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Episodes
Eric Schleien discusses value investing, rational investment analysis, and vital mental models.
Episodes
Monday Apr 12, 2021
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
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
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
Thursday Mar 25, 2021
Thursday Mar 25, 2021
Join Eric Schleien with today's interview guest, Trey Henninger, as they talk about Entercom, Northfield Precision, and the new SEC rule that impacts dark companies and small businesses. By taking a close look at the outcomes and probabilities close to ETC and the merger made with CBS Radio, he explains what Entercom holds for the next 12-18 months and tells us the technicalities on why he thinks owning shares from the company can still end up positively.
Summary
In this episode, Trey will also be getting into all the old news, the expected, and the good with Northfield Precision Instrument Corp. Listen as he discusses the company's performance during the pandemic, their ROI report, and how NFPC will seemingly be affected by the new SEC rule that targets dark companies. For Trey, once the new regulation comes into effect in the following months or years, going expert or grey may become an option to be considered for Northfield.
Going in further on the upcoming SEC rule, tune in as Trey explains what the regulation aims to do, what it requires from business entities, how it can backfire, and what it means to trade without a quoted price –a scenario that may just mean good deals for experts. For him, there are always as many opportunities in matters like these as there are risks in every leverage.
About Trey Henninger:
Trey Henninger runs the blog and podcast DIY Investing. Trey is a private value investor focused on microcap and dark stocks in the United States. His focus is on high-quality companies with predictable, durable earnings where management has skin-in-the-game.
Trey runs a concentrated portfolio of 5 stocks with a 20% weighting each. By focusing on small companies, Trey hopes to find overlooked compounders at value prices. His favorite opportunities have a market cap below $50 million.
- Website
- The DIY Investing Podcast (on all major platforms)
Outline of the episode:
- [00:42] Entercom Communications – America's #2 Radio Broadcasting Company.
- [02:18] ETC as a radio company and as a growing digital audio presence.
- [02:49] The crashing merger of ETC and CBS Radio.
- [03:46] Binary outcomes and the probabilities for the company now.
- [06:55] What the debt market is telling about it.
- [08:03] Covid as an excuse...; The company's ownership.
- [09:49] A business with no assets, basically.
- [13:09] Bad as expected – Northfield Precision
- [15:54] What SEC Rule is, not retail investor-friendly.
- [16:40] How the new regulation can backfire – a theory!
- [18:25] What it means to not get quoted a price…
- [19:45] Anytime you have leverage, there's risk and also lots of opportunities.
Resources:
Follow and subscribe to the new, The Eric Schleien Podcast:
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:
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:
Monday Mar 15, 2021
Monday Mar 15, 2021
Join Eric Schleien with his guest Peter McCormack as they talk about podcasting, the unique characteristics of Bitcoin, and what the future holds for it. Because of the oppositions and baseless accusations against it, for Peter, Bitcoin should've already failed. Today, it is still operating and growing even higher.
In this episode, Peter gets into discussing decentralization, Bitcoin mining, his piece of advice to anyone looking into investing in Bitcoin, and so much more. To interested investors, Peter believes there should be a profound investment strategy before throwing money onto Bitcoins. He believes cryptocurrency can be a very punishing investment if done wrong.
Stay tuned to this casual exchange and find out more of what Peter has to say about Bitcoins and investments.
About Peter McCormack:
Peter McCormack is a full-time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship, and Bitcoin. He is the host of the What Bitcoin Did Podcast.
The What Bitcoin Did Podcast, is a twice-weekly Bitcoin podcast where host Peter McCormack interviews experts in the world of Bitcoin development, privacy, investment, and adoption. Launched in November of 2017, the podcast has grown to nearly 200 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community.
Individual podcast episodes have focused on engaging and accessible conversations with some of the industry's most influential minds. Established veterans such as Adam Back, Charlie Shrem, and Andreas M. Antonopoulos have shared the WBD mic along with rising stars. No areas of discussion are off-limits, and differences of opinion are encouraged. Past topics have ranged from Cannabis to Censorship, Libertarianism to the Lightning Network, and Sex Workers to Segwit2x.
