Kelvestor Profile picture
Apr 19, 2022 13 tweets 4 min read Read on X
Bryan Lawrence started Oakcliff Capital on 1 June 2004.

Since inception, his total returns after fees were 718% as compared to S&P 500 returns of 392%.

He did that while holding 16% of his portfolio as cash (on average)

Here are his frameworks: Image
He classifies his companies into 3 buckets

1) Pricing Power / Mission Critical products - $CHTR $TDG
2) Multi-sided Markets - $CVNA $CDLX
3) Low-cost providers $IBKR $BFIT Image
5 Questions 💡

1. Do we understand this biz, is it within the circle of competence?

2. Is this a great biz producing durable cash flow? Provide more value vs what it charges?

3. Mgmt alignment?

4. Are valuations cheap relative to the biz's cash flow?

5. Any misconceptions?
Why great biz and not something else?

1. They produce not just durable cash flow (CF), they also produce growing CF which increases the value of biz.

2. They produce predictable CF which makes valuing companies easier. When the market is volatile during stressful periods...
... he can buy stocks with confidence

All his time is spent on understanding great businesses.
Investing is investigative journalism.

Read public filings, new stories, and earnings calls.

See the track record of the mgmt. What they say versus what actually happened

Call customers, competitors, suppliers and ex-employees.

Everything.
20% Internal Rate of Return is the Minimum

If a biz's cash flow per share improves, IRR goes up.

The share price goes up? IRR goes down.

A mistake is made? Exit position.

A position is added when the IRR goes up, subtracted when the IRR goes down.
His words about being a concentrated investor?

⬇️ Image
Have a healthy dose of skepticism

When a stock keeps going up, it’s easy and dangerous to fall in love with it. Investors might feel they are smart. But the wrong process with a good outcome is even scarier.

Look for disconfirming evidence and seek new information.
Thoughts of inflation?

Businesses that can pass off inflation are those that add value to their customers well in excess of the price that it charges them. Some examples include $CHTR, $TDG and $GWRE.

Without TransDigm parts, an airplane cannot fly. Mission critical products.
Thoughts on volatility?

Human psychology is what it is. Most investors respond irrationally. They buy as prices go up and sell as prices go down. We get to buy from weak hands.
SUMMARY:

1. 3 buckets of companies
2. 5 questions framework
3. Buy great companies
4. Invest like an investigator
5. Set high IRR for our companies in our portfolio

More on him:

moiglobal.com/bryan-lawrence…

theinvestorspodcast.com/episodes/beati…
If you like this type of content content, follow me at @SlingshotCap

I tweet about
- company analysis
- investment concepts
- my investment journey

DMs are open for conversations as well!

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More from @kelvestor

Mar 28, 2022
This is Alex Rozek.

He runs Boston Omaha $BOC, almost like a tiny version of Berkshire.

He’s the grandson of Warren Buffett’s late sister Doris.

In 2015, he started publishing his shareholder letters.

Here are snippets that stood out to me:

📷 credit = WSJ Image
First, an introduction of Omaha Boston’s businesses

Controlled
1. Link Media Outdoor - billboard operations
2. General Indemnity Group - surety insurance
3. Airebeam - wireless broadband provider

Minority stakes
👉 Logic Real Estate
👉 Dream Finders Homes
👉 Crescent Bank Image
1/ Decision-making Framework

Alex Rozek lays out his framework clearly how he intends to run the company.

This allows him to attract the right kind of investors.

1. Incentives
2. Decentralization
3. Long-term thinking
4. Focus on cash
5. Partnership Image
Read 9 tweets
Mar 21, 2022
This is Joel Greenblatt.

Between 1985 and 1994, he produced an annualised return of >40%.

He taught extensively at Columbia University School of Business. It was where Warren Buffett studied under Benjamin Graham.

Here are his best lecture notes (they're simple!) : Image
1. Understand incentives

Companies are run by people. Understand how the top management is being motivated.

Out of their total package, how much compensation is fixed and variable?

Do they see their companies as their life's work or just another "job"? Image
2. Don't sell too early

If a company is performing well and its valuation is sensible, never sell it.

(I'll probably sell a bit to feel good, but I'll keep the bulk.)

We have our blind spots.

Overcome it by sharing our thesis with others and listening to feedback. Image
Read 11 tweets

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