#148 - Paul Lountzis - The Qualitative Characteristics Are Becoming Significantly More Meaningful And More Important In Company Analysis

75 minutes

In episode 148 we welcome Paul Lountzis. Paul starts with his background in consulting that led him to develop a skillset in competitive analysis that meant going out into the field to conduct research far beyond the numbers, leading to “differential insights.” He wanted to get into value investing and reached out to a number of firms including Warren Buffett’s assistant, Gladys Kaiser. He ended up interviewing with Chuck Royce’s partner, Tom Ebright, and after Chuck saw his work, he was put on research projects for Chuck. He then went to work for Ruane, Cunniff & Goldfarm before founding Lountzis Asset Management.

Paul then discusses his framework of finding outstanding businesses that are unique, different, and special. He talks about that changes that are taking place and how the qualitative characteristics are becoming significantly more meaningful in company analysis. He highlights the importance of field research primarily to prevent permanent loss of capital, and to drive greater conviction to potentially make bigger bets on companies.

Meb then asks Paul to get into the investment process at Lountzis. Paul emphasizes a long-term holding period, screening on financial metrics like return on investment capital, free cash flow, revenue growth, and covering 600-700 names across the team. Beyond that, the team digs into further insights, from management elements like capital allocation, shareholder friendliness, and the quality of their operating ability, to valuation and the general level of inflation and taxation. He then dives into some examples of how he and his team identify businesses that are unique, different, and special in practice.

Meb then gets into questions on risk. Paul discusses how he and his team look at position sizing and risk based on the clarity in which they understand the business.

The conversation then shifts into a discussion about the current and future state of Berkshire Hathaway. Paul talks about how unique and special Warren Buffett is, how valuable the underlying businesses are that Berkshire owns, and a couple of items that concern him about life after Warren Buffett and Charlie Munger.

All this and more in episode 148, including a special story about a hand he played in helping students meet Warren Buffett.

More episodes from The Meb Faber Show

#235 - Ajay Prakash, Rinse - The Barriers To Entry Are Super Low…But The Barriers To Scale Are Incredibly High

In episode 235 we welcome our guest, Ajay Prakash, co-founder and CEO of Rinse.

In today’s episode, we’re talking about building and scaling laundry and dry cleaning. We talk about the …

#234 - Harindra de Silva, Analytic Investors of Wells Fargo Asset Management - Just Because A Factor Hasn’t Been Working For 3 Years…Don’t Ignore It…Continue To Evaluate It

In episode 234 we welcome our guest, Harin de Silva, president and portfolio manager for the Wells Fargo Asset Management Analytic Investors team. In …

#233 - Lisa Rich, Hemisphere Ventures, Xplore - Opening Up The Door For Access To Space

In episode 233 we welcome our guest, Lisa Rich, managing partner of Hemisphere Ventures and founder and COO of Xplore. In today’s episode, we’re talking about tech and the front lines of …

#232 - Luis Perez, Remoov - We’re Removing That Headache And We’re Giving You That Piece Of Mind And Your Space Back

In episode 232 we welcome our guest, Luis Perez, Founder of Remoov. In today’s episode, we’re getting organized. We’re talking about taking the work off your hands of removing all of that …

#231 - Julian Klymochko, Accelerate Financial Technologies - The Democratization Of Alternatives, It’s Happening, But It’s Something That Does Not Happen Overnight

In episode 231, we welcome our guest, Julian Klymochko, founder and CEO of Accelerate Financial Technologies. In today’s episode, we’re talking …

#230 - Ryan Lupberger, Cleancult - There’s No Other Brand On The Market That Can Sit On Shelves And Be Zero Waste

In episode 230 we welcome our guest, Ryan Lupberger, Co-Founder and CEO of Cleancult. In today’s episode, we’re talking cleaning. Sustainable …

How you can listen to this podcast

You can listen to episodes right here on the website, or if you prefer, in a podcast app. Listening in an app makes it easier to keep track of what you’ve already heard, listen without using your data plan and many other conveniences.

Recommended apps
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56