Invest Like the Best with Patrick O'Shaughnessy [REPLAY] Will Thorndike - How Skilled Capital Allocators Compound Capital - [Invest Like the Best, EP.36]
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Apr 30, 2019 
Will Thorndike, author of "The Outsiders" and founder of Housatonic Partners, shares insights into successful capital allocation. He discusses iconic CEOs like Warren Buffett and their contrarian views on dividends and acquisitions. The conversation highlights the importance of strategic decision-making in private equity, the value of flexibility in leadership, and the evolving landscape of search funds. Thorndike also reflects on his experiences with Asurion and the growth of recurring revenue in investments, emphasizing the significance of partnerships in driving success.
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Unconventional Wisdom: The Dividend Disdain
- Outsider CEOs generally avoided regular dividends due to their tax inefficiency, prioritizing after-tax returns.
- They occasionally used special dividends strategically, timing them with favorable tax laws, optimizing shareholder value.
Singleton's Buyback Mastery
- Henry Singleton, Teledyne's CEO, pioneered the strategic use of share buybacks.
- He repurchased over 90% of Teledyne's shares between 1972 and 1984, acquiring them at low PEs, demonstrating value investing principles.
Disciplined CapEx: Setting and Enforcing Hurdle Rates
- Implement high hurdle rates for capital expenditures and enforce them rigorously.
- Tie CapEx decisions to a strict budgeting process with retroactive accountability, ensuring disciplined spending.
