of great businesses, leaving them alone, or you don't even have to do that. You just buy the index fund and you leave it alone. That part's not so difficult. But the emotional toll, and the ability to resist doing something, that's the thing. People want to do something. And the ability to resist that is – that's hard.
And the emotions of going through it, like we're going through it now. Things are in free falls. It looks like some kind of economic catastrophe unfolding before our eyes. But we've been here before, and I think, again, if you have that multi-year outlook and you look out five years or so, this is going to be another blip, just like COVID, just like other things we've seen happen before.
Dan Ferris: Yeah. Yep. Nothing new under the sun. Chris, before we hit record on this, I was asking you about the books on the shelf behind you. You are an avid reader of philosophy.
Chris Mayer: Yes.
Dan Ferris: Does this have any – is this a hobby, or does it integrate with investing at all?
Chris Mayer: Wow, that's a good question. I started it just kind of as a hobby and as an interest, but of course it plays into everything in life. Not just investing, but everything. So it is kind of – it is very important. And yeah, taking that more philosophical outlook about things, I think it makes it easier to go through those difficult periods, for sure. And different philosophies have different things to teach you.
Dan Ferris: I haven't thought about that. That's –
Chris Mayer: Yeah.
Dan Ferris: That's good. You'd better be philosophical about it when you're getting – you're getting beat up like Trump tariff tantrum, you know?
Chris Mayer: Right. That's right.
Dan Ferris: And this too shall pass.
Chris Mayer: That's it. That's it.
Dan Ferris: Yeah. I was emailing –
Chris Mayer: Yeah, I think lots of different things with these philosophies – you learn different things. The pragmatic philosophers teach you different ways to think about things. Platonists are different. So yeah, I really enjoy reading a lot of these different things and thinking about them. And then, yeah, they spill over inevitably into what I'm doing.
Dan Ferris: Is there one that really sort of speaks to you as a market philosopher who didn't know he was one, let's say?
Chris Mayer: Well, I've written a couple of books –
Dan Ferris: For example, I know you're into Korzybski, right?
Chris Mayer: Yeah. I was just thinking that.
Dan Ferris: Yeah.
Chris Mayer: I was just thinking of him. I've written a couple of books about Korzybski, of course, so he's – yeah, he – there's a lot in there that you can apply to markets, and of course, he didn't know it at all, or he didn't address that audience at all, which was the perfect avenue for me to write my book, How Do You Know?, which I did. And I wasn't the first one to try to do that, either. There was somebody else who tried it in 19 – I forget the date now, was it 19 – late '50s, early '60s, when someone else tried to write a book. And it was actually Magee, the same guy who wrote the book on technical analysis, The Bible of Technical Analysis.
But he wrote a book, and it was called General Semantics on Wall Street. I remember that was the first edition, and I always chuckle, because that didn't last very long. And there was a second printing that came out, and it was called Winning on Wall Street. So he knew to drop – the general semantics was not a good – not a selling – to put on the cover.
Dan Ferris: Yeah. Nobody cares. Exactly.
Chris Mayer: Nobody cares. Nobody cares about that.
[Crosstalk]
Dan Ferris: How to make people not care.
Chris Mayer: So he went right to greed for the second edition.
Dan Ferris: Yeah.
Chris Mayer: Yeah.
Dan Ferris: And so winning –
Chris Mayer: [Crosstalk] – book title.
Dan Ferris: Woodlock Family House – Woodlock House Family Capital, I see 100 Baggers, Invest Like a Deal Maker, How Do You Know?, and World Right Side Up.
Chris Mayer: Yeah.
Dan Ferris: Are you saying World Right Side Up is also influenced by Korzybski? You said two books.
Chris Mayer: No, it was – two books. The other one I wrote was not – probably not even on my website. It's a book I wrote published by the Institute of General Semantics, which is Korzybski's institute that he started in the 1930s. And that book is called Dear Fellow Time Binder, and it's about –
Dan Ferris: Oh, I have that on the shelf. That – yeah.
Chris Mayer: Yeah, yeah.
Dan Ferris: I forgot about that.
Chris Mayer: Yeah. And How Do You Know? is also now published by the Institute of General Semantics as well, so those are the two books that are really directly related to Korzybski.
Dan Ferris: All right. I just – I want to make sure I have the complete works of Chris Mayer –
[Laughter]
Chris Mayer: Yeah.
