Invest Like the Best with Patrick O'Shaughnessy

Dennis Lynch - Delivering Alpha in Adapting Markets - [Invest Like the Best, EP. 228]

Jun 1, 2021

Dennis Lynch, Head of Counterpoint Global, brings his impressive experience managing over $100 billion in assets to the conversation. He discusses his unique approach to building strong research teams and how misclassified companies present major investment opportunities. Lynch emphasizes the significance of adaptability in his strategies over the years, touching on the power of time arbitrage and the influence of long-term perspectives, especially drawing lessons from Amazon's investment philosophy.

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INSIGHT

Misclassification Opportunities

Misclassification of companies often creates the biggest investment opportunities.
Industry standard classifications, like GICS, can hinder accurate company analysis.

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INSIGHT

Business Model Evolution vs. Core Thesis

While business model evolution can drive results, most successes come from a primary thesis playing out.
Amazon's evolution with AWS is an anomaly rather than the norm.

question_answer

ANECDOTE

Disruptive Change Research

Disruptive change research helps identify areas to avoid and supports a culture of continuous learning.
It aided in recognizing the disruption of radio by internet advertising.

Get the Snipd Podcast app to discover more snips from this episode

Navigating Investment Strategies in Changing Markets

04:11 • 3min

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Navigating Investor Education and Emotional Resilience

07:00 • 10min

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The Power of Time Arbitrage in Investment

17:23 • 30min

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Understanding Unit Economics and Risk Management

46:59 • 7min

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Navigating Change: Lessons from Amazon and Beyond

53:44 • 16min

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Collaborative Investing Insights

01:09:42 • 4min

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My guest today is Dennis Lynch, Head of Counterpoint Global, where he oversees over $100bn in AUM and boasts one of the strongest track records of any public investor. In our conversation, we cover Dennis's unique approach to building a research team, how misclassification of companies often creates the highest upside opportunities, and how Dennis has adapted his investment process over the past 20 years. I think Dennis defines what it means to be intellectually honest, and you will hear that in his answers throughout our discussion. I hope you enjoy my conversation with Dennis Lynch.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

(for me- )

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This episode is brought to you by MIT Investment Management Company (MITIMCo), the endowment office of MIT. MITIMCo seeks to find people who are focused on achieving exceptional long-term investment returns, partner with these firms early, and stick around for the very long term.

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Show Notes

[00:03:47] - [First question] - How he would teach potential students to be investors

[00:04:26] - The Money Game

[00:04:40] - Moneyball

[00:05:59] - Pros and cons of volatility when investing

[00:08:55] - Emotional response to volatility

[00:12:44] - Training to have a better temperament

[00:14:20] - What is his investing game

[00:15:17] - The Ethical Algorithm

[00:16:44] - How time horizon impacts their investment strategy

[00:20:53] - Assessing a company’s earnings power

[00:26:12] - Shifting business models vs. evolving within a business model