The Intelligent Investing Podcast

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Eric Schleien discusses value investing, rational investment analysis, and vital mental models.

Episodes

Monday May 16, 2022

#171: Rebuttal To Some Trupanion Hate $TRUP; Discussing the Toxicity Of Twitter $TWTR

Monday May 16, 2022

NEW PODCAST

Hey All! I’ve started a second show completely devoted to the field of Ontology which is another huge passion of mine. Please check out The Eric Scheien Podcast which is an ontological podcast where I break down distinctions of human consciousness as an access to enhancing performance.

Summary

I received this email last year about Trupanion and wanted to address some points made. The entire email is here:

Hi Eric,

I come in peace as a Chester County native who still very much prefers Wawa over Sheetz, despite living in Pittsburgh. You seemed very open to hearing counterpoints, as per your podcast on TRUP, so I wanted to give you some things to chew on.

You made two points (I'll summarize): 1) It is justifiable to exclude development expenses from IRR and 2) there are "no accounting shenanigans" going on.

I would love, then, to hear your thoughts on the following:

Let's first level set with the IRR methodology: the company allocates fixed expenses between Subscription and Other based on their relative revenue contributions. This includes a pro-rata allocation of G&A expenses.

So let's get into G&A expenses -- what's in there? Typical back office stuff, finance, accounting, etc. But also a couple million bucks of rental income related to subleasing of the company HQ. Per their 2019 10-K: "The change was primarily due to a $3.1 million increase in compensation expenses, a $0.8 million increase in professional service fees, and a $1.5 million increase in depreciation expense mainly due to owning our home office building since August 2018, partially offset by a total of $2.6 million in savings from additional lease income and less rental expense."

The rental income has the effect of reducing reported G&A (i.e. it's netted against expenses). So my first question for you is as follows: if you firmly believe development expenses that aren't related to acquiring new pets are justifiably excluded from IRR calculations, how are you comfortable with several million dollars of sublease income that's clearly not related to acquiring subscription pets benefitting IRR?

Next up is their pet-food VIE. Also from the 10-K: The Company has also entered into a series of agreements to provide ancillary services to the variable interest entity at cost. The Company provided $1.2 million and $1.4 million of these services for the years ended December 31, 2020 and 2019, respectively, which were recorded against its operating expenses.

So TRUP provides back office support to the VIE and reduces its reported opex to account for the compensation for providing the services.

So the next question is the same as the first: Would you bucket this in line with "development expenses" as being rightly excluded from IRR, or are you OK with the company getting the tailwind from the expense reduction?

Now here's where the situation becomes a bit more nefarious. The VIE has received a total of $9.5 million of funding from TRUP, including $7.0MM of preferred capital and $2.5MM from a line of credit. Think for a minute about what's going on here: the company pushed $9.5MM of cash down to another legal entity, and now reduces its reported OpEx for services provided to the VIE, with the payments being made with money TRUP used to finance the VIE. Money coming out of one pocket and right into the other.

Third question: Do you think this is an accounting shenanigan?

Lastly, management knows PAC is getting out of hand and pulled a fast one in the first quarter to make it look like they've got things under control. Aren't you the slightest bit curious how they're going to hold PAC at $280 for the balance of this year in an increasingly competitive environment?

Management casually slipped in the following comment during the earnings call: "We expect stock-based compensation to be around $6-$7 million per quarter for the remainder of the year." Coupled with the $8.4 million of SBC already booked in 1Q'21, TRUP is on track to recognize $28 million of SBC expense in 2021. Putting this figure into perspective, it is 3x higher than last year's $8.9 million of total recognized SBC expense. Last year SBC expense was 1.8% of revenue; this year it will be 4.1%.

What does SBC have to do with PAC and IRR?