Dan Ferris: Very good. Do you want to talk about a stock or two that you like now?
Chris Mayer: We can do that. I don't care.
Dan Ferris: Or maybe I could ask you to talk about Swedish companies, just to say a few words about Swedish companies.
Chris Mayer: OK. Yeah. So I got interested in Sweden because there were all these winners from over there. And so I'm doing these – not only the 100-bagger study I did, but then other studies I've read, I've been reading, and I get interested in this kind of thing. Well, these top performers.
And I came across a chart where there are a bunch of Swedish companies that outperformed Berkshire. I wish I had kept the original chart that I found. And it wasn't like from inception, but it was over like a 20-year period of time, or something like there.
And there were these, for lack of a better word, kind of holding companies, companies that grew a lot through acquisition, and they had names like Lifco and Lagercrantz, Addtech and Indutrade. And I was like, "Wow, what are these things?"
And so yeah, I started to investigate more in Sweden, and turns out there are a lot of winners there. There's a very good market. In fact, I saw a study not long ago which looked at stocks that had gone up at least 1,000% in the last decade, and of that population, Sweden had contributed something like 20 companies that population, which was –
Dan Ferris: Wow.
Chris Mayer: – like a 4.5% – it was way oversized based on the market cap. So it was the big ones, there was like the U.S., China, India, and I think Japan, but the fifth most contributor was Sweden.
Dan Ferris: Who knew that there were even 20 publicly traded Swedish companies at all?
Chris Mayer: Yeah, there's only like 10 million Swedes, but they produced a number of these winners, so –
Dan Ferris: That's amazing.
Chris Mayer: Yeah. So like Lifco is an example, it's one I own, and that was the first – my first purchase in Sweden, and it came in 2021. And yeah, it's a really great company. It's half owned by Carl Bennet, and other insiders own some stock, too, so you have the skin in the game element, not leveraged.
They do a lot of different things, so it's a holding company. They have over 200 different businesses. Some of it, they do like dental supply, so like the cement that goes in your teeth when you go to the dentist to get fillings and things. They have all these other industrial parts and segments, fittings and things that they make. So it's a very broad, diversified business.
And they take that capital, and they reinvest, and they buy other businesses, and they just kind of keep going. So it's kind of like – in the U.S., maybe the closest kind of equivalent would be something like a Danaher or a Roper, these kind of businesses that they grow primarily through acquiring other small niche industrial businesses. And so it runs this very decentralized model, which is a very Swedish thing, that's – it's decentralized. They call – they're called Swedish serial acquirers. That's what people call them. And I'm not necessarily that fond of that name, but that's what it is. I prefer to think of them more as they're buying and building businesses kind of as they go along.
But yeah, Lifco has been – and by the way, it's also global. It's not like it's just a Swedish thing. So they do business all over the world. And it's a very solid, solid business. Generates lots of cash, and then they reinvest a good chunk of it and generate good returns on capital, and it's a machine. They've been doing this now, if you look, I think it went public in 2000 – well, I don't remember now, '14, or maybe a little earlier. But it's been a great winner on the stock market. And so that's one example.
And there's other smaller ones, too. So you can kind of – if you poke around, you can find ones that are a little earlier in the curve. I'm on the board of one of these small publicly traded companies. I don't want to talk my book too much, but it's also an interesting one, called Teqnion. TEQ is the ticker over there. And similar to Lifco, except much earlier on, so there are only 30 businesses there, around 30. There's been some acquisitions this year.
So that's the kind of thing you can find over there. And it's been very interesting. And again, there's lots of skin in the game. All these companies are owned – the management team are owners, own a good bit of stock, they're not leveraged, generate cash, all the beautiful things we like about businesses, that they seem to exhibit.
Dan Ferris: That's interesting.
Chris Mayer: I make many trips to Sweden in a year. I go at least three or four – at least four times a year. Last year, I probably went more than that. And it's a good market to fish in. And again, everyone speaks English. The disclosures are all in English. So the disclosures are good. It's a good market that way.
Dan Ferris: Very interesting. And only 10 million people, and all those winners. There must be something in the water in Sweden.
Chris Mayer: Yeah, well, there was – there's a lot of theories about this, but one is there was this company called Bergman & Beving. They got started in the early 1900s. And fast-forward, they were the first one that kind of discovered the power of this decentralized model, and then buying other small industrials, and kind of reinvesting and doing that. And so they were so successful, and then they had spinouts.
