Apollo Investor Day ...

[Chart S&P500 vs PE Firms]
Fund Related Earnings [FRE]

d1io3yog0oux5.cloudfront.net/_0ae9c9a0bc57a…

'When stated in terms of lifetime dollar wealth creation, the best-performing 4% of listed companies explain the net gain for the entire US stock market since 1926, as other stocks collectively matched Treasury bills.'

- Hendrick Bessembinder, 2018

sciencedirect.com/science/articl… 'Most individual US common stocks provide buy-and-hold returns that fall short of those earned on one-month US Treasury bills over the same horizons, implying that the positive mean excess returns observed for broad equity portfolios are attributable to relatively few stocks.'

"We do not now give any guidance. Some analysts have asked us to give guidance, we prefer not to, however, I have said publicly that our goal is to grow net income 15% to 20% annually compounded. Over the last 30 years to 33 years, I think we have done that, and the actual growth has been somewhere around 18% or 19%."

Laurans Mendelson, HEICO Q1 2024 "But the airlines all recognize that HEICO has been extremely gentle with regard to price increase. And frankly, in areas where we have been more restrictive on price increase, we anticipate significant share gains as well."

Laurans Mendelson

Li Lu on Shorting…..

"Three things about shorting make it a miserable business.

On the long side, you have 100% downside but unlimited upside. On the short side, you have 100% upside and unlimited downside. I do not like that math.”

-Li Lu “Second, the best short has some element of fraud. However, a fraud can be perpetrated for a long time. Of course you borrow to short, so they could really just wear you down. That’s why I could be 100% right and bankrupt at the same time. But, you know what, you go bankrupt first!”

- Li Lu

‘The average year of foundation of our portfolio companies at the year-end was 1916. Collectively they are over a century old.’

Fundsmith 2023 Letter…

#long_term

fundsmith.co.uk/media/31plodnq…
‘We sold our stakes in Adobe, Amazon and Estée Lauder and purchased stakes in Procter & Gamble, Marriott and Fortinet. As last year this may seem a lot of names for what is not a lot of turnover as in some cases the size of the holding sold or bought was small. We have held ten of our companies for more than 10 years, five of which since inception in 2010.’

My son’s bookshelf .. coming along nicely!

He just finished Sam Walton’s book. @tom_peters

'There is only a tiny number of exceptional companies, There are some very specific things that permit exceptional companies to be sustainable decade after decade. Many of them are where the customers are fanatically reliant on you.' Reece Duca

Excellent

'The single most important thing as an investor - it's not the quantitative information - it's the qualitative information. It's having an arsenal of qualitative information that helps you reverse engineer the business model - What's actually happening in the company.'

‘I’ve read quite a lot about Warren Buffett and Berkshire Hathaway, and imagine that the people heading his various companies all think much more about long-term prosperity.’

- Sir Alex Ferguson

https://twitter.com/mastersinvest/status/1714586505925242881

‘If I was an aspiring football manager, or dreamed about running a big company, I'd take a very careful look at the composition of the ownership before accepting any job.’

- Sir Alex Ferguson

‘Do something that you're good at, that makes money, that gives the customer what they want, when they want it, and at the right price, and for goodness' sake DO NOTHING ELSE.’

- Matthew Ingle, founder Howdens

#maintain_focus ‘Three very important principles:

1. Cash is King

If you've got it, you're fine. If you haven't, you're not - because no one is going to want to lend you the money, and if they do, guess what, you're going to have to pay it back, with interest and more. You need to run a cash generative business. Cash is King.

2. Lowest Cost Production Is not a nice-to-have, it's a must-have.

If you don't have the lowest cost production you are going to find someday that someone else will, and someday someone is going to reduce their prices, and if you can't match them, you are going to be in serious trouble. One day, like it or not, you are going to have to get into the gutter with a competitor and you had better be sure that you're the one who is going to be able to crawl back out again, because only one of you is going to survive. Sorry. I know it sounds awful, but it's true.

3. Your Best is Not Good Enough

I would sometimes say to John that we were doing our best at this or that and he would simply say, Matthew, that is not an argument. It doesn't matter whether you're doing your best or not. In business you're not rewarded for good efforts. Sometimes your best is not going to be good enough.'

‘This is the story of a place that has never gone outside its own ranks to recruit a chief executive in 53 years, where it's nothing special to work there for two or three decades, and where people have no problem with a remuneration structure that only makes them rich if they commit to years of loyalty.’