Well, for the purposes of calculating PAC (a key input into the IRR calculation), management excludes SBC because it's non-cash. By upping the portion paid in the form of equity, management is artificially reducing the level of PAC incorporated in their IRR calculation. in 1Q'21, fully-loaded PAC (including SBC) was $328/pet, representing 22.4% y/y growth. SBC embedded in Sales and Marketing was $40/pet -- leaps and bounds above historical levels ($20/pet). See the charts at the bottom of the email. Had SBC been more in-line with historical levels ($20/pet), PAC (for the purposes of the company's IRR calculation) would have been ~$310...much closer to the full year figure I was expecting.

This is all a long winded way of saying, if you were to run the company's IRR calc with PAC of $315 or above, there is absolutely no way they would be within the boundaries of their self-imposed 30-40% target range. The only reason they'll print numbers within range this year is a result of their increased use of SBC in compensating their employees.

The table below illustrates Restricted Stock grants (not expense, but grants) since 1Q'19. The grants in the most recent quarter -- $66 million! -- jump off of the page and explain why SBC will be elevated in the quarters to come. But don't just take my word for it. From what I can tell, we both respect Buffett a lot, and here's what he's got to say on the topic: "I have no objection to the granting of options. Companies should use whatever form of compensation best motivates employees -- whether this be cash bonuses, trips to Hawaii, restricted stock grants or stock options. But aside from options, every other item of value given to employees is recorded as an expense."

When it comes to SBC, RSUs are a functional cash equivalent, so there is no legitimate justification to exclude the related expense from any measure of profitability -- GAAP or otherwise.

Perhaps using RSUs makes sense for the time being given the extreme overvaluation of TRUP. Management can handsomely compensate employees and gloss over the dilutive impact on the company's financials. But what happens when shares are back at $30, but territory partners are expecting their compensation to remain flat in nominal terms? Shareholders will either be 1) massively diluted or 2) the company would have to lean more heavily on cash compensation. The latter of the two options is a functional non-starter at the current juncture given the company's persistently negative free cash flow (another topic the bulls don't understand, but I'll let sleeping dogs lie on this one).

Last question: Do you believe SBC is a true expense? If it is, should the company be including it in its IRR calculation?

Management updated guidance, and frankly, I think the financial outlook is worse than I was expecting. "Adjusted Operating Income" -- which is ex. SBC, D&A, and Pet Acquisition -- is forecast at $75MM. PAC -- ex. SBC -- is forecast at $66MM. That leaves us to $9MM. "Development expense" will be $4MM (at the mid), SBC is $28MM, D&A will be $12MM, resulting in a pre-tax net loss of $35MM. This is larger than the company's cumulative net loss for the past six years combined!

I know this is a battleground stock and don't expect everyone to come around. But I also think: 1) there's only one set of correct answers to the questions I've laid out above, 2) none of the afforementioned points are "dumb", and 3) management is using sleight of hand to paint a picture of the company that is out of step with reality. As someone who puts a lot of value in associating with the right people, I certainly don't appreciate the games / shenanigans that Daryl and team are pulling.

	$MM
Adjusted Operating Income	75
- PAC	(66)
- Development expense	(4)
- SBC	(28)
- D&A	(12)
Pre-tax Income	(35)

HELP OUT THE PODCAST

If you like The Intelligent Investing Podcast, please consider leaving a rating and review on Apple Podcasts. It takes less than 30 seconds to do and makes a huge difference! You can also join the Facebook page!

You can subscribe to the podcast on the following platforms:

GET IN TOUCH WITH ERIC SCHLEIEN

Email: IntelligentInvesting@gmail.com

Disclosure: Eric Schleien and some SMA clients of Eric Schleien through GSCM own shares of TRUP. Nothing here is investment advice. Do your own due diligence.

Tuesday Dec 07, 2021

#168: Discussing Uber‘s Business Model - Vitaliy Katsenelson

Tuesday Dec 07, 2021

Summary

In this episode, I sit down with Vitaliy Katsenelson of IMA to discuss Uber's business model. We ended up chatting for about an hour and went pretty deep into the weeds around ride-sharing, Uber, and also what the future holds for the industry both in the United States and globally.

