[00:02:50] Kyle Grieve: So in 1969, Warren Buffett said, quote, I am 15 percent Fisher and 85 percent Benjamin Graham, unquote. However, Robert Hagstrom intelligently pointed out that Warren had changed a lot since then. Robert’s hunch is that if Warren were asked this question today, he thinks it would probably be a lot closer to 50/50 between Philip Fisher and Benjamin Graham.

[00:03:11] Kyle Grieve: Once I read this, I realized I should probably take Philip Fisher’s teachings a lot more seriously. I will do exactly this with you today. We’re going to cover Philip Fisher’s book in a lot more detail. This is the second time I read this book and the second time I got way, way, way, way, way more out of it.

[00:03:29] Kyle Grieve: And part of that is just the podcasting process but the reason that I think this time I got a lot more out of it is that I’ve deepened my fascination for deep due diligence. The first time I read it, I was a much more novice investor and it was not as important to me as it is now. But you know, due diligence is a very popular subject in investing circles, but it’s also not necessarily taught to the public in much depth.

[00:03:57] Kyle Grieve: Professional fund managers and analysts are the masters of the craft, but it’s hard to learn from them as much as what they do is, kind of kept close to their chest. It’s, it’s the tools of their trade. They don’t necessarily want to divulge it to everyone because it gives up some of their advantage.

[00:04:11] Kyle Grieve: But I think Philip Fisher did a wonderful job in this book discussing how we can learn as much as possible about one specific business using a variety of different resources. So Philip Fisher writes, I spent part of such spare time as I had in reviewing both the successful and more importantly, the unsuccessful investment actions.

[00:04:30] Kyle Grieve: That I had seen others take during the preceding 10 years, I began seeing certain investment principles emerge from the review, which were different from some of the most commonly accepted as gospel in the financial community. So as you can see here, Fisher, like Benjamin Graham and Warren Buffett was the contrarian.

[00:04:49] Kyle Grieve: He observed principles that were not part of standard Wall Street dogma. And he doubled down on that with a ton of success. Another contrarian insight he had was about the strength of holding outstanding companies. He observed that holding outstanding companies and staying with them through the gyrations that included World War I, the Great Depression, and World War II would have produced very high returns compared to buying low and just selling high.

[00:05:12] Kyle Grieve: One of the common themes that I’ve come across while researching multibagger stocks is that small is good. Every research piece I’ve come across has the highest returns in the lowest decile or quartile compared to the rest of the sample size. And I think Philip was aware that small companies could deliver outsized returns compared to their larger counterparts.

[00:05:30] Kyle Grieve: Philip understood that companies that could grow sales and profits faster than the industry as a whole would end up outperforming. But he also realized that company size matters less than the ability of management to ideate growth strategies and execute on these strategies. Now, how does Philip envision an investor finding a business that can grow sales and profits faster than the industry for multiple years?

[00:05:52] Kyle Grieve: That’s one of the most critical questions in the book, and he hopes to answer it. Fisher admits that the investors not involved in the day to day operations of a business will just not be able to get the same information as a well-informed analyst or an insider of that business will have access to. He mentions a few corporate areas that would be important to understand at a much deeper level, such as executives, a business’s production process, its sales organization, and its R&D department.

[00:06:19] Kyle Grieve: But here’s a problem, insiders with knowledge of these areas are unlikely to divulge all of the information you want to someone not involved in the business. After all, giving your competitors shortcuts to compete with you is not a wise business decision. I see this often when analyzing a business where I ask myself, I really wish I could understand the economics of each segment of this business much better.

[00:06:40] Kyle Grieve: But then I think competitors are probably asking the same questions. And if the business gave up that information, it would quickly lead to capital entering the markets and that company’s profits or margins being eroded away. My favorite example of this was with Amazon Web Services. So let’s rewind back to 2006, the year AWS was launched, and it wasn’t even mentioned in their shareholder letter.

[00:07:03] Kyle Grieve: Perhaps it just wasn’t worth mentioning at that point because it was just an idea in its infant stage. Now we go to 2010 and in the shareholder letter, it was briefly mentioned just one time go forward again in 2015 and how it’s mentioned 21 times. And at this point AWS was producing 7.8 billion in revenue and about 6.

[00:07:22] Kyle Grieve: 5 percent of Amazon’s total revenue. This means from 2006 to 2015, AWS grew from producing zero revenue to 7.8 billion, an astronomical growth rate that they weren’t in any rush to share with competitors. 2015 is the first year that Amazon also shared the profit margins from AWS. In 2015, they had 265 million in operating income, only a 3 percent operating profit margin.

[00:07:47] Kyle Grieve: Today that operating margin is at 30%. So if we’re truly to learn about a business, how does Philip Fisher suggest we overcome the fact that insiders in the business won’t be open to sharing everything about a business? Fisher suggests using the business grapevine. Fisher writes, it is amazing what an accurate picture of the relative point of strength and weaknesses of each business in an industry can be obtained from a representative cross section of the opinions of those who, in one way or another, are concerned with any particular company.

[00:08:19] Kyle Grieve: Most people, particularly if they feel there is no danger of their being quoted, like to talk about the field of work in which they are engaged and will talk freely about their competitors. Go to five companies in an industry, ask each of them intelligent questions about the points of strength and weakness of the other four, and nine times out of 10 surprisingly detailed and accurate picture of all five will emerge.

[00:08:41] Kyle Grieve: But competitors aren’t the only source of information on a specific business. We can also learn from vendors, customers, trade associations, executives, research scientists in a variety of fields such as governments, universities, or other competitors. Another great source I’ve used is current and former employees.

[00:09:01] Kyle Grieve: If you have a rapport with someone in this position, they may be more willing to open up and be as honest as possible about the current environment. Once you have someone to talk to, the next step is to ask the right questions. Philip Fisher did a fantastic job in his book of breaking down 15 points to look for in a business that fit his criteria.

[00:09:19] Kyle Grieve: You can use his criteria to ask the best possible questions or to prompt you in the right direction. I’m going to go over a few of them that I find the most useful in a little more detail. So he had 15, some of them just, I didn’t think were quite as applicable or as important. So I’m just going to go over the ones that I found most impactful so that this episode doesn’t go too long for you.

[00:09:43] Kyle Grieve: So the first one here I want to go over is, does a product or service exist with a large multi-year growth runway? So if you want a business that you can hold for multiple years, you want growth that can last for multiple years as well. This point is just so important. I think it’s so important.