So, Addtech and Lagercrantz are spinouts of Bergman & Beving, and they've been very successful. So I call it like the Silicon Valley effect. It was like, you just had these tech businesses that happened to be successful in Silicon Valley, and it just attracts talent there, and copycats, and now we associate Silicon Valley as being a tech haven or center. And it's kind of a similar thing happened there. They had this model, it was very successful, other people sort of copied it, drew similar talent here, and so now there's a proliferation of these kind of models there that have all been very successful.
Dan Ferris: I have a question that I forgot to ask you earlier when we were talking about the code, if you don't mind us just quickly backtracking that before we move on. I wonder, have you ever or would you ever own a company like TransDigm, which is a levered company, but they've been – Nick Howley is a brilliant, brilliant guy, and had a fantastic idea, and has executed on it quite brilliantly, and does some of these things that you're talking about.
Chris Mayer: Absolutely.
Dan Ferris: But he pursues this – he likes the private-equity model, and he pursues that, with reference to leverage, dividend policy, and just the way he thinks about the business. Would you ever own that? Have you?
Chris Mayer: That's a great, great question, and I've looked at it many times, and I will say no. I'll – TransDigm, the kind of counter to TransDigm is Heico, and I own Heico, H-E-I-C-O, which is similar. They're often put in the same bucket. They're different businesses. And they've both been very successful.
Heico has done it with very little leverage, and TransDigm does it with eye-watering leverage for me.
Dan Ferris: Yeah.
Chris Mayer: But I cannot deny, they've – it's been successful. It's like I tell people, sometimes this just comes down to personal preference. It's like do you like deep dish pizza or New York-style pizza? It doesn't mean one's right and one's wrong. So TransDigm has a formula that's very successful, and I don't deny that it's been very successful, and I expect it will be successful. But it's just not my flavor –
Dan Ferris: There's an interesting philosophical – sorry, there's – I didn't mean to interrupt, but there's an interesting philosophical point here for me. As you say, it is a personal preference. It's partially about investing in things that you understand, and you understand, founders who don't like a lot of leverage. Which is great. I love that idea.
But I wonder how much can I ever understand TransDigm, because a lot of leverage – things can happen that you can't anticipate. And so how much can you ever really know? Even if they're brilliant, they have a great track record, they have a culture that has really executed very well, and I wonder, because I have it in the Extreme Value portfolio. I think they're brilliant. I think they've done a great thing. I do have that straight line from the founding to the present moment that I often like to see.
But I scratch my head about the leverage now and then, because I think, how much – they've done it the whole time, but you and I both know, that distaste for leverage, and wanting the well-financed business, it's about all the things that you don't know can happen, the things you may have to ride out. So I'm in a philosophical quandary about it constantly, just –
Chris Mayer: Right.
Dan Ferris: Not a question, just –
Chris Mayer: No, that's – I'll also say – well, I'll tell people, you have to come up with some sort of investment philosophies. You have to have some principles. And then you have to recognize – because these principles will also help you filter out the investment universe. As you know, there's tens of thousands of securities. We have to have some way to get to some manageable number that we can work on.
And so you have to also recognize that whatever principles you choose or filters you choose, you're going to – you're going to miss out on some great winners. My aversion to leverage means I've missed out on some fantastic winners. Or the owner-operator thing, there have been some great winners where the management team has had very little skin in the game, the way I would define it.
But I'm OK with that, because I'm looking at it as something that is long term that I have to repeat again and again and again and again. And like you say, there are going to be times when it's going to be very uncomfortably leveraged. We've both been through the 2008 crisis, and in that period of time, even an OK balance sheet became a problem very quickly. So I would rather not have to deal with that.
Also, it folds into a lot of other things on how you do investing. Like I run a very concentrated portfolio. I have 12 stocks. The top five are half of it. The top three are I think about 33%, about 11% – two are about 11% – yeah. Around 11%, the top three, each.
So I am not going to – when you have a structure like that versus a structure where you have 30 stocks, you can – you think about it a little differently, maybe. Some things you can't put in a concentrated portfolio, but you might put in a portfolio with 30. There are different ways that you – have risk management things in different ways. So it all kind of fits together, is one way I would think about it, too.