Show Links

More About Vitaliy Katsenelson

Vitaliy N. Katsenelson, CFA, is CEO at Investment Management Associates in Denver, Colo. He is the author of Active Value Investing (Wiley, 2007) and the The Little Book of Sideways Markets (Wiley, December 2010). He runs the blog ContrarianEdge.com. He writes monthly for Institutional Investor.

More About Eric Schleien

To learn more about me, Eric Schleien, check out my personal website and business website. You can also reach out to me on Twitter, Instagram, and LinkedIn.

If you'd like to read my book, you can find it on Amazon. Reviews are appreciated.

New Podcast

Hey All! I’ve started a second show completely devoted to the field of Ontology which is another huge passion of mine. Please check out The Eric Schleien Podcast which is an ontological podcast where I break down distinctions of human consciousness as an access to enhancing performance. To learn more about Eric's work, check out his ontological coaching firm, Transformational Leadership Associates.

Help Out The Podcast

If you like The Intelligent Investing Podcast, please consider leaving a rating and review on Apple Podcasts. It takes less than 30 seconds to do and makes a huge difference! You can also join the Facebook page!

You can subscribe to the podcast on the following platforms:

Contact Eric Schleien

Email: IntelligentInvesting@gmail.com

Tuesday Sep 21, 2021

#163: Eric Schleien Hosts Finance Podcast Week

Tuesday Sep 21, 2021

Eric Schleien hosts the September Roundtable for Finance Podcast Week. Join Eric Schleien, host of the Intelligent Investing Podcast, with Andrew Sather and Jason Rivera for a jam packed hour long finance roundtable.

Eric Schleien Discusses Real Estate Stocks

In this episode, Eric Schleien sits down with Andrew Sather and Jason Rivera to discuss two real estate stocks.

Laaco Ltd (LAACZ), which owns the Los Angeles Athletic Club and has a Self-Storage Business.
Cedar Realty Trust (CDR), which owns grocery anchored retail outlets across the United States.

Eric Schleien believes that both of these are cheap real estate stocks that would be some of the best picks for 2021. Both of these stocks are special situations as it is likely that both of these will be selling core assets for a higher price than the current market value. In Cedar’s case, they may sell the entire company. With Laaco, they may sell their self-storage business at what would almost certainly be a higher price than the current market price if they were to get a fair valuation on the assets.

Eric Schleien Discusses Modern Value Investing

One of the things that Eric points out during the roundtable is that modern GAAP accounting isn’t always appropriate for companies such as Amazon (AMZN) or Trupanion (TRUP) to show true value of the business. For example, Amazon’s R&D expense he believes is an asset even though it gets run through the income statement as an expense.

To learn more about Eric Schleien, check out his personal website and business website. You can also reach out to him on Twitter, Instagram, and LinkedIn.

If you'd like to read his book, you can find it on Amazon.

Jason Rivera Discusses Altria Stock

During the episode Jason Rivera discusses Altria (MO) as a potential value investment due to the stability of the business mixed with a high dividend yield. Jason believes that Altria is a better inflation hedge than buying TIPS.

To learn more about Jason Rivera, check out his website: Value Investing Journey

Andrew Sather Discusses Defense Contractors

Andrew believes that defense contractors offer good value in this market. As a value investor, he is always looking for sectors and companies that are being mispriced by the market for various reasons.

To learn more about Andrew Sather, check out his website: Investing For Beginners

Friday Jun 11, 2021

#155: $WFC / $BAC / $JPM; Analyzing Bank Stocks & The Banking Industry - Andrew Sather

Friday Jun 11, 2021

New Podcast

Podbean

This podcast is sponsored by Podbean. Podbean is probably the easiest way to create your own podcast. We use Podbean to host the Intelligent Investing Podcast and my new podcast, The Eric Schleien Podcast. Download the free Podbean Podcast App, to start, record, and publish your very own podcast in minutes. Podbean provides everything you need to run your podcast and you can record and publish episodes directly from the app on your phone. Check it out!