[00:09:59] Kyle Grieve: That’s why he made this his first point of the checklist. So when you look at a business’s products and services, you should aim to determine if there will continue to be a market for them many years into the future. You want to know if their products will continue selling and hopefully increase the units that they can sell in the future.

[00:10:16] Kyle Grieve: If you determine the product doesn’t have a bright future or that it’s competition can create a better product. That’s a very good signal that the opportunity is a pass. The next point here is does the management team have the right makeup to continue developing new and improved products. Once the current growth initiative is complete, you want to look for management that is incentivized to continue creating shareholder value.

[00:10:39] Kyle Grieve: While shareholder value can be created via distributions, rarely will managers find as good of an opportunity as investing back into their own business at very high rates of return. So when you are assessing a business, look at things such as the performance of past product releases, projects in their pipeline, growth initiatives for current products.

[00:10:59] Kyle Grieve: And adjacent use cases. Fisher doesn’t discuss much about incentives and alignment, but I think there are key concepts that can help investors stay aligned with management. You want management to be aligned with you as a shareholder, and one of the best ways to ensure that is very high levels of insider ownership.

[00:11:15] Kyle Grieve: So in the 1984 Berkshire Hathaway shareholder letter, Warren wrote with 47 percent of Berkshire stock, Charlie and I don’t worry about being fired and we receive our rewards as owners, not managers. Thus, we behave with Berkshire’s money as we would with our own. That frequently leads us to unconventional behavior, both in investments and general business management.

[00:11:39] Kyle Grieve: So when your CEO has 99 percent of his net worth in the stock of the business, he’s managing for you and himself, the alignment is as close to perfect as you’re going to get. So next point here, how effective are the company’s research and development efforts in relation to its size? So I’ve always kind of grappled with how to assess the use of capital.

[00:12:00] Kyle Grieve: Into research and development and then figuring out what kind of profits the R and D spend of a given business is producing for the business. I’m not sure an exact figure is necessary to see that a business is intelligently deploying R and D. So let’s go over that in a little more detail. Fisher has some advice to help us determine the efficacy of R and D to the fundamentals of a business.

[00:12:21] Kyle Grieve: A simpler and often worthwhile method is to make a close study of how much in dollar sales or net profits has been contributed to a company by the result of its research organization during a particular span, such as the prior 10 years. An organization which in relation to the size of its activities has produced a good flow of profitable new products during such a period will probably be equally productive in the future as long as it continues to operate.

[00:12:47] Kyle Grieve: under the same general methods. So let’s take a look at some examples using his framework right here. If we look at alphabets, R and D spending over the last decade, I get a figure of a 242 billion. So now when we look at the Last 12 months revenue, they are at 307 billion and we look at their net income and we get a figure of 74 billion.

[00:13:12] Kyle Grieve: So those numbers look pretty good, but I think we probably need to compare it to another business. Maybe there’s not necessarily a close comparison for alphabet, but let’s just throw another kind of tech type company like Microsoft and take a look. So over the last decade, they spent 171 billion in R and D.

[00:13:30] Kyle Grieve: And this has resulted in a trailing 12 month revenue of 236 billion and a trailing 12 month net income of 86 billion. So that means alphabet has seen about 30 percent of its R and D budget turn into profits in the last decade, which seems like a very good number. And then Microsoft has seen about 50 percent of its R and D budget.

[00:13:46] Kyle Grieve: Turn into profits, which is obviously very, very good. So those are some of the numbers that you’re going to be looking at some of these very impressive businesses. And obviously that could mean good things for the future. So with the massive sums of money being spent on R and D by these businesses, you can see why it’s going to be very difficult for other businesses to come in and try and compete with them.

[00:14:08] Kyle Grieve: So Adam Cecil pointed out in his wonderful book where the money is, High gross margins allow businesses to spend more on R and D, which can further cement their competitive advantages. An additional point worth mentioning from Adam Cecil is that R and D spend is treated like an expense that will not produce future revenue and profits for a business according to gap accounting.

[00:14:29] Kyle Grieve: So Adam’s argument is that R and D does create value in the future. And if it was amortized on the income statement, you would get a much more accurate reality of the value it creates as net income would be a much higher figure. So onto the next point here, does the company have a worthwhile profit margin and what is it doing to maintain or improve it?

[00:14:48] Kyle Grieve: You could just as easily replace profit with cash flow in here. Protecting profit margins is vital to a business’s success. It’s also a great indicator of a business’s moat. So if you find a business with a long history of stable or even rising profit margins, you are probably looking at a business with a deep and wide moat.

[00:15:08] Kyle Grieve: One of my favorite examples is Copart. Copart’s net margins have grown from 15 percent in 2014, which is very respectable to 33 percent today, which is extraordinary. Chuck Ackery has said that the average American business has profit margins in the high single digits. So margin of 33 percent is three to four times as high as the average American business.

[00:15:28] Kyle Grieve: The problem with high margins is that competitors can see them too. And what this means is that it can attract more capital into the industry, which can eat into the leader’s margins. But this only happens if there is a path to compete with the business. And in Copart’s case, this path isn’t so simple and therefore it hasn’t happened yet.

[00:15:48] Kyle Grieve: Now, Copart has done a great job increasing margins and seems to have a near impenetrable mode. The next point is does the company have outstanding labor and personnel relations? Yeah. I think Fisher understood very well how important good relationships between employees and employers are. There is a wonderful graph that depicts what drives shareholder returns over different time periods.

[00:16:09] Kyle Grieve: In the short term, it’s things like sentiment change. But when you look 10 plus years, the biggest variable is the people and culture in that business. So Ian Castle came to a similar conclusion in his book, intelligent fanatics. My biggest takeaway from that book was the importance of having great relationships with employees and making them truly feel like they were a part of the company and its growth story.

[00:16:31] Kyle Grieve: Nearly all the businesses and the leaders that he profiled placed very high levels of importance on empowering their people to work as hard as possible by aligning incentives. When you have well aligned incentives and have owner employees, a lot of value can be created. A hidden value of this is in the output that a worker can complete.

[00:16:51] Kyle Grieve: One of my favorite examples from Intelligent Fanatics was Nucor, a steel products producer. Through former CEO Kenneth Iverson’s Incentive Program, he was able to generate astronomical output rates compared to competitors. Whereas most businesses in the steel industry had total costs of about 80 per ton of steel produced, Nucor dropped that in half to 40.

