The Business Brew

Mario Cibelli stops by the Business Brew to discuss his views of the world as it exists today. Mr. Cibelli is the CIO and Managing Partner at Marathon Partners Equity Management, LLC. This conversation covers why SMID caps might be an interesting opportunity at the moment, when companies should and should not be public, how Mario does his research, being involved and adding value to management teams, and much more.

Shout out to Stratosphere.io for sponsoring the show. It was a pleasure to pitch your product. Keep up the good work!

Thank you to @mathewpassy and the team at The Podcast Consultant for producing the show.

Detailed Show Notes

10:45 - Why is today exciting in SMID caps

22:00 - What types of companies