TIKR.COM

This episode is brought to you by TIKR.com. This is a product I personally use for researching stocks at my firm. TIKR.com is focused on bringing institutional-quality investment research tools to individual investors. TIKR.com is powered by S&P Global CapitalIQ and has coverage of 50k+ stocks globally with financials, estimates, valuation metrics, ownership, transcripts, news, filings, and more. Join TIKR.com‘s free beta today with tikr.com/intelligent

NET NET HUNTER

This episode is sponsored by Net Net Hunter. If you’re interested in finding high-quality stocks trading at fractions of liquidation value – this research service is for you. I personally use this service at my firm to help me research tiny and obscure net-net stocks all around the world. Using Net Net Hunter comes out to way less money than hiring an analyst to do the exact same thing manually. It’s a service I love and I am proud to be able to offer this service to my listeners. If this is something you’re interested in, please click here.

Summary

On today's episode, I sit down with Andrew Sather who is a self-taught investor since 2012. He specializes in identifying value traps and avoiding stock market bankruptcies. You can also listen to his podcast - Investing For Beginners.

Show Notes

[3:19] Bank Of America $BAC

[3:39] Just a crazy amount of capital that's flowing into these banks...

[6:30] Lending to the fed...

[7:51] Fintech

[8:50] $BAC and $WFC still attracting new deposits in a low interest rate environment

[10:42] Federal Reserve Bank Requirements

[12:27] I'm bullish on the industry in general...

[12:48] Bank Valuation Metrics

[16:45] Building an economic moat through customer service in banking

Resources

Seeking Alpha Articles by Andrew Sather
E-Investing for Beginners

HELP OUT THE PODCAST

You can subscribe to the podcast on the following platforms:

GET IN TOUCH WITH ERIC SCHLEIEN

Email: IntelligentInvesting@gmail.com

Monday May 24, 2021

#150: How To Invest In Outer Space...seriously! - Robert Jacobson

Monday May 24, 2021

This episode is also brought to you by TIKR.com. This is a product I personally use for researching stocks at my firm. TIKR.com is focused on bringing institutional-quality investment research tools to individual investors. TIKR.com is powered by S&P Global CapitalIQ and has coverage of 50k+ stocks globally with financials, estimates, valuation metrics, ownership, transcripts, news, filings, and more. Join TIKR.com's free beta today with tikr.com/intelligent

This episode sponsored by Net Net Hunter. If you're interested in finding high-quality stocks trading at fractions of liquidation value - this research service is for you. I personally use this service at my firm to help me research tiny and obscure net-net stocks all around the world. Using Net Net Hunter comes out to way less money than hiring an analyst to do the exact same thing manually. It's a service I love and I am proud to be able to offer this service to my listeners. If this is something you're interested in, please click here.

Summary

Join Eric Schleien with today's interview guest, Robert Jacobson, as they talk everything about entrepreneurship, technology advancements, and how you can invest in outer space. Robert admits he is no rocket scientist, but as you join us in this discussion, listen as he tells us the many non-hyperbolic real things that are developing right above us.

In this episode, Robert shares the different business models on space and technology exploration emerging in the industry today. From businesses leveraging the advantages of multiple small satellites, providing internet to remote areas, ultramodern telescopic devices, advanced GPS tracking, and even the fusion of VR technology and floatation tanks.

As you remain tuned in, find out more as Robert, later on, speaks of his book that gives us a great introduction to how the industry that will help change humanity is affecting us economically, socially, and more.

About Robert Jacobson

Robert is a hyper-connector, advisor, entrepreneur specializing in the emerging New Space economy.

Robert Jacobson is an entrepreneur and investor driven by a life-long passion for space. A born improviser, team builder, and dealmaker, Robert approaches business challenges with a flexible and creative mindset. With a talent for developing nuanced, boundary-defying solutions, he creates effective bridges between various enterprises and worlds of experience—from merging interests and subject matter to propelling humanity forward via space's myriad offerings.