[00:17:13] Kyle Grieve: So the reason that they were able to achieve these incredible rates of efficiency was that employees at all levels and management as well were incentivized to produce past their quota. So if we take that incentive program away, employees would basically probably just do the minimum amount of work needed to meet their quota.

[00:17:31] Kyle Grieve: But new core system incentivize employees to push past that quota, which was a win for new core shareholders and its employees. On the other hand, you most definitely want to develop an awareness of when relationships between employees and management are weak or weakening. This can signal that the company culture isn’t that strong or that the company’s policies are not conducive to retaining talent that is often needed for a company to continue growing.

[00:17:55] Kyle Grieve: The best way to do this is to talk to current and former employees. Glassdoor is an imperfect system for doing this analysis. Another method that I’ve kind of turned to is just hopping on LinkedIn, going to a company’s profile on LinkedIn, looking for a couple of people that work for them, reaching out to them and seeing what kind of information that I can get.

[00:18:16] Kyle Grieve: So the next point here that I want to go over is what competitive advantages does the business have that make it different from competitors? For this analysis, I prefer referencing Hamilton Helmer’s book, Seven Powers. You can learn more about this book in an episode that I did where I got to interview him on TIP episode 600.

[00:18:34] Kyle Grieve: So the powers that I found most prevalent are six out of seven of them. One of them is just, you just don’t see very often, but so let’s just go over what they are. So the first one is going to be scale economies. Scale economies is essentially when a business where unit cost decline as volume increases.

[00:18:52] Kyle Grieve: So Costco is a very, very simple example of this. Costco makes deals with their suppliers. They buy them in very, very high volumes. Quantities, oftentimes they’ll, buy all of the quantity of one of their suppliers. And because they’re able to buy up so much of it, they are able to secure lower prices.

[00:19:10] Kyle Grieve: And because they’re able to secure lower prices, they then go a step further. And they actually pass those savings on to the customers of Costco. And that’s why Costco has such loyal customers. So the second power here is network economies. Network economies is defined as a business where the value realized by a customer increases as a user base increases.

[00:19:29] Kyle Grieve: So I think, Amazon is a very, very simple example of this. if you’re looking for a new product, you’re going to just hop on amazon. com and you’re going to type in whatever you want in the search bar. And then, who knows how many products will come up? You search, I don’t know, Kleenex.

[00:19:43] Kyle Grieve: And you might get a couple hundred different products showing up. Then you can further refine the process. You can look at only things that are four stars or higher. You can look at things that are cheaper or more expensive. You can look at ones from specific suppliers. Maybe there’s someone that you really like.

[00:19:59] Kyle Grieve: And so because. Amazon’s search criteria has all of this data, basically the more people and the more suppliers that are on their means that they get more and more data. And that allows the user to improve their experience. The more and more they use Amazon. So the third one here is counter positioning.

[00:20:17] Kyle Grieve: Which is defined as a business that adopts a new superior business model that incumbents cannot mimic due to the anticipated cannibalization of their existing business. So the simple example here is just what Hamilton Helmer uses in his book, which is Netflix versus Blockbuster. Netflix moved towards this rental business that made tons of sense for customers, but unfortunately didn’t make sense for Blockbuster’s business model.

[00:20:43] Kyle Grieve: And when Blockbuster finally tried to Kind of replicate the business model of Netflix. They were way, way, way too late and just didn’t work out. And look at Netflix now and blockbuster has one location, I believe in Oregon now. So that counter positioning is a great power that for a business to have the next power here, I want to go over is just switching costs.

[00:21:04] Kyle Grieve: Switching costs are found in a business where customers expect a greater loss than the value, they gain from switching to an alternate. One of my most favorite examples here is just Constellation Software. I mean, Constellation Software has, I think somewhere around a thousand businesses now, so obviously, they don’t just have one switching costs, but they have so many different types of businesses.

[00:21:25] Kyle Grieve: And one of the business industries that they’re in are in the medical field. So for instance, they have a patient flow software in hospital. So, that patient flow is embedded in the hospital. All the doctors, nurses, and any other support staff know how to use that exact patient flow software. So, the facts are if you wanted to switch out of that software, you’re going to have to retrain everyone.

[00:21:49] Kyle Grieve: That’s going to cost money. It’s going to cost time. It’s going to cost headaches. So a lot of these types of products, they’re just super sticky. They stick around. And they stick around for a very, very long period of time. So switching costs also a wonderful moat to have. So the next power or moat as I refer to it is branding.

[00:22:06] Kyle Grieve: So a business with good branding is a business that enjoys a higher perceived value to an objectively identical offering due to historical information about it. So easiest example, LVMH, I think everyone’s probably aware of that. You look at all their high price purses. Of course you can buy another purse from a competitor for probably a fraction of the price, right?

[00:22:27] Kyle Grieve: But LVMH has this history and it’s developed this incredible. Amount of trust and perceived value and scarcity with his customer base. And that’s why LVMH can get away with charging such a premium for their high priced apparel and why they’ve been doing it for a really long time. And they’re probably going to be doing it for a really long time into the future.

[00:22:48] Kyle Grieve: So the last power here that I like is cornered resources. So business with the corner resource is a business that has preferential access. It’s to a coveted resource that independently enhances value. So pharmaceuticals is probably one of the simplest examples that Hamilton Helmer mentioned to me when I got to speak to him.

[00:23:06] Kyle Grieve: So when you think about it, let’s say Merck owns the IP on a drug and basically that drug will last, it’ll have a, a length of time where no one can kind of copy it. And during that entire time, Merck basically will get. 100 percent of the profits from the sale of that drug. Obviously, it ends at some point, but while they have it, it’s very, very good.

[00:23:29] Kyle Grieve: And an example I really like is Todd Haushalter at Evo, which is a company that we obviously talk about a lot on the show. So, he’s a guy where if he was poached off of Evo, he would probably carry a lot of value with the other company that he’s with. So hopefully he sticks with Evo. So the point of all this analysis and looking at boats is to really identify why one business is superior to others in the industry.

[00:23:55] Kyle Grieve: But more important than just finding out which is the best, you want to focus on finding out why it’s the best. So even more importantly, you want to get a very good grasp of whether this advantage is sustainable over long time periods. A company with an advantage for just a few quarters has a very low probability of succeeding over the long term.