Dan Ferris: It does.
Corey McLaughlin: And having those principles, right, is so important in times like we're going through right now, when you're – maybe we're flirting with bear market territory here. I've been hearing from people that I haven't heard from in a long time, asking about the stock market, so I know that it's a panicky, fearful time, obviously.
Chris Mayer: Yeah.
Corey McLaughlin: And I think just – right? Just having those principles, right, is that part of how you get through these time periods, too, like – [crosstalk]
Chris Mayer: Yeah, well, I would also say –
Corey McLaughlin: – six months from now –
Chris Mayer: Absolutely. Absolutely. And I would say times like this is when people then tend to abandon those principles. So it's easy to follow the principles when everything is going well. The test of any principle is do you stick with it when things get nasty? And that's the challenge.
Dan Ferris: Right. Don't tell me your risk tolerance. Show it to me at times like this. Right?
Chris Mayer: I always like – one of my favorite Mike Tyson quotes is he says, "Everyone's got a plan until they get hit in the mouth."
Dan Ferris: Yeah.
Chris Mayer: And so everyone's got investment principles until the first bear market comes around. Then it's –
Dan Ferris: That's right.
Corey McLaughlin: Yeah.
Dan Ferris: Yep. We – it's all a learning experience. Then you find out who you really are. It's just like – as you say, it's like anything else in life. You find out who you are under pressure.
Chris Mayer: Yes.
Dan Ferris: And many people are under pressure right now.
Chris Mayer: Yeah. That's the quickest way to learn about yourself, and that – you have to make your – your investment philosophy and principles have you match your own personality, what you know about yourself. I know – like there's some businesses I'm just uncomfortable owning. Like most retailers, I'm just uncomfortable with that model. I don't – And I know that when things get bad, I'll have a hard time holding it. So – and I've learned over time. I've seen it, mistakes I've made.
And so I try to put myself in situations where I'm not going to be forced in that corner again. So if you're – I'm always thinking about that. I think that's a good guiding light, too. There are some things that if you're just not comfortable with, then that's fine. You just don't own those things. There's lots of other fish in the sea.
Dan Ferris: Right. It's Buffett's circle of competence. There's a clear boundary beyond which you'd probably be better of not going beyond it.
Chris Mayer: I would say my circle of competence over time has gotten smaller. It's like the number of things I really want to own – yeah. You would think it would get wider, like you'd learn more, and you'd want – no. Actually, it gets smaller, because the number of things I really want to own, it's just – yeah. You get more picky, I guess.
Dan Ferris: Right. But it's – but actually, I would say, in describing that evolution, the circle of competence becomes clearer, and I'll only speak for myself, Chris, because I look back, and I say, well, I thought that one was inside it, but it's outside it. So yeah, I can see how you say it's getting smaller, but –
Chris Mayer: Clearer may be a better way to put it, actually. I like that.
Dan Ferris: It was never really inside the circle to begin with. I was just wandering in the wilderness, thinking I knew something that I didn't know.
Chris Mayer: Well, Dan, I remember – I have a memory – I don't know. This doesn't necessarily make us look great, but it's probably valuable for our listeners anyway.
Dan Ferris: Yeah. Yeah. I know what you're going to say.
Chris Mayer: One of the first things you and I worked on together –
Dan Ferris: Yeah. Yes.
Corey McLaughlin: I want to hear this.
Chris Mayer: One of the first things we worked on together was like reinsurers. We went to Bermuda, and we met with all these reinsurers, and we did a bunch of research on that. And I don't know, I'm sure Dan agrees now, but in retrospect, I'm like, we didn't know – we had no business being there. We were way out of our –
Dan Ferris: Yeah. Yeah, that's one of those –
Chris Mayer: That didn't lead to successful investments I think for either of us, so we learned –
Dan Ferris: Yeah. Well, I was flat on – oh, God, I can't even remember the name of the company. I've blocked it all out.
Chris Mayer: Yeah.
Dan Ferris: I put –
Chris Mayer: No, you had one that was OK. It was like "Partners" or something. I remember mine was like Scottish Re, which was a disaster, and I got out of it before it completely unfolded. But there were – yeah, it didn't work.
Dan Ferris: Yep. Yeah. I wish I could remember the name –
Chris Mayer: We did have a good time in Bermuda. We met with a lot of companies.
