The Intrinsic Value Podcast - The Investor’s Podcast Network

MI379: Quality Investing: Learnings From John Huber w/ Shawn O’Malley

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Nov 25, 2024
Discover the secrets of long-term quality investing, inspired by John Huber’s successful strategies. Learn how time-arbitrage allows savvy investors to thrive amid market mispricing. Delve into the unique fee structures that prioritize investor interests. Explore how to assess Return on Invested Capital (ROIC) and understand the true value of high-quality businesses. The focus shifts to recognizing the intrinsic value of companies, blending both quality and value investing for greater returns. Embrace patience and informed decision-making in your investment journey!
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INSIGHT

Assessing Compounding Power

  • Historic ROIC is a starting point but assess future reinvestment potential.
  • Consider a company's ability to grow or maintain its moat.
ANECDOTE

Hidden Compounders

  • A small, unknown company compounded returns at 17% annually for 25 years, highlighting the potential of undiscovered quality.
  • This firm returned substantial capital to shareholders through buybacks and dividends.
INSIGHT

Industry Context and ROIC

  • Industry context matters when evaluating ROIC; cyclical industries like steel require averaging returns across the cycle.
  • Cheapness doesn't compensate for poor long-term quality.
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