You can find Peter McCormack on:
Outline of the episode:
- [01:59] Stumbling upon Podcasts in a vegan retreat in Italy…
- [03:29] Podcasters – just get out and do it!
- [04:50] Are cryptocurrencies worth investing in?
- [06:20] What is decentralization?
- [08:04] The resistance of Bitcoin.
- [11:24] On Bitcoin's stability.
- [13:40] What does Blockchain do?
- [17:15] Bitcoin Mining.
- [20:00] A bit of advice to anyone wanting to invest their money in Bitcoins.
- [21:51] Is Satoshi Nakamoto fame-driven, rich, alive?
- [24:39] What could break Bitcoin?
- [27:53] Privacy in Bitcoin.
- [30:30] The first thing to do when getting into Bitcoins.
Resources:
How to Start a Podcast in 2020 Pat Flynn
Understanding DigiCash
How to Download Kraken Pro: Advanced Bitcoin & Crypto Trading on PC:
Kraken's Official Mobile Apps
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:
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:
Facebook | LinkedIn | Twitter | YouTube | GSCM | Instagram
Email: IntelligentInvesting@gmail.com
Tuesday Jan 26, 2021
Tuesday Jan 26, 2021
I discuss why I hate shorting stocks and discuss the recent example of GameStop (GME).
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
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
Monday Jan 25, 2021
Monday Jan 25, 2021
Welcome to the Intelligent Investing Quick Thoughts Series, where I just spend a few minutes on relevant topics, thoughts, or things in the news. Episodes are all under 10 minutes.
In this episode, I discuss some success I've had with overbid opportunities where you buy a stock that is getting bought out at an absurdly cheap price with the hope for a higher bid and where your downside is low due to the low valuation already. With a low-interest-rate environment, I expect these opportunities to continue to run into 2021.
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
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
Thursday Aug 27, 2020
Thursday Aug 27, 2020
Subscribe
If you like The Intelligent Investing Podcast, please consider subscribing on:
Summary
Structural Balance
International Seaways
Distressed Mortgage Notes
Show Links
- Never Navios (blog post)
- Navios Bonds (SEC Filing)
Staying In Touch With Braxton Gann
Staying In Touch With Eric Schleien
Wednesday Apr 22, 2020
Wednesday Apr 22, 2020
Subscribe
If you like The Intelligent Investing Podcast, please consider subscribing on:
Coronavirus Investing Series: Part 10
This is Part 10 of a special Coronavirus Investing Series. If you have not listened to Part 1, please click here to get the overall context/market overview during this unprecedented time.
You can also listen to:
Summary
Eric Schleien and Brian Dress discuss investment opportunities in the bond market. Brian Dress is an investment analyst at Left Brain Capital Management, LLC. Brian's angle relates to value opportunities his firm is seeing in the corporate and municipal bond markets, based on the massive selloff in credit markets over the past 6 weeks. Particular discussion points in this episode include:
Discussion of Bond Markets Pre-COVID
Brian thinks the spreads were far too tight which made it very difficult to position portfolios with income to match future expenses. Investors were forced to take too much risk to attain yield. This is something we have discussed extensively before on The Intelligent Investing Podcast.
How Credit Cycles Work Historically
The main takeaway here is that credit booms and busts occur far more often than do booms and busts in the equity markets. Savvy investors should be willing to take risks on bonds in trough phases like this one and gradually lighten the load as spreads tighten, creating the capacity to take advantage of the next down cycle.
Note: high yield bonds have led stock recoveries after every market drawdown since 1980 (1982, 1991, 2002, 2008-9, 2016)
Observations In Credit Markets
Brian has noticed indiscriminate selling related to a liquidity crunch, causing bonds at all levels of credit quality to sell off heavily. Brian believes this creates fantastic opportunities across the credit spectrum, which he and his company are taking advantage of to reposition clients. I discuss that in regards to all markets, here.
COVID-19 Gameplan
Brian is upgrading the credit quality of bond portfolios, taking the opportunity to lock in large coupons on stable companies, some of which continue to trade at a discount. Markets have been starved for these types of opportunities in the bond world and, while many of these have already narrowed, plenty of mispriced securities are still out there for investors. There are still chances to lock in great coupons, along with the potential for capital appreciation. Brian believes it is important to recognize that it is likely we will be in a 0% interest world for the foreseeable future.
