Value II: is Investing Not As Hard As We Think?

Published on
October 30th, 2020
Duration
58 minutes


Value II: is Investing Not As Hard As We Think?

The Big Picture ·
Featuring Mark Walker and Stephen Clapham

Published on: October 30th, 2020 • Duration: 58 minutes

Steve Clapham, former hedge fund manager and founder of Behind the Balance Sheet, is joined by Mark Walker, managing partner of Tollymore Investment Partners, to analyze how investors can find value in a time when price discovery is more difficult than ever. Walker notes how many investors have inherited too many bad habits from the sell-side, such as excessively looking at screens, over-reliance on complex financial models, and relying on broad knowledge as opposed to deep understanding. Walker then points out how investors can avoid falling into these behavioral traps and, in this way, discover and realize more value in their investing process. Lastly, Walker and Clapham use this framework to analyze one of Tollymore's holdings, Gym Group PLC. Filmed on October 27, 2020. Key learnings: Focus on attaining deep understanding rather than acquiring broad knowledge. Turn off your screen and learn how a business works from the inside out. Only then make capital allocation decisions.

Comments

Transcript

  • BA
    Bruce A.
    31 October 2020 @ 13:04
    10 minutes so far and very little information. Not the way to get viewer engagement.
    • SC
      Stephen C. | Contributor
      2 November 2020 @ 17:01
      Bruce, apologies you didn't enjoy the first 10 minutes - probably my fault as I didn't get it warmed up fast enough - it gets better if you persevere...
    • RL
      Ryan L.
      3 November 2020 @ 20:28
      I actually think he said a lot in the first 10 mins. There are significant conflicts in the investment management business. He outlines a few and the reason why he established Tollymore. A deeper conversation than just stock advise.
  • JW
    J W.
    31 October 2020 @ 13:23
    Value 1 was interesting, I'm afraid this one did not capture my attention.
    • SC
      Stephen C. | Contributor
      2 November 2020 @ 17:00
      Sorry JW, I shall try to do better next time! Thanks for the feedback
  • DM
    Dominic M.
    1 November 2020 @ 01:12
    Unassuming but outstanding.
    • SC
      Stephen C. | Contributor
      2 November 2020 @ 16:59
      I could not have summed up Mark's commentary more succinctly - glad you liked it
  • TS
    Theodoros S.
    1 November 2020 @ 21:30
    How can a company like GYM.Ltd, have any potential especially now with the lockdowns and covid virus. Moreover, how they are going to grow or purchase any other company or smaller gyms with very low cash flows and no earnings. I do not get it. Finally how is it that they will get help from government and landlords for rents. Also how is it that they have high 40s EBITA range I do not get it. I do not believe the company can survive and thrive. Maybe he company will not thrive neither survive in my opinion. However for sure if they survive for sure they could give good returns. For that company I believe it is all about demand.
    • SC
      Stephen C. | Contributor
      2 November 2020 @ 16:58
      thanks Theodoros - my understanding of Mark's perspective is that Gym Group will be able to grow again when we get back to normal because 1 they are cheaper than most conventional gyms so they will benefit from trading down in a more difficult environment 2 there will be fewer gyms around, less competition 3 they will be able to buy distressed assets 4 they will be able to rent premises more cheaply If you extrapolate out, this could be a very cheap stock over time, but it depends on how much growth they can deliver - I agree it's uncertain