Thread by @NeckarValue

Fantastic conversation with @yliownyc who has thought deeply about game selection/strategy, training, process, and execution.

"Barriers to entry in this business are exceedingly low. Barriers to excellence are incredibly high."

https://twitter.com/tseides/status/1381577984700772352

"Our quest is finding durable, brisk compounders. We find them in inefficient volatility. The separation between price volatility and business volatility is ridiculously important. We can exploit volatility [if business value is stable.] If both fluctuate it's very difficult."

"We had some extraordinary right-tail investors in very large markets. How is that even possible? Most of the time, these are very efficient markets. But there are always occasions, and you don't need many a year, where they go inefficient for a moment."

Patience:
"The biggest challenge with a compounder portfolio is you got to be extremely patient, both holding them and waiting for them. In 2017, we bought one stock for 17 months. When you have a big analyst team and you buy one stock for 17 months, it drives them crazy."

"My source of strength comes from the quality of our businesses, the quality of the people we partner with, and the quality of my team.

My source of patience comes from earnings power. We focus on potential energy in our portfolio. Our portfolio is either coiling or performing."

Game selection: "I switched from variant perception to unfair fights."

Authenticity: match strategy with personal talent, temperament.

"Just because you know what's the right thing to do, doesn't mean you can do it. Anybody who's had a golf or tennis lesson should know that."

Talk covering similar topics from the ground up.

https://twitter.com/NeckarValue/status/1381321777171853316