Robert authored the book Space Is Open for Business on democratizing the New Space economy.

Robert's Website
Space Advisors
Twitter
Robert's Book; Space Is Open For Business: The Industry That Can Transform Humanity

Show Notes

[00:25] What outer space is doing for us.
[03:14] The XPRIZE – Getting a human to space.
[07:55] "It wasn't going to be through NASA."
[10:18] The space advancements by 2020.
[15:10] -An audacious goal of backing up Earth's civilization.
[17:07] On Astrabotic and the project – Great Pause.
[18:39] Floatation tanks – The closing thing to walking on outer space.
[21:15] The opportunities for space ventures today.
[26:34] New business models through satellite advancements, etc.
[35:17] A book on the industry that can help transform humanity.

Resources

Space Is Open For Business Book by Robert C. Jacobson:
Propel X – Alternative investments
Space Angels – Your access to smart space investing
Syndicate 708 - Propelling the next generation of Deep Tech entrepreneurs
Starburst - The #1 Aerospace Accelerator

About Eric Schleien

Eric has been investing for 15 years and has been using breakthrough coaching methodologies for over a decade. Eric had the insight to combine proven coaching methodologies with shareholder activism techniques to create an entirely new model for shareholder activism that was more reliable and created greater sustainable results in a rapid period of time. On average, Tribal Leadership produces a 3-5x increase in profits of culturally troubled companies within an average of 24 months or less.

Eric currently resides in Philadelphia, PA.

Help Out The Podcast

You can subscribe to the podcast on the following platforms:

CONTACT ERIC SCHLEIEN

Email: intelligentInvesting@gmail.com

Tuesday May 11, 2021

#148: Discussing Trupanion (TRUP)...again! - Reaction To Steel City Capital Letter

Tuesday May 11, 2021

This episode is also sponsored by Net Net Hunter. If you're interested in finding high-quality stocks trading at fractions of liquidation value - this research service is for you. I personally use this service at my firm to help me research tiny and obscure net-net stocks all around the world. Using Net Net Hunter comes out to way less money than hiring an analyst to do the exact same thing manually. It's a service I love and I am proud to be able to offer this service to my listeners. If this is something you're interested in, please click here.

Summary

It's time again for another Trupanion (TRUP) episode as there's been another writeup on the company that completely misunderstands their business in my opinion. For my other episode on Trupanion where I made a rebuttal to Todd Wenning at Ensemble Capital which you can listen to here.

This is a rebuttal to the Steel City Capital letter which you can view on Seeking Alpha.

Show Notes

[3:28] The PAC spend is the output, NOT the input as Steel City Capital attempt to argue

[3:53] Growth inline with PAC spend

[5:26] Including development expenses in IRR doesn't make sense

[6:06] The proper way to look at Trupanion's subscription business IRR

[6:37] Doesn't make sense to include preloaded costs into IRR calculation

[7:24] How to look at "Other" Business

About Eric Schleien

Over the past decade, Eric has trained thousands of individuals, including board members of public companies as well as several Fortune 500 CEOs. Eric specializes in organizational culture and has become a leading authority on organizational culture in the investment industry. Eric has been investing for 15 years and has been using breakthrough coaching methodologies for over a decade. Eric had the insight to combine proven coaching methodologies with shareholder activism techniques to create an entirely new model for shareholder activism that was more reliable and created greater sustainable results in a rapid period of time. On average, Tribal Leadership produces a 3-5x increase in profits of culturally troubled companies within an average of 24 months or less. Eric currently resides in Philadelphia, PA.