Dan Ferris: It was – it was that guy –
Chris Mayer: And we had a lot of fish stew.
Dan Ferris: Yep. And – yeah, fish stew. That was the best part of it, was Bermuda fish stew. We met with that one particular fellow who I felt taught us more about reinsurance than any other human being I've ever encountered in my life, and I don't remember his name.
Chris Mayer: Yes. Yes.
Dan Ferris: But I remember the company. And actually, in Extreme Value – I'm trying to look through the portfolio quickly. He –
Chris Mayer: I do have a faint memory of this guy.
Dan Ferris: They wound up – yeah. Yeah. I wish we could remember. We're going to frustrate our listeners by trying to remember. But we actually sort of made a small single-digit profit, as I recall, on that company, which I'm sorry, I can't find it right now. And he just taught us – I'll never forget the lesson he taught us about these risks with the geographical zones. He taught us about Hurricane Hazel – started out in like Lesser Antilles or someplace, and killed a bunch of people in I think it was Haiti or Cuba or someplace, maybe Haiti, and then it made landfall in the Carolinas and went and killed 80 people in Toronto. And those aren't in the same geographical zone.
So if you're writing X percent of your net worth, as these companies do, per zone, you were way over your skis there on that Hurricane Hazel deal.
Chris Mayer: Right.
Dan Ferris: So the lesson there was don't draw the zone like everybody else. You've got to know what you're doing when you draw a zone, which is a crazy thing. OK, now we've got to know weather patterns.
Chris Mayer: Yeah.
Dan Ferris: It just got more and more complicated, so that you could never say that you really knew anything.
Chris Mayer: Wow, that's I think – that's I think – yeah, that's the key takeaway for me for that now, is it just got more and more complicated, and you could never be sure that you really knew anything. That pretty much sums it up to me, as well.
Dan Ferris: Yeah. And it's classic Charlie Mungerism, right? The too hard pile.
Chris Mayer: And that was a long time ago, by the way. That was like 2004 or '05, something like that. So we've evolved as investors since. But that's an example of –
Dan Ferris: Oh, yeah. I also lied. We lost 14% on it in Extreme Value. IPC Holdings.
Chris Mayer: IPC. That was it.
Dan Ferris: Was the company. Yep. Held it for 223 days and lost 14%, which is probably a fantastic result, on average –
Chris Mayer: Exactly. Exactly.
Dan Ferris: – for a reinsurer.
Chris Mayer: Yes.
Dan Ferris: It's like to invest in reinsurance companies, you have to be Warren Buffett. You don't have to be like him. You have to be him. And he had his problems with them as well, too, so let's – and General Re wasn't exactly the greatest thing.
Chris Mayer: Mm-hmm.
Corey McLaughlin: Well, you learned, and had some good fish stew along the way, it sounds like, so –
Dan Ferris: Yeah. We did. And the fish stew was worth the trip, I think. And if readers bought the stock and lost 14% but went and had the fish stew, I'm going to call it breakeven.
Corey McLaughlin: There you go. Yep.
Dan Ferris: All right. You got any other names that you think teach a good lesson for listeners, or that you're excited about right now?
Chris Mayer: Yeah. I mean –
Dan Ferris: But you're not – I have to tell listeners, Chris is not like the excited about right now pick kind of a guy, if I'm – he's the guy you want to go to these long-term lessons for. So write – put that in your notes, too.
Chris Mayer: Yeah. Yeah. One of the things I – right now, there's a lot – I would buy almost everything. So, because everything's down so much. But I've been – gotten a lot more excited about a company called Lumine Group, L-U-M-I-N-E, and it's a spinoff of Constellation Software.
Dan Ferris: Oh, really? Nice.
Chris Mayer: Yep. Yep. And yeah, I've owned it since it's been – like the average is around probably $17 or something like that. It's $40 around right now. But they have grown – they have like a 35% return on invested capital over the last three years. They've invested in – a ton of money in – I think there's just going to be a surge in free cash flow here in the next couple of years. So I think that's one I'm particularly excited about. There's a lot of growth.
The other one is kind of a sister company to that would be – called – what's called Topicus, and –
Dan Ferris: I thought that one might come up.