[00:24:14] Kyle Grieve: So if you want a wonderful business, you should be placing a very large emphasis on finding the durability of a company’s moat. The next point here is, does the company have a short range or long range outlook regarding profits? So this is one of my favorite areas to look at in a business. Why? Because I’m constantly searching for alignment between management and shareholders as a long term shareholder myself.

[00:24:37] Kyle Grieve: I tend to be attracted to businesses that think in the same light. So I just listened to my cohost Clay Finck’s episode TIP637 on the Amazon shareholder letters and I think Amazon has done a tremendous job focusing on the long term. Jeff Bezos is well known for saying that this is only day one when it comes to Amazon.

[00:24:53] Kyle Grieve: This means he can justify spending today at the cost of short term profits to strengthen Amazon’s relationship with its customers in the future. This is a massive, massive competitive advantage for Amazon that Bezos has created. Because he prioritized the business more than the stock. Amazon has been able to make a string of different investments in different areas.

[00:25:13] Kyle Grieve: Most of them admittedly are failures, but some of them stuck very well, just like we mentioned with AWS. So if Amazon had constantly been searching for super quick fixes, just to enhance his income statement as quickly as possible, innovation in that business would have looked much, much different. In fact, I doubt we’d probably even be talking about Amazon like we do today if they’d taken that route.

[00:25:36] Kyle Grieve: So when you are conducting business research, try to pay attention to what management is really trying to do. Are they willing to take a hit to the stock to strengthen the business further in the long term? And lastly, as a long term shareholder, you should be aware of the volatility that owning long term oriented businesses can offer.

[00:25:54] Kyle Grieve: You will be required to wait while the market is wrong on a business that you own. Warren Buffett said this well in the Buffett Partnership Letters. The course of a stock market will determine to a great degree when we will be right, but the accuracy of our analysis of the company We’ll largely determine whether we will be right.

[00:26:11] Kyle Grieve: In other words, we tend to concentrate on what should happen, not when it should happen. So the next point I want to go over here is how will growth in a business be funded? There are really three possible ways for a company to fund growth, internal financing, debt financing, and equity financing. So in internal financing, there’s lots of attributes.

[00:26:35] Kyle Grieve: For me, it’s most definitely my first preference. If all things being equal, one business could internally finance versus the other options. I would take internal financing in an instant. Why is that? So I think it’s because internal financing really allows a business to stay open to optionality. if a business has debt or has to dilute shareholders, that optionality is obviously not the same versus if you are internally funded.

[00:27:00] Kyle Grieve: Additionally, if something bad were to happen to the business, but it has, a large cash position, or it has the ability to, a fortress balance sheet, like Berkshire Hathaway does, you don’t have to rely on debtors to bail you out. Warren Buffett has a great line where he talks about not having bailouts.

[00:27:23] Kyle Grieve: And I think that really applies here. On top of that, you don’t have to worry about debtors taking their share of business and leaving equity holders with little to nothing. I mean, I don’t think this necessarily counts with investors who look for businesses that are growing. Obviously, you want businesses that are going to continue growing its income stream and profits.

[00:27:42] Kyle Grieve: But you know, if you are the type of investor looking at, asset plays, this is obviously very important because if the assets, if there’s not enough asset value, then all asset value is going to go to bondholders and debtors before it goes to shareholders. And a lot of time they’re left with absolutely nothing.

[00:27:59] Kyle Grieve: So the next method is going to be debt financing. So this would be my second preference. So while debt lowers the income of the business, because obviously there’s an interest expense, this can actually be seen as a positive as it also reduces income taxes. Debt can also be refinanced in the future to further decrease interest expenses as interest rates fluctuate, which we’ve obviously seen a lot happening well up, up until kind of that 20, 22 period.

[00:28:29] Kyle Grieve: So debt can also be seen as a positive in certain businesses that have, I guess you could call it a hidden moat where future investments will accrue small profits today, but big profits down the road. And the thing that’s really cool about that is obviously if they’re making small profits today, maybe you’re not going to see it on the income statement and it’s not going to have that big of an impact, but years down the road, it will obviously have a big impact.

[00:28:52] Kyle Grieve: And then the other thing that’s really interesting is that. Once they have that large amount of cash flows, they can sometimes just wipe that debt off and, forego a lot of interest payments. So at Berkshire, Buffett said, we would love to acquire businesses or invest in capital projects that produce no return for a year, but that could then be expected to earn 20 percent on growing equity.

[00:29:14] Kyle Grieve: So this just kind of plays into the point that Warren Buffett, seeing as he’s an owner of the business, he doesn’t care about investing in a company where there’s no profits, but we’ll show up, after a year, maybe even a couple of years down the road. And that’s kind of the type of management that I also would like to be aligned with.

[00:29:32] Kyle Grieve: So the last type of financing here is equity financing. This is my least favored. So it can destroy shareholder value when equity is issued, especially when it’s issued on very cheap shares. Many managers. You see this method as free financing is there’s no obligation to pay back anyone. Right. But the fact is it’s not free because you’re financing the business essentially at the expense of your shareholders.

[00:29:57] Kyle Grieve: Again, if you are financing at cheap prices, but unfortunately the fact is that. Even though there is a way to use equity financing that can be beneficial, which I’ll go over, it’s mainly abused. And I think that the reason it’s abused and the reason that a lot of equity issuance happens is just that there’s a lack of knowledge about capital allocation just in business in general.

[00:30:22] Kyle Grieve: Some companies have no choice but to look at equity markets for financing when they can’t internally fund growth. And maybe they just don’t have the financial health to justify having a bank lend them money. That’s why you see this a lot. Like, I like looking at smaller businesses. A lot of times they have to issue equity in order to grow simply because banks maybe don’t know them, don’t have a good enough relationship.

[00:30:45] Kyle Grieve: Maybe some of them don’t have a long history of profitability. So a lot of times they have to use that and that’s kind of their only option. And then even bigger companies, right? And that’s just their way of growing is to issue equity. They just keep doing it. And sometimes it can work. Now, a lot of times it doesn’t.

[00:30:59] Kyle Grieve: And so I generally try to say. Pretty far away from businesses where I know they’re going to have to issue equity in order to continue growing. Now, as I was talking about earlier, there is a time where equity can be used to fund growth. And that is when shares are overpriced. So let’s take a look at how this is possible.

[00:31:20] Kyle Grieve: So a theoretical business, let’s say, is worth a billion dollars and has 50 million shares outstanding. So that comes out to about 20 a share. But let’s just say right now it’s trading at a steep discount to its intrinsic value, and it’s trading at only 10 a share. So this business then raises 200 million to fund some of its growth initiatives.

