Coburn Ventures Podcast

A discussion on shorting might seem odd to qualify in a series on just three topics on the investment process. Still, it is one of the topics that we wondered if long-only investors may under-appreciate, not only for how it all works (there are fascinating math problems with shorting) but also how it can make you a better investor overall.  Let’s jump in.

This is a five-part series on investment process. If there was a passion project at Coburn ventures, investment process might be it! We’ll walk through a few tools and concepts that we hope might spark ideas or tweaks or even affirmations for your own investment process, and then we get to sit down with some friends for additional conversation. Thanks for listening.

THE INTEGRATED DECISION ENGINE

Last week we discussed competition for capital, a philosophy that can lead to tools that increase completion, competition for our time, and clearer decision making. Today we introduce the integrated decision engines, which builds on that last tenant of clear decision making. We’ll walk through how the tool was developed, but listen for what the tool provides beyond the spreadsheet: the simple ordering of key factors in the portfolio, a common language for the portfolio manager and analyst, and just enough understanding for the analyst to better understand what the portfolio manager is looking for and needs to succeed.

This is part of a five-part series on investment process. If there was a passion project at Coburn ventures, investment process might be it! We’ll walk through a few tools and concepts that we hope might spark ideas or tweaks or even affirmations for your own investment process, and then we get to sit down with some friends for additional conversation. Thanks for listening.

This is part one of a five part series on investment process. We’ll walk through a few tools and concepts that we hope might spark ideas or tweaks or even affirmations for your own investment process, and then we get to sit down with some friends for additional conversation. Thanks for listening.

One of the most energizing moments as an investor seems to be when we discover insightful, sometimes one or two-degree changes that open up those amazing, uncorrelated insights that make the whole decision-making and portfolio management process seem clear. 

With that in mind, we slow down for this conversation to walk through a couple of processes we use to create friction and create a competition for capital, an idea that I think shoots focused energy through an entire investment process, start to finish. The processes include: 

• a layered, qualified funnel, 
• weekly rounds with completion and decision-making at the end of the week, a
• benches and trackers to capture companies that didn’t win in the competition for capital at that time.

These are methods to counter rabbit holes, a low return on time, and to increase team communication and focus. The purpose of presenting this is to, as always, offer up methods that you can then tweak as you like or let them go on their way.

Let’s jump in.

Rolando Morillo has been doing ESG at Rockefeller Capital for most of his career, well before we were even calling it ESG!

When he started, the world was still in negative screening and SRI, but he and his mentors were working with a small community of companies and investors focused on deeper engagement around sustainability.

Fast forward 20 years…in today's increased enthusiasm (and resulting confusion) around ESG, standards, and regulations, Rolando provides an example of what integrating ESG into the foundation of his fundamental research can yield. In this conversation, Rolando naturally, almost unwittingly, bakes in a long view to all of his thinking, so helpful to many of us who are earlier on in the journey.   Let’s jump in.

**This is part of the Day to Day ESG Series: conversations meant to illuminate the day-to-day elements that build up an ESG process.

When it comes to assessing the S in ESG with a data-oriented lens, we turned to longtime friend Sasha Dichter. Sasha ended up co-founding an entire company to solve a problem he had: when it came to understanding if their programs were affecting their clients in the way they wanted, they never had the robust data they really wanted.

So they asked themselves,

“What if we went and got the data? There are people on the other end of this problem, what if we went and talked to them?”

...and 60 Decibels was born.

Let’s jump in.

**This is part of the Day to Day ESG Series: conversations meant to illuminate the day-to-day elements that build up an ESG process.

Invisible ESG is meant to give a name to the infinite little or big day-to-day practices inside organizations that will never specifically check a box in the formal ESG mechanism but really do the actual work that ESG is supposed to accomplish: remedying that gap between capitalisms efforts to build businesses and a better understanding of the negative (and positive!) externalities that may pose.

An even better way to think of “Invisible ESG” is all the stuff that was deeply multi-stakeholder in spirit before “multi-stakeholder” became a thing. It’s an acknowledgment that many businesses have degrees of ESG already embedded. It's a great position to start from: rather than looking for everything that is WRONG, let's begin by acknowledging so much that is right.

Invisible ESG is about working from our base. As a bonus, we have questions for management at the end of this short conversation. Let’s jump in.

**This is part of the Day to Day ESG Series: conversations meant to illuminate the day-to-day elements that build up an ESG process. 

Today we have a little something different: sometime last spring as I was editing, I started to save pieces of conversation that didn’t fit with the topic. Maybe they were afterthoughts, side topics, or maybe just fun conversations.

The result? We have meaty topics in small bites today, from our conversations earlier in the year with JP Rangaswami, Rudy Karsan, and Rolando Morillo. We went from blockchain to the meaning of language, from materialism to investing with kids. It's a small taste of all that we cover as we make these podcasts for you! I hope you enjoy it.

It’s fun to talk about sports a bit, but how does it relate to investing? Oh boy, there is change all over this topic, which matters because this dip into the sea change that the sports world is undergoing is likely a strong harbinger of what is to come in the broader business world. Sports so often plays that role in our society.

Our friend Jack Elkins was so helpful to talk to about all of this change! He will offer up his observations, that stem from a mix of experience with many professional sports, a love of sport, and deep knowledge of  how the business of sport works. He put these skills to work as Director of Innovation at the Orlando Magic for many years and now teaches and does this work privately.

So maybe a quick spoiler, Jack is going to present that it is the WILD WEST in sports right now, and since we recorded this conversation, the American college football scene has exemplified just about everything Jack is talking about: two major California schools joined the Big 10, charting a course away from regional leagues with long-standing rivalries (and great fight songs that speak to these rivalries!), and important histories tied to region, to a super league based on the strongest, wealthiest, powerhouse programs.

Let’s jump into the wild wild west of sports…

In this series we discussed meetings, and we discussed qualities of collaboration worthwhile to pursue, so now we must give you something even more specific in case you’re looking for more chances to implement new methods: enter the Rocks meeting. 

A "rock" is a question or problem that IF you had the solution, you would alter what you are doing right now significantly. As an example for investors, you would dramatically change your position size, or get in or out of a position altogether. 

The method of rocks meetings is counter-cultural, so with that in mind, we are only going to go over the first piece of it, because it's CRITICAL to get that right to have the methodology work any better than any other ordinary investment discussion. 

If used well, I really do think you will come away with better questions leading to much more valuable investment insights. (And p.s. - the Rocks methodology has meetings and collaboration BUILT IN)

Some parts of the methodology will sound a little tough. That’s the counter-cultural element. Over time, it really starts to flow, but first, let’s jump in...