Chris Mayer: Yeah. That's also one that should have a big surge in free cash flow. That's also a spinoff from Constellation. And I've owned that one since the beginning as well, and added to it. But I think both those are pretty timely right now, because again, they've made all these investments. They've deployed a lot of capital, last year particularly for Topicus. And if you just do kind of back of the envelope math based on returns, they've gotten – in the past, when they deployed capital, they're making 25% or so returns on this capital, and you project that forward, there's going to be big surge in free cash flow this year and next year.
And I don't think the market quite fully appreciates it yet. But yeah, those are ones that I would expect to own for a lot of years. So like you just said, Dan, I'm not saying buy right now, and then you're going to make a return in three months and sell. These are really good businesses that should compound capital at high rates for a long time.
Dan Ferris: All right. So before we get to our final question, I have the penultimate question for you.
Chris Mayer: OK.
Dan Ferris: Or maybe it's a comment and you could expound a little bit on. This is for our listeners. Please notice that we are talking with Chris in the midst of the Donald Trump tariff tantrum, and the market is down substantially, and it's wildly volatile from day to day. It's red and it's green, and it's up and it's down. And you have not heard Chris mention that one single time. Why – Chris, why have we not heard you mention that one single time?
Chris Mayer: Yeah, that's good – a good point to make I think right now. I saw just this morning that we are – it's the fourth worst start to the U.S. market in history, history being 21st century and 20th century. Yeah, I think the top two are like from the 1930s, and then the third worst was 2020, and now we're the fourth, which is kind of amazing.
Dan Ferris: It is amazing.
Chris Mayer: But one reason why is because it doesn't change anything that I'm doing. Like I haven't really touched the portfolio this year as far as selling anything, and I don't anticipate doing anything. So for me, I don't want to say it's a nonevent. It's important. Things are happening. But it's not like making me want to run out and sell my stocks or make a switch somehow. So that's probably the biggest reason. It's not in the actionable category for me. It's not – at least not yet, that I can say –
Dan Ferris: It's not – wait a minute. That was interesting. It's not in the actual category for me. What do you mean?
Chris Mayer: Like an actionable category. Like –
Dan Ferris: Oh, an actionable – OK. I see. I'm sorry. I didn't hear you.
Chris Mayer: Yeah.
Dan Ferris: OK.
Chris Mayer: Yeah. It's –
Dan Ferris: It's not in an actionable category of news or information.
Chris Mayer: Right. Because when I'm look – because I'm studying these businesses primarily, and so it's not – I'm not going to – like I say, I'm not going to run out and sell any of these businesses because they're down, whatever, 15% or whatever it is, from their highs. And of all the stuff we've been talking about, this is really normal for equity investors. This is – these things happen from time to time. And we've had more than our share of it lately than usual.
I was thinking about this the other day. I was saying this is my seventh year running the fund, and I've already had three bear markets in that time, which is unusual. That's a lot of bear markets. You usually have like one, you know?
Dan Ferris: Yep.
Chris Mayer: So – but it is still normal when you take the longer view. It's –
Dan Ferris: Yep.
Chris Mayer: So as you said before, this too shall pass.
Dan Ferris: Yeah. All right. So let's – with the penultimate question out of the way, let's do the final question, which is the same for every guest no matter what the topic, even if it's a non-financial topic. Same identical question. If you've already said the answer, please feel free to repeat it. And the final question is simply – it's for our listeners' sake. If you could leave them with one final idea, one final takeaway, what would it be?
Chris Mayer: Well, my big takeaway, and I often will say something along these lines, is the key word for all this investing is patience. And if I could boil it down to one thing, it would be that. You have to be patient. It's like when you plant flowers or something, or vegetables. You don't expect immediate results. You have to give it time. You plant the tree. You have to give it time to grow, and then there are going to be good growing seasons and bad growing seasons, and it's going to be winters, and springs, and summers, but you don't pull it out. You have to give – you give it time.
So I think the biggest thing for any investment strategy or principles or however you decide to tackle the problem is you have to find ways to cultivate that patience. There's lots of ways to do it. One – I'll give them one little crutch I like is that coffee can portfolio. Dan, you know about this.
If you Google it, the coffee can portfolio will come right up. It's an article by – it came out in the 1980s, but the basic idea is you create a portfolio with the intention that you're not going to look at it for like ten years. Just leave it alone and see what the results are. And there's been lots of like – people have run these different experiments, but invariably, what happens if you have something in there that's a huge winner, and you have a few things that don't work out, maybe have a zero or two, and then you have a couple of things that are mediocre, and then you have a couple of really good performers. But the end result is that it's much better than if you had been messing with it the whole time.