[00:31:37] Kyle Grieve: They issue 20 million shares to raise the needed funds. So now I know it’s a little bit harder to do on podcast form, but if you put all this in and look at the intrinsic value. Because they’re issuing shares that are cheap, the intrinsic value has actually dropped from the 20 per share to 17 per share.

[00:31:54] Kyle Grieve: Obviously, that’s not great, right? So, but now let’s contrast that with a business when shares are trading at a premium. So let’s take the exact same business, and let’s say that now instead of trading at 10, it’s trading at 40. Double its intrinsic value. Let’s just say for the sake of simplicity, they still need to raise $200 million.

[00:32:14] Kyle Grieve: So now they only need to sell or issue 5 million shares. And in this case, intrinsic value actually increases from $20 to $22. So these equity issuances, they can make some sense, but they have to be done at the right time, and it has to be done by a management team that has a very good understanding of the intrinsic value.

[00:32:34] Kyle Grieve: Of their business. And unfortunately, I just, I just think that’s a, it’s pretty rare. It does happen, but it’s rare. So when considering a business future, I think you should always consider how the future growth of that company is going to be funded and you need to be obviously very realistic about it.

[00:32:50] Kyle Grieve: Some businesses can still offer upside, even if shares become diluted. I wouldn’t say it’s very often, but opportunities do exist for people out there looking close enough, but you know, if you have to give preference, I would say internal funding is going to be your best bet and then go, bank funding after that.

[00:33:09] Kyle Grieve: I didn’t talk about here, but you know, some businesses have really high returns on invested capital and those types of businesses are the types of businesses Probably do want funding past what’s internally generated so that they can continue making more and more profits. So, I like a lot of serial acquirers and part of the allure of serial acquirers that they, they get this larger growth runway because they can purchase other companies.

[00:33:32] Kyle Grieve: And, sometimes they have more ideas to buy other companies and they have cash on their balance sheet and therefore they will borrow money from banks to help increase their returns. So the next point here is management open about mistakes and failures, or do they try to sidestep them? So I absolutely love this point.

[00:33:49] Kyle Grieve: It reminds me of a passage from Poor Charlie’s Almanac. So Charlie says, I don’t want to think we have any way of learning or behaving so you won’t make a lot of mistakes. I’m just saying that you can learn to make fewer mistakes than other people. And how you fix your mistakes faster when you do make them.

[00:34:06] Kyle Grieve: But there’s no way that you can live an adequate life without making many mistakes. Part of what you must learn is how to handle mistakes and new facts that change the odds. Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much loved hand. So you want management teams that are honest with themselves and the shareholders they work for, like Charlie was for Berkshire for so many years.

[00:34:28] Kyle Grieve: Managers who constantly try to sugarcoat things are not what you should be searching for or settling with. I would prefer a manager who can admit past mistakes and openly discuss what they learned and how they will proceed going forward. It’s a rare trait to find, but these managers definitely do exist.

[00:34:43] Kyle Grieve: The main reason this is so important is that you want honest managers. If they’re honest about the things that are hard to talk about, you can assume they’ll also be honest about the things that are easy to talk about as well. And those are the types of managers that Philip Fisher wanted to be partnered with.

[00:34:57] Kyle Grieve: And same with me, I think that’s the same type of partners that Warren Buffett wanted as well. So next section of the book here that I want to discuss is Fisher’s points on conservative investing. He points out two aspects of conservatism. One is a conservative investment, which just means that an investment can maintain purchasing power at minimum risk.

[00:35:20] Kyle Grieve: The second is the act of conservative investing. Which is just having a great understanding of a conservative investment and being able to systematically discern the degree of risk in conservative investments. The interesting point here is that Fisher spends a large part of his book talking about growth type investments, then spends more time talking about conservatism.

[00:35:41] Kyle Grieve: It seems at odds, but don’t worry, he ties it in very nicely here. If the objective is conserving one’s funds, the goal is safety. Why have we been talking about growth and the development of new and additional product lines? Why isn’t it enough to maintain a business at its existing size and level of profits without running all the risks that occur when new endeavors are started?

[00:36:02] Kyle Grieve: When we come to a discussion of the influence of inflation on investments, other reasons for the importance of growth will present themselves. But fundamentally, it should never be forgotten that in a world where change is occurring at a faster and faster pace, nothing long remains the same. It is impossible to stand still.

[00:36:20] Kyle Grieve: A company will either grow or shrink. A strong offense is the best defense. A conservative investment will have three vital aspects. One, the company must have a degree of paranoia towards advancing technologies and staying ahead of product offerings from competitors to businesses must have a great working environment for all employees.

[00:36:41] Kyle Grieve: And three, management must be disciplined in sustaining their growth initiatives. Those primary point is that you want a business managed by a team that displays tangible changes very, very well. You will not be making conservative investment. If a manager constantly touts the new initiatives they’ve implemented while showing nothing meaningful in the financial statements or in the business’s fundamentals.

[00:37:04] Kyle Grieve: To me, this just screams of management with a high degree of ability to execute initiatives. You can analyze this by looking at annual reports from a few years ago. And noting any initiatives that they’ve implemented, fast forward a few years and note if they still see the fruits of those same initiatives, or have they completely swept them under the floor because they were failures.

[00:37:23] Kyle Grieve: The third dimension of a conservative investment is the presence of a moat, which I already covered in quite a bit of detail. A simple screening tool Fisher outlines is looking at a given industry’s profit margins. You only really need to see a two, maybe 3 percent edge for one business to be ahead of the competition and have some sort of moat present.

[00:37:42] Kyle Grieve: The fourth dimension of a conservative investment relates to the price you pay for that investment. Fisher echoes Benjamin Graham pretty well, saying that the price is a subjective appraisal. It’s important to remember that the market as a whole can be incorrect in its appraisal of a business. Now, Fisher’s advice to investors here is excellent.

[00:37:59] Kyle Grieve: The conservative investor must be aware of the nature of the current financial community appraisal of any industry in which he is interested. He should be constantly probing to see whether the appraisal is significantly more or less favorable than the fundamentals warrant. Now, if you’ve been listening to TIP episodes for a while, you know that we are all big fans of quality on the show.