Bond Opportunities
After Eric and Brian discussed the general overview/strategy with respect to bonds, Brian presents a few examples where he sees opportunity.
- Qurate (QRTEA) 8.25% 2030 bonds (Yield to maturity >12% at current price levels)
- Travel and leisure: Delta 4.375% 2028s (yielding >7% at current prices) and Carnival Cruise (unsecured 2020s and secured 2023s)
- Illinois Municipals General Obligation 5.1% bonds: effective yield of more than 8% for those in highest tax bracket, possible appreciation potential with interest rates now firmly at 0.
New Service
Brian is debuting a new service next week at Left Brain Investment Research, which is a twice-monthly pay-per-view Zoom call for investors of all types, where his firm will be introducing a single bond idea and a single stock idea each month and explaining the entire research process that went into those recommendations.
Brian has his firm's “shelter-in-place” specials available on his firm's website.
Listeners can enter the promo code “Eric” on the subscribe page and receive a full research service (stocks and bonds) for $99/month for the life of the subscription.
***FULL DISCLOSURE, I, Eric Schleien, DO NOT MAKE ANY MONEY OFF THIS PROMO CODE. ALL SAVINGS GET PASSED BACK TO INTELLIGENT INVESTING PODCAST LISTENERS.
LBIR Investment Ideas Forum
Second, Left Brain Research has its LBIR Investment Ideas Forum with the first two installments coming on April 30 where Brian and his firm will discuss a stock idea with the same format. Listeners can find all the information for these events on the front page of the LBIR website.
About Left Brain
Left Brain opened the wealth management business in 2014, a hedge fund in 2016, and an investment research platform in 2019. A differentiating characteristic of Left Brain's investing platform is an emphasis on selecting individual securities, particularly individual bonds in the high yield space. Brian genuinely enjoys and gets excited to share his investment philosophy with both individual investors and advisors. The company has slowly built up its investment staff in order to cover a large universe of high yield bonds (about 900) and about 200 stocks. What they've come to realize is that many advisors lack the resources to replicate this type of research apparatus, so they decided to create a product to provide this research to advisors so that they can select stocks and especially high yield bonds that will help clients achieve income goals in a compressed interest rate environment.
Data-Driven Bottom-Up Approach
Left Brain has a data-driven, bottom-up approach that incorporates technology to rank securities on the basis of a number of quantitative and qualitative factors, including revenue growth, gross margins, competitive dynamics, and accelerating results. The company portfolios are concentrated, as they view this as an allocation model with the best chance to deliver superior results and excess returns; usually no more than 20-25 stocks at any given time, particularly in the hedge fund.
Management
Company management is paramount in both equities and credit. Left Brain wants to see a history of success for the CEO, a strong capital allocation strategy, and an alignment of interests with investors (“skin in the game”); also for equities and bonds, they want to see strong fundamentals in the underlying business, no matter what the valuation or possible yield compensation
Equities
The company looks for strong (and accelerating) revenue growth, high (and expanding) gross margins, favorable competitive dynamics
Distressed Bonds
For distressed bonds: Left Brain looks for deleveraging (either through improved EBITDA or retiring debt through asset sales), improving trends in operating metrics (revenue, EBITDA, total debt), high yield compensation per unit of leverage (Debt/EBITDA), and most importantly, a strong Free Cash Flow (FCF) profile.
Staying In Touch With Left Brain Investment Research
- Click here for more information on Left Brain Investment Research
- Click here for more information on Left Brain Wealth Management
Staying In Touch With Eric Schleien
Wednesday Apr 01, 2020
Wednesday Apr 01, 2020
This is Part 8 of a special Coronavirus Investing Series. If you have not listened to Part 1, please click here to get the overall context/market overview during this unprecedented time.
You can also listen to:
In this episode of The Intelligent Investing Podcast, I sit down with Jeremy Raper to chat about a potential opportunity in Japanese Mall REIT's which have been hit pretty hard during this coronavirus pandemic.
Overview
If you are willing to look through whatever happens in 2020 and assume we go back to a normalized environment in 2021, then you should be looking at some of the most beaten-down sectors.