#promote_from_within
#long_term
“If you have an idea, and if you can stand it up to the satisfaction of the bank's leaders and its absurdly smart risk professionals, then they will give you the keys and tell you to go and do it.
They won't tell you how. That's your job, because it's your idea. You will be encouraged to fail along the way. Sometimes you will fail a few times before you get it right.”

#empowerment
#autonomy
#permission_to_fail

‘When the people of Publix tell about their work, they make it seem simple by referring often to the number-one goal of the organisation, the ideal and challenge of all that they do - pleasing the customer.’

(Today, Publix Super Markets is the largest US employee-owned company.) ‘Publix always promotes from within, never filling jobs from the outside, requiring every employee to start at the bottom.’

#promote_from_within

‘To succeed in economic life, it is not enough to be intelligent. What is necessary is to combine intellectual abilities with solid common sense, a taste for the concrete, and above all a sense of leadership, the ability to lead high-level teams. As one of my professors told me, to make a company sublime, you also have to be able to have ordinary people do extraordinary things.’

- Bernard Arnault ‘Success, for an entrepreneur, is leading a company that develops, that gains market share, that manages to bring together a team. This is what has always stimulated me, more than the strictly material aspect.’

- Bernard Arnault

#obliquity

‘According to Henry, anyone who had invested $12,000 in 1962 would be worth over $1 million in 1969.’

- Thomas Bloch “In every business and particularly every service business, people are the most valuable asset. The people who meet our customers face-to-face are H&R Block. Our success has always been due to quality, customer-oriented people in our organization.” Henry Bloch

‘It is far more attractive for a company to offer better quality than a lower price. Price is important, but if that's all you have to offer customers, then eventually you're just a commodity & you hit a dead end in the market.’

Jim Koch, founder & brewer Samuel Adams

#quality ‘…..You're stuck always trying to be the lowest-price provider, cutting corners to reduce your costs.
Somebody can always underprice you by cutting more corners….’

‘The GPT in chatGPT stands for “generative pre-trained transformer”, a kind of language model. It might well stand for general-purpose technology: an earth-shaking sort of innovation which stands to boost productivity across a wide-range of industries.’

economist.com/finance-and-ec… ‘… despite epochal technological and economic change, fears of mass technological unemployment have never before been realised. Tech can and does take a toll on individual occupations, however, in ways that can prove socially disruptive.’

‘My job is not to sell you stock. If you want to talk about the strategy, the portfolio, where we are headed and you like what you hear then please buy the stock. But if not, I’ve got plenty of shareholders.’ Paul Perreault CSL (outgoing CEO)

afr.com/work-and-caree… "If a CEO is simply promoting the stock and trying to get the stock price higher, he's not doing his job." Warren Buffett

“I was absolutely, throughout high school and college, terrified of public speaking. I avoided any classes, signing up for them, that would require it. I would get physically ill if I even thought about having to do it, let alone doing it...." Warren Buffett "... I went down to a Dale Carnegie course when I was at Columbia, and signed up for it, gave him a check for a hundred dollars, went back to my room and stopped payment on the check."

'Because investors cannot count on their ability to accurately predict recessions, we believe the best course of action for equity investors is to own high-quality cos protected by strong competitive advantages..' Ensembe Q3

Write-up: NVR SCHW

good read

ensemblecapital.com/wp-content/upl… '.. it is important for investors to recognize that the sample size of relatively rare events such as recessions and periods of inflation is very small.... when looking for past instances of persistently high inflation in the US, investors have but one example; the 1970s...'

"I guess I've stolen - I actually prefer the word 'borrowed' - as many ideas from Sol Price as from anybody else in the business." Sam Walton

https://twitter.com/72types/status/1587145984244531200

"I learned everything from Sol Price. The smartest businessman I ever met." Jim Sinegal, founder Costco

Fastenal - best performing SPX stock 25 yrs post 1987 crash

A few quotes on Fastenal from book Simply Brilliant by Bill Taylor

Decentralisation & Autonomy
Lots of small businesses with own P&L
Culture – Customer Focus
Decision making at the edge
Staff run business like own it '[Fastenal founder+ex-CEO] Kierlin gets paid a piddling $120,000 pa, an amount that has remained constant for the past 10 yrs. No options. No bonuses & no long-term incentives. "Obviously I don't need the extra pay because my net worth is tied up in the stock" Kierlin says" 1997

'There is no one in this world that is a better manager than Tom Murphy." Warren Buffett

'Business Lessons from Tom Murphy' [h/t @jtkoster]

rationalreflections.substack.com/p/business-les… Buffett recommended this podcast with Tom Murphy in 2018...

soundcloud.com/howleaderslead…