[00:38:20] Kyle Grieve: But quality is a double edged sword. Companies that are very clearly high quality businesses tend to trade at a premium most of the time. Many value investors skip these investments entirely for fear that overpaying will lead to losses in an investment. But Fisher has a simple counter argument he talks about.

[00:38:37] Kyle Grieve: The further out you can project earnings growth, the higher a multiple you can pay and still make an acceptable return on your investment. The hard part of investing is nailing down a quality business and holding it for as long as that quality remains high. This has proven to be a very challenging pursuit for many investors.

[00:38:54] Kyle Grieve: Another problem that can arise from high quality businesses is that investors can get excited about an idea and pile into the name, further increasing the share price. There is always a possibility that the share price has a multiple that’s very, very high. And when you buy it, that multiple goes down never to reach that high again.

[00:39:12] Kyle Grieve: So in that case, buying even a quality business is probably a mistake unless you’re planning on holding it for a very, very long period of time. Now, one method to combat this is to look at historical multiples and use a baseline during non-euphoric times as your base rate. Sure, you may miss businesses like Costco, but you’ll also avoid a lot of hidden risks.

[00:39:32] Kyle Grieve: Fisher also notes that the true test of whether a stock is currently cheap or expensive is not based on its current stock price. What determines evaluation is whether the company’s fundamentals are more or less favorable than the current financial community’s appraisal of that stock. This concept is not very well understood by investors, but it definitely should be.

[00:39:52] Kyle Grieve: If a company consistently improves its fundamentals year in and year out, you will observe that the stock price fluctuates more than the fundamentals do. This means you must be prepared to focus on the right thing, the fundamentals, and most importantly, ignore the wrong thing, the stock price. So Pulak Prasad in his brilliant book, What I Learned About Investing from Darwin, did a wonderful job discussing this concept called punctuated equilibrium.

[00:40:16] Kyle Grieve: This is a concept where businesses don’t tend to change all that much and tend to spend most of their time being static. But the stock price is not static. One of the major mistakes investors make is to attribute stock price fluctuation to business fluctuation. Prasad pointed out that is not the right decision, as you’ll end up selling many great businesses at high prices that can continue climbing for many years into the future.

[00:40:39] Kyle Grieve: The way to take advantage of business punctuation is when the market mistakes business punctuation and price fluctuations. This is where the price is being punished, but the business remains static or is even improving. In this case, buying is the correct decision. So the last part of this book that I’d like to discuss is Fisher’s investing philosophy.

[00:40:59] Kyle Grieve: I’d like to discuss its origin, lessons from his life experiences, and how it has matured. Fisher’s first foray into creating his philosophy was in 1928. At this time, he was attending Stanford University’s Graduate School of Business. One of his professors instilled some great rules into him during his education here.

[00:41:16] Kyle Grieve: For instance, he was taught to never invest in a business where you could not speak to management. During Fisher’s chats with management, He was taught to learn about the management team, strength and weaknesses. Phil Fisher had many back and forth with his professor as he drove him to many of these meetings with management.

[00:41:33] Kyle Grieve: And he said that these conversations were one of the most valuable experiences that he ever had as an investor. Another important lesson he learned from his experience was the importance of sales to a business. So a healthy business must have the right sales to flourish as an investment. If a business has a brilliant inventor or an extremely efficient manufacturing process, but no ability to actually sell its products, then the business is not worth investing in.

[00:41:59] Kyle Grieve: Returning to Fisher’s 15 point checklist, you can see how he embedded that into it. He wanted to know that management could not only continue innovating and bringing new products to the market, but also that they had the sales team set up properly so that the product would have exposure to the right market.

[00:42:14] Kyle Grieve: Now, this seems pretty intuitive to me, but perhaps spending more time learning about the sales processes in businesses would be beneficial to the investor analysis process. After graduating, Fisher took a job at a local bank, but it was not a good fit for him. Quote, the work I was assigned to do was extremely simple.

[00:42:31] Kyle Grieve: In my opinion, it was also intellectually dishonest. The investment arm of the bank was chiefly engaged in selling high interest rate, new issues of bonds on which they made quite sizable commissions as part of underwriting syndicates. No attempt was made to evaluate the quality of these bonds or any stocks they sold, but rather in the day of a seller’s market, they gratefully accepted any part of a syndicate offered them by their New York associates or by large investment banking houses.

[00:42:57] Kyle Grieve: Unquote. So as you can see here, Fisher’s opinion of security analysis was pretty good. Pretty low during this period of time. While he was at the bank, he realized how poorly done analysis really was. So he talked about how an analyst would just look up a company on Moody’s or standard statistics. Then someone like Phillip or in his position was zero knowledge of the business would then paraphrase the wording of the information into their own report.

[00:43:22] Kyle Grieve: Philip was never told to analyze the business any further than this very, very surface layer of work. This is pretty shocking to me, but I guess not really that surprising. The late twenties were a time of incredible speculation. So many of these banks were more interested in just collecting fat fees as efficiently as possible, rather than actually enriching their clients.

[00:43:40] Kyle Grieve: And the sad thing is, is that we still see the same thing today. So whether you invest yourself or have someone else to do it, ensure you don’t copy this blueprint above for investing. Do your work and come to your own conclusions. If someone else manages your money, you have every right to ask them about what they are investing your money into.

[00:43:57] Kyle Grieve: If they can’t supply a coherent answer to why they have your money invested in a specific stock, then you probably don’t want them managing your money in the first place. So back to Philip Fisher. As 1929 rolled around, Philip thought the market was overpriced and due for a major bear market. But the powers of greed set in, and Philip attempted to find cheap stocks that could still go up in price, even in a bubble like market.

[00:44:19] Kyle Grieve: So what he did was he divided the money that he had saved from previous work into three stocks that he felt were undervalued. But as the depression deepened, Philip unfortunately paid a very steep price for an important lesson. His initial investment shriveled to a tiny percentage of the original investment.

[00:44:35] Kyle Grieve: He realized that the shares had been cheap for a reason, and unfortunately the depression was not helping with any re rating. So this was the basis for his emphasis on buying growing businesses. Fisher wrote, I began realizing that all the then current Wall Street opinion to the contrary, what really counts in determining whether a stock is cheap or overpriced is not its ratio to the current year’s earnings.

[00:44:58] Kyle Grieve: But it’s ratio to the earnings a few years ahead. If I could build up in myself the ability to determine within fairly broad limits what those earnings might be in a few years from now, I would have unlocked the key both to avoiding losses and to making magnificent profits. Now this is a wonderful lesson that really fits with Charlie Munger’s mantra of buying wonderful businesses at a fair price over a fair business at a wonderful price.