Help Out The Podcast

CONTACT ERIC SCHLEIEN:

Email: intelligentInvesting@gmail.com

Tuesday Apr 27, 2021

#145: My Favorite Stock Idea for 2021, Why I Don't Short Stocks, and More: Q&A w/ Eric Schleien

Tuesday Apr 27, 2021

Join Eric Schleien in this Q&A format as he answers questions on short positions, investment strategies, destroying your own conclusions on business and investments, and so much more. When asked about the mistakes he's made with investments and what can be learned from them, Eric expounds on what he thinks is a rear-view mirror thinking and on how he managed to lose more money to areas of omission than commission.

Summary

While it's common for others to work on becoming large firms, Eric's unique gameplay is to stay boutique and manageable. For Eric, it's not necessarily rejecting growth. Instead, it's more about being able to hold control and balance on different elements. When you're running multiple large funds, it will reach a point where you start losing the competitive advantage by becoming too large, he explains.

In this episode, the group also brings up the relevance of Environmental and Social Trends in determining the long-term value of companies. Quoting from Brookfield Asset Management CEO Bruce Flatt, "It's not a good business to not be a good steward of the environment.", for Eric, if a business is taking steps to have an adaptable and inclusive culture – value is quickly elevated. Even though it's not the end-all-be-all, for Eric, when a business does good in proving its CSR, it helps contribute to building a competitive advantage and value in the long run.

Show Notes

[01:20] Podcasting is going to be bigger than radio; On Liberated Syndication/Libsyn (LSYN).
[06:26] How do you size your investments and know what to trim?
[10:38] The art form to portfolio management.
[14:00] On the threat inflation poses.
[19:50] The advantages of being a boutique firm.
[21:53] On not taking short positions.
[26:26] Has the pandemic changed investment strategies?
[28:22] Rear-view mirror thinking.
[34:05] How do you factor in ESTs on a business's long-term value?
[36:39] There's only so much you can control when you run large funds.
[42:06] When an investor insists on dividends…

Resources

Principles of Power - The Art & Wisdom of Badassery Book by Eric Schleien

About Eric Schleien

Eric currently resides in Philadelphia, PA.

Help Out The Podcast

You can subscribe to the podcast on the following platforms:

CONTACT ERIC SCHLEIEN

Email: intelligentInvesting@gmail.com

Monday Apr 19, 2021

#144:Value Investing In The Cannabis Industry, Trulieve, and Green Thumb Industries - Julian Lin

Monday Apr 19, 2021

Join Eric Schleien with today's interview guest, Julian Lin, as they discuss the different names in the country's cannabis industry and the stocks he entered and exited in light of the pandemic. For some of these companies, leaving the pandemic with so much debt and having to spend so much for redevelopment isn't going to be an excellent spot to have.

Summary

In this episode, Julian also talks about the presence of Canadian cannabis brands in American markets. Despite them being 'okay,' because they're the only names people can invest in when in America, the evaluations of these brands coming from across the border remain to sore insanely. Nonetheless, cannabis brands have challenges unique to them in general.

Julian acknowledges that when you look at these companies, they scream expensive. In reality, if cannabis is decriminalized and is not to pay a particular type of tax in the future anymore, their shares will trade at multiple folds in earnings. For Julian, the macro picture for cannabis is all promising in the next 2-4 years.

About Julian Lin

Julian Lin runs Best Of Breed, a research service uncovering high conviction ideas in the winners of tomorrow. He is ranked in the top 1% of all bloggers on Tipranks.

Website

Show Notes

[01:04] "A terrible time to own those stocks."
[02:52] How did Simon Property Group enter the pandemic?
[04:14] It's a problem with the cost of capital.
[07:27] The cannabis industry in the Biden administration.
[09:07] Cannabis in Canada.
[11:30] The business models of different cannabis brands.
[13:03] What cannabis companies are not allowed to do.
[15:54] GTI is a multi-state presence.
[17:11] The future for Cannabis.
[17:48] The primary catalyst for American cannabis stocks.

About Eric Schleien

Eric currently resides in Philadelphia, PA.

Help Out The Podcast

You can subscribe to the podcast on the following platforms:

CONTACT ERIC SCHLEIEN

Email: intelligentInvesting@gmail.com

Thursday Apr 15, 2021

#143: Game Stop, Robinhood and the Merrymen of Reddit - What actually happened?

Thursday Apr 15, 2021

The GameStop short took many by surprise and brought the world of short selling into the mainstream. Join us for this in-depth panel moderated by Eric Schleien of the Intelligent Investing Podcast with Jake McClure of The Personal Wealth Coach Podcast and Rick Bloom from Rick Bloom Talks Money on the nuances of what actually happened, and how all the pieces fit together.

Eric Schleien's Book

Thank you for supporting the podcast. My new book, Principles of Power, is now on Amazon. I would be incredibly grateful and humbled for a purchase with an honest review.

About Principles of Power

"Principles of Power can be related to as an advanced Coaching Handbook for Leaders.  If you are a leader, an aspiring leader, a coach, consultant, or program facilitator, this book is designed for you. The material is delivered inside of a modern leadership context of service and contribution.  Eric features many partnerships in Principles of Power. His inclusion of useful quotes from Warren Buffett, Charlie Munger, Werner Erhard, Nassim Taleb, Seth Godin, and many other leaders attests to the thinking and the research that went into the writing of this book.  It is now undeniable that the understanding and implementation of powerful Listening, authentic Relationship, and a recognizable Permission to Lead, are cardinal distinctions of effective leadership.  The word, ’cardinal’ has a Latin root and means ‘hinge’ – like a hinge on a gate. So, like a hinge, cardinal distinctions are connected to every nuance of leadership. You will see these distinctions in action in the background of Eric’s many leadership conversations.  Authentic Relationship, for example, is essential to the effectiveness and empowerment of the participants and the leader. If authentic Relationship is missing, any outcome or result devolves to the result of domination or force, and is not an outcome of effective leadership. Consider this: Leadership is granted by the permission of those being led. Take a moment and allow that to sink in.

The job of the leader is that of an environmentalist, providing the space for people to collaborate, flourish, and create. These two different activities, management and leadership are often commingled, especially in business schools and in the workplace. They are distinct and operate under different rules and measures. It’s like Checkers and Chess – Same game board, different games with different rules and outcomes. Disentangling and distinguishing the two arenas of activity grants power to both managers and leaders.  So, the fundamental exercise of listening for people’s greatness is in the background of every sentence in this book. And there is much more… Principles of Power is strongly influenced by the transformational work of Werner Erhard. Much of the author’s thinking is also grounded in the classic distinctions of Tribal Leadership and the thinking of Warren Buffett and his partner, Charlie Munger.  Those, plus Eric’s own extensive practical experience renders Principles of Power to be an extremely useful ‘go-to’ resource, filled with useful, implementable information, sprinkled liberally with memorable quotations from intelligent diverse sources – all apt and worth adding to YOUR leadership lexicon."

- John King, co-author of Tribal Leadership

Other Resources

About Eric Schleien

Over the past decade, Eric has trained thousands of individuals including board members of public companies and Fortune 500 CEOs. Eric specializes in organizational culture and has become a leading authority on organizational culture in the investment industry.

Eric has been featured in The Wall Street Journal, GuruFocus, and was featured in Warren Buffett’s Biography, “Of Permanent Value.” Eric is also a certified Tribal Leadership consultant with over a decade’s worth of experience in the field of transformational coaching. Since 2012, Eric has specialized in producing breakthroughs at the level of organization. He’s also the co-creator of the Udemy course, Leadership By Design. Eric also hosts The Intelligent Investing Podcast which is a business/value investing podcast.

Eric loves interviewing interesting people and has interviewed Warren Buffett’s son, Peter Buffett, Jimmy Fallon, and former adult film star, Bree Olson as well as over 100 interviews on his podcast.

Eric currently serves as the Chief Executive Officer of Granite State Capital Management, LLC and runs a real estate investment and consulting firm, Wyoming Warehousing & Safe Deposit Company.

About Jake McClure

Jake McClure has been working with his father and partner, Jeff in finance since January of 1991. In 2010 he completed business studies for his designation as Certified Investment Management Analyst® at The Wharton School, University of Pennsylvania. In 2007 In concert with Jeff, he founded an objective, fee-based fiduciary service in The Personal Wealth Coach, an SEC Registered Investment Advisory Firm.

Jake is married to Alissa, a cellist, and a world traveler. They have two children. Jake is also a successful artist, having been commissioned by the Austin Ballet’s BATS to create the 2011 annual Long Award, and has had showings of his artwork in many public places. Jake has also given musical business advice to several major recording labels and production companies. His passion lies in finding the links between economics, art, and music, then defining those links in the lives of his clients.

About Rick Bloom

Rick is a partner and co-founder of Bloom Advisors and the law firm of Bloom, Bloom & Associates. He is a licensed attorney, certified public accountant (CPA), and financial advisor. Additionally, Rick holds the Series 65 license.

Rick currently hosts the podcast "Rick Bloom Talks Money" and writes a weekly financial column in the Observer & Eccentric Newspapers. He served as host of the popular “Money Talk” radio show on WXYT-AM 1270 and the “Rick Bloom Show” on WDTK-AM 1400.

Rick was a featured writer of regular financial columns for the Detroit News and Oakland Press and also aired twice-daily business updates on the Michigan Radio Network. He has been recognized by a variety of esteemed financial publications and has been named a top financial advisor for several years. He has presented at conferences and given speeches to hundreds of business and civic organizations throughout his career and has made appearances on both radio and television. Rick is a member of the Fidelity Investment Financial Advisory Council.

Rick is an honors graduate of both Michigan State University and the University of Michigan Law School.

Help Out The Podcast

You can subscribe to the podcast on the following platforms:

CONTACT ERIC SCHLEIEN

Email: IntelligentInvesting@gmail.com

Monday Apr 12, 2021

#142: Andrew Sather on Warren Buffett's Cash Cows, Hedging the US Dollar, Residential Real Estate, Griffon (GFF), and Electronic Arts (EA)

Monday Apr 12, 2021

Join Eric Schleien with his guest Andrew Sather as they talk about Warren Buffett's Cash Cows, Hedging the US Dollar, Residential Real Estate, Griffon, and Electronic Arts.

In this episode, Andrew also sheds light on stock buybacks and turning over rocks in order to unearth value even from beat-up ventures and potential investments. He emphasizes the strategy of having enough key players in a business or investment that's enough to stabilize everything.

Stay tuned to this discussion and find out what else Andrew has to say about the current financial industry.

About Andrew Sather

Andrew is a self-taught investor since 2012. He specializes in identifying value traps and avoiding stock market bankruptcies.

"I didn't see a resource to walk beginners through investing, step by step. So I went out and made it.", Andrew said.

Show Notes

[03:31] Warren Buffett's Cash Cows
[04:55] Companies need to do it smartly with Buybacks.
[06:45] The parallels of EA Games and DairyQueen.
[09:10] What makes EA Games a Cash Cow?
[12:10] On turning over rocks; books by Peter Lynch.
[13:13] An observation I disagree with…
[14:34] What needs to be understood in flipping rocks in beat-up industries.
[18:23] Having a hedge for the US dollar.
[19:00] What I found out about the Top Companies in the S&P 500?
[19:58] Companies whose revenue did well even if the US dollar didn't.
[26:35] The likes of Paypal; the likes of Mastercard.

Resources

Beating the Street by Peter Lynch
One Up On Wall Street by Peter Lynch
Seeking Alpha Articles by Andrew Sather
E-Investing for Beginners

About Eric Schleien

Eric currently resides in Philadelphia, PA.

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CONTACT ERIC SCHLEIEN

Email: IntelligentInvesting@gmail.com