So that's my key lesson. Find a way to cultivate patience with your investments, and I think you'll be happy with your results, and I think you'll be happier just in life generally, be less worried about stuff.
Dan Ferris: Yeah.
Chris Mayer: Especially with Trump tariffs and all the other things that go on. So that's my parting thought.
Dan Ferris: Excellent. Yeah. I hope people take you up on that. I think it's Robert Kirby was the guy –
Chris Mayer: Yes.
Dan Ferris: – who wrote the article, and he described two clients who were husband and wife, and they had both taken the buy advice of the same adviser in separate accounts. The husband never sold anything, and the wife took the sell advice, and the husband, upon his death, she found out he had dramatically outperformed and wound up with the portfolio you describe the zeroes, the mediocre, the really good, and the phenomenal outperformers, really –
Chris Mayer: Yeah, I think there was one stock in there that was worth more than the wife's account entirely, so –
Dan Ferris: Right. That was the – Xerox and its spinoffs, I think.
Chris Mayer: Yeah. Yeah. So it's – that's the lesson.
Dan Ferris: Yep. And it seems like you're pursuing like that. You've got your big winners and their spinoffs that you're holding.
Chris Mayer: Yes, I do. Yeah. That's right.
Dan Ferris: All right. So we've got another coffee canner sitting right here, folks. You should learn all you can from him. It's always a pleasure to talk with you, Chris. Thanks for being here.
Chris Mayer: Yep. It was great talking to you, Dan. Great talking to you, Corey. Thanks for having me on. And yeah, it was a pleasure.
Dan Ferris: Always a pleasure to talk with my old friend Chris Mayer. I think we've known each other for more than 20 years at this point. And he's taught me a lot, frankly. I'm really grateful to have him as a friend. And as he made clear at the end there, he's taught me a lot about patience and focusing on your circle of competence and all the things that he discussed during the interview. Really good thinker, and a good guy to listen to right now.
Corey McLaughlin: Yes, exactly what I was just going to say. Good voice of reason and calm voice to listen to right now. That's like exactly what you – if you're looking at this actually for long-term investing, it's exactly the kind of advice you would want to listen to, I think, or want to hear, and want to hear from somebody who has looked at all of these things in depth, and what makes great long-term winners. And he obviously has – 100 Baggers is the book that I've read from him that – when you get to the end of it, you're just like, OK. Now I feel good about –
Dan Ferris: Yeah.
Corey McLaughlin: – having this approach, if you want to take that approach that he outlines in the book. And I think it pays off in times like these, where you're just – there's a lot of – a lot of noise out there, a lot of fear. But he's obviously – and you, too, have just been there before and seen this.
Dan Ferris: Yeah.
Corey McLaughlin: So it's – not exactly this, but these moves, right?
Dan Ferris: Right. Right. One last thing I do want listeners to take away is that the conviction to hold through these things really comes directly from the things that Chris was talking about, that he understands, and that he relies on the code, the cheap, and ownership, and disclosures, and excellent financial condition. When he finds those things, that's how he gets the conviction to hold on through all of these bear markets and things that he's had to deal with in seven years of managing other people's money, which have been really a turbulent seven years, as he pointed out.
And people wonder, how do you do it? How do you hold on? Well, you hold on by knowing who you are and knowing what's in your circle of competence and sticking to it, simply put. It's probably more complicated than that, but we want to put it as simple as possible.
So yeah, that was a lot of fun. And that's another interview, and that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as we really, truly did. We do provide a transcript for every episode. Just go to www.InvestorHour.com, click on the episode you want, scroll all the way down, click on the word "Transcript," and enjoy.
If you liked this episode and know anybody else who might like it, tell them to check it out on their podcast app or at InvestorHour.com, please. And also, do me a favor. Subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts, and while you're there, help us grow with a rate and a review. Follow us on Facebook and Instagram. Our handle is @InvestorHour. On Twitter, our handle is @Investor_Hour.
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You should be aware of the real risk of loss in following any strategy or investment discussed on this program. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies or mentioned on this program may not be suitable for you. This material does not take into account your particular investment objectives, financial situation, or needs, and is not intended as a recommendation that is appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this program.
Before acting on information on the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
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