[00:45:22] Kyle Grieve: I think it’s a great mental model for thinking about business prices. Many cheap businesses are rightfully cheap and can always get cheaper in the future. And many expensive businesses are rightfully expensive and can get even pricier in the future. The most important part of this, according to Fisher, was to nail down the likelihood of a business continuing to grow in the future.

[00:45:42] Kyle Grieve: If you know the business will continue to grow, especially for multiple years in the future, you can justify paying a higher price. But you must be certain that this will happen. I think this is why Warren Buffett places such a large emphasis on certainty during his analytical process. If he lacks the certainty required to understand whether profits will be higher in the future, he’ll simply throw the business in the too hard pile and move on to something else.

[00:46:04] Kyle Grieve: I think this is an intelligent way to invest and can definitely keep you away from making many risky investments. As Phillips continued evolving, his focus started to increase on management quality rather than just the quality of the underlying business. Fisher used the term business ability to discuss what made an excellent management team.

[00:46:23] Kyle Grieve: He broke down business ability into two skill types. 1. Handling day to day operations above average efficiency. 2. The ability to look ahead and make long range plans while managing risk. Fisher points out that many businesses have one of these qualities, but that it’s very rare for a business to have both of them.

[00:46:42] Kyle Grieve: He also points out that for real success, both of them are necessary. But just reading these two points makes me think a lot about Copart, which is a business that I mentioned previously. So Willis Johnson was always innovating and striving to increase efficiencies in Copart. And he also implemented long term goals to improve the business over the long term.

[00:47:01] Kyle Grieve: A great example of this was in the early days of the internet. So in 1996, Willis Johnson’s son in law, the former CEO and current chairman of Copart, Jay Adair, had a brilliant idea of improving Copart using the internet. So at this time, Copart had a master list of vehicles each day, and this list was often 8, 000 pages long.

[00:47:20] Kyle Grieve: So leveraging the internet would instantly increase efficiency by saving on paper and improving their ability to sort through their inventory at a much faster rate. But Jay went even further, he observed that there were reps for customers placing bids on cars that their clients wanted for 100, they were clearing 2, 000 plus per day using this strategy.

[00:47:39] Kyle Grieve: So Jay realized he wanted a piece of this action and so he helped create Copart’s online bidding system. This system was value creative to both Copart and its customers. So for only a 35 fee, you could bid on a car from the comfort of your own home. So after employing this strategy, Copart had a million dollars in sales in the first quarter after.

[00:48:00] Kyle Grieve: So here you can see how Jade Air increased Copart’s efficiency, which then reduced costs. Then he leveraged the internet to create long term advantages for Copart at low risk. And in case you’re wondering, the system has evolved since then and is still a big part of Copart’s business model today in 2024.

[00:48:16] Kyle Grieve: If you want to learn more about the business of Copart and its founder, my co-host Clay has discussed the stock of Copart on TIP 549 and he’s discussed the autobiography of Copart’s co-founder Willis Johnson on TIP 601. So back to Philip Fisher in management, Fisher points out that management integrity is vitally important.

[00:48:34] Kyle Grieve: Quote, the owners and managers of a business are always closer to that business’s affairs Then are the stockholders. The managers do not have a genuine sense of trusteeship for the stockholders. Sooner or later, the stockholders may fail to receive a significant part of what is justly due to them.

[00:48:50] Kyle Grieve: Managers preoccupied by their own personal interest are not likely to develop an enthusiastic team of loyal people around them. Something that is an absolute must. If a business is to grow to a size that one or two people can no longer control. Now this is such a powerful point, and it’s why it’s important that management own shares in a business and tangibly feel both the upside and downside of their decision making.

[00:49:15] Kyle Grieve: When insiders have no shares, their compensation is entirely tied to their salary and incentives. But if they own shares, then they are compensated to continue improving the fundamentals of the business. Which will also increase their wealth as the share price increases. Fisher had some excellent insights in Motorola that remind me a lot of Bill Miller’s concept of descriptions.

[00:49:36] Kyle Grieve: So Bill Miller thinks you must use proper descriptions when looking at a business. If you use the consensus description, you’ll often miss out on a lot of potential. Amazon is Bill’s greatest example, but let’s look at Motorola and Philip Fisher a little more. So in 1955, Fisher purchased shares in Motorola.

[00:49:52] Kyle Grieve: At that time, Motorola was seen as just another television and radio producer. However, through the scuttlebutt that Fisher had done, he realized that Motorola had some very intriguing products in development. Since Motorola was so dominant in mobile communications, it seemed likely that they could leverage that into additional growth levers into the future.

[00:50:09] Kyle Grieve: So they started in the semiconductor industry by acquiring the services of a very intelligent person named Dr. Daniel Noble. Philip thought that Motorola could compete with giants in the industry like General Electric, RCA, and Westinghouse in the semiconductor industry. He was criticized for this move as a speculative play.

[00:50:27] Kyle Grieve: And the immediate results didn’t pan out as shares were down 5 10%. initial purchase price, but then something interesting happened. The semiconductor industry started gaining in popularity. Side note, it’s funny how history doesn’t repeat itself, but it often rhymes. Now, I couldn’t find the stock price performance from 1955 to 1958.

[00:50:45] Kyle Grieve: But Fisher said that there was an insurance company he worked with that also owned shares in Motorola. During that three year time period, Motorola outperformed every stock in their portfolio. So I can only assume that it did reasonably well. Another excellent point of emphasis that I observed in my notes of this book is being self-aware of complacency or laxness.

[00:51:05] Kyle Grieve: Fisher did very well with his picks from 1954 to 1969 and many of his positions beat the market as a whole. But he paid special attention to his mistakes regarding complacency and laxness. This lesson taught him not to place too much importance on the opinions of a few individuals. Let’s go over an example.

[00:51:22] Kyle Grieve: In the 1960s, Phillips wanted to gain exposure to the pharmaceuticals industry. He spoke to a medical specialist as part of his scuttlebutt. He learned this individual was very excited about a new family of drugs that were going to be manufactured by one specific business. Continuing with his due diligence, he spoke to a few other investment professionals and business officers, but his mistake was, unfortunately, I did not pursue my standard checks either with other drug companies or with other knowledgeable people in this particular specialty to see if they might have contrary evidence to offer.