You have to ask yourself a few questions when valuing names in the most beaten-down sectors of the economy:
- Is the equity going to survive?
- What losses are they taking along the way?
- What does that post-corona-world look like?
Japanese REITs
Japanese Mall REITs fall within the broader subsector of Japanese REITs. REITs are real estate investment trusts. Furthermore, REITs must pay 90% of their income as dividends.
Japanese Hotels
Why Japan hotels in particular? Japan has been under-hoteled for a long time. There has been a shortage of hotels and that had been rectified somewhat on the runup to the Olympics.
However, the hotel fleet is still pretty tight.
Two Cheap Japanese Hotel REITs
On this episode, we discuss two Japanese Hotel REITs
Both REITs trade at fractions of NAV and high normalized cap rates.
Staying In Touch With Eric Schleien
Staying In Touch With Jeremy Raper
Friday Mar 27, 2020
Friday Mar 27, 2020
This is Part 6 of a special Coronavirus Investing Series. If you have not listened to Part 1, please click here to get the overall context/market overview during this unprecedented time.
You can also listen to:
In this episode of The Intelligent Investing Podcast, Eric Schleien & Jeremy Raper discuss opportunities in the Gold Sector.
Macro View
The macro view is that due to the massive debasement of currency during this coronavirus pandemic, that will be bullish for gold prices. In addition, gold companies such as Kinross Gold are shutting down production due to coronavirus outbreak which ends up being a net-positive for the commodity. Unlike commodities such as copper, gold demand is not impacted by economic activity due to less actual functional utility.
Gold Mining Stocks
However, Jeremy prefers Gold Minding stocks to owning actual physical gold outright. The reason for this is that if you can buy a gold miner that has been dumped during this coronavirus crisis, and you can find one where their revenue is in US Dollars but their costs are in their local non-US currency, you can also benefit from margin expansion. The margin expansion comes from cheaper labor costs, a lower price of oil, and a debasement of non-US currencies which have been destroyed in relationship to the US Dollar.
Polyus Gold
Polyus PJSC (Russian: ПАО "Полюс") is a Russian gold mining company. It is the largest gold producer in Russia and one of the top 10 gold mining companies globally by output (2.84 million ounces of gold production in 2019). It is headquartered in Moscow and is listed on both the Moscow and London Stock Exchanges.Polyus’ main assets are located in Eastern Siberia and the Russian Far East - in the regions of Krasnoyarsk Krai, Irkutsk Oblast, Magadan Oblast and the Republic of Sakha.
The company is controlled by Said Kerimov, son of Russian billionaire and politician, Suleyman Kerimov.
Due to the majority share ownership of Polyus by Said Kerimov, the company is not a buyout candidate. However, the company will benefit from margin expansion and Jeremy believes the company is trading at low-mid single digits of earnings based on $1,500 gold price. That equates to a 7.5% dividend yield on a conservative basis and probably higher with margin expansion.
If you want to listen to the episode of Jeremy discussing Polyus Gold, you can listen here. You can also listen to the commentary on Polyus on YouTube.
DRD Gold
Another gold mining stock that Jeremy likes is DRD Gold based out of South Africa. Like Polyus, they will benefit from a depreciation in their local currency (Rand), and benefit from higher gold prices. Unlike, Polyus, the company is a takeout candidate as their parent company has moved up its ownership stake in DRD from 40% to over 50%. DRD has a boatload of cash and no debt. The company currently trades at a very low P/E bases off $1,500 gold and their parent may very likely buyout shareholders in order to take advantage of the low stock price. Furthermore, the parent will probably want access to a large amount of cash being that the parent is somewhat levered. It's interesting to note that DRD pays an unusually low dividend which Jeremy suspects are due to marching orders from the parent company.
Monday Mar 23, 2020
Monday Mar 23, 2020
This is Part 5 of a special Coronavirus Investing Series. If you have not listened to Part 1, please click here to get the overall context/market overview during this unprecedented time.
You can also listen to:
OVERVIEW
In this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Jeremy Raper to discuss some merger arbitrage and special situation investment opportunities in this coronavirus market environment.