[00:51:52] Kyle Grieve: Regretfully, I subsequently learned none of the proponents had made a thorough investigation either. So Fisher ended up making the 50 percent on it. He said after the loss, he could have prevented himself from buying the business if he’d done a better job doing his due diligence. He found that management had some weaknesses.

[00:52:07] Kyle Grieve: He felt he could have identified with them or with a more thorough investigation of the business. So another point of complacency that Fisher makes is not keeping up with the events of a business at all levels of that business. So Fisher owned a business called central California electronics. Now this business was going through a decline and Fisher thought the decline was just a temporary headwind.

[00:52:29] Kyle Grieve: But he was blinded by the success that this investment had provided for him up until this headwind came up. And his main mistake that he admitted was spending too much time listening to top level management while not putting enough work in at lower levels and ultimately with customers. Luckily, he noticed this error early and was able to invest much of the winnings from this company into his investment into Motorola that I just discussed.

[00:52:53] Kyle Grieve: So, to conclude this book, Philip discusses eight key points that envelop his investing philosophy. Now, they’re outstanding, so I want to briefly list them here. One, invest in businesses with disciplined and profitable growth plans that have competitive advantages. Two, buy companies when they’re undervalued due to weak market conditions or market misperception.

[00:53:13] Kyle Grieve: Three, hold the stock until there are significant fundamental changes for the worse or the business cannot outpace the economy. Also, self-management is unable to adapt to future growth initiatives. 4. Focus on capital gains over dividends. The best opportunities rarely pay dividends. 5. Accept that you will make mistakes in your investing lifetime, but make sure you learn from them and avoid making them again.

[00:53:37] Kyle Grieve: 6. There are very few outstanding companies and even fewer great investment opportunities. So concentration is an intelligent decision. Keep holdings in the 10 12 range. 7. You should form your own opinions about a business. Whether they are contrary to popular belief or in line with popular belief, it does not matter if you are correct in your judgment.

[00:53:56] Kyle Grieve: 8. Success in investing requires hard work, intelligence, and honesty. Now let’s touch on how Philip’s philosophy impacted Warren Buffett. The book was first released in 1957, and the Buffett partnership started in the same year. But Buffett was not following Fisher’s tenets too closely at that time. He was laser focused on the lessons he learned from Benjamin Graham.

[00:54:16] Kyle Grieve: But as time went on, he met Charlie Munger, he began scaling up pretty fast, and Warren’s philosophy changed toward the teachings of Philip Fisher. Robert Hagstrom believes that today Warren Buffett is 50 50 between Benjamin Graham and Philip Fisher. I tend to agree with this notion as you can see many of Buffett’s investing philosophies are aligned with the teachings outlined in this book.

[00:54:36] Kyle Grieve: Much has been said about how Warren Buffett had to evolve his investing philosophy away from cigar butts and towards quality. And I think this book was a perfect launching point for Warren to improve his already impressive investing strategy. To conclude this episode, I’d like to share some of my primary takeaways, which I know will continue to evolve with my own investing philosophy.

[00:54:54] Kyle Grieve: The majority of my lessons are on the points on Scuttlebutt. As I’ve read this book and interacted more and more with other fund managers and full time personal investors, I’ve observed the great lengths that people go through to truly grasp and understand a business. While I think I was on the right path, I’ve learned more and more about how to amplify my knowledge base.

[00:55:12] Kyle Grieve: This book does a beautiful job of explaining why and how to improve your Scuttlebutt techniques. While institutional investors will always have an advantage in their network to acquire information, I think that the average investor can still take a lot of lessons from this book and apply them to their own investing framework to improve their knowledge of a business, increase their circle competence and reveal any shortcomings in their investing thesis.

[00:55:35] Kyle Grieve: So a couple of things that I’ll start doubling down on include talking with lower level employees inside of a business. LinkedIn, as previously mentioned, seems to be the best way to do this. It can be hard to find people who will chat openly, but if you’re persistent enough and ask nicely, people are generally open to chatting.

[00:55:52] Kyle Grieve: So I also want to work on having more ongoing check ins with upper level management. I already have a few relationships with managers of some of the businesses that I own. I can use these to check in once or twice a year and get a better grasp of how the business is going from the C suite level. And then I also want to improve on my industry due diligence.

[00:56:09] Kyle Grieve: This includes reaching out to customers and suppliers. Yes. So some of the case studies that Fisher shares in this book highlight, these can be invaluable sources of information for identifying hidden upside and potential downsides inside of a business. This is the due diligence that might be the most important and is also accessible to anyone willing to put in the work.

[00:56:29] Kyle Grieve: Here’s a great case study that illustrates this point. So there was a trader named Jeffrey Newman, who was profiled in the latest edition of Unknown Market Wizards. He was asked what some of his most profitable trades were in the last three years. Keep in mind, this question was posed in 2022, quote, I watched the news for a living.

[00:56:45] Kyle Grieve: It all began when I saw the initial reports of a coronavirus outbreak in China. I went to a CVS to buy some masks and I couldn’t find any. When I asked for them, the clerk laughed at me and said, we don’t have any and we’re not going to get any. Okay. Then I went to a Walgreens, and they said, we might have them in a few months, but you can keep checking every day.

[00:57:01] Kyle Grieve: I had traded through Swine Flu and Bird Flu and was familiar with the type of marketplace these situations provided. I went home and bought a large stake in Alpha Pro Tech, a small cap mass maker. I smashed it. The stock went ballistic, shooting up from 4 to 40 in only 10 days. That trade started it all.

[00:57:19] Kyle Grieve: I’m no trader, and a PT is now of $5 and 56 cents as of June 24th, 2024. But the point still stands that you can find wonderful opportunities in the market if you’re curious and willing to ask questions to the right people, even if it, that just means asking a store clerk a question. If you find a product that you need or that you love flying off the shelves so fast that you can’t even buy it, that’s an honest signal that’s probably worth pursuing and seeing if there’s an investment opportunity.

[00:57:45] Kyle Grieve: But I think having ongoing touch points is very important. As Fisher mentioned, getting complacent with your winners can cause you to lose a lot of money. So whether your business is a winner or a loser or moving sideways, don’t get lazy. Keep up with all your businesses. Ask hard questions to people who can best answer them and keep reassessing. That’s it for today’s show. Thanks for joining me.

[00:58:05] Outro: Thank you for listening to TIP. Make sure to follow We Study Billionaires on your favorite podcast app and never miss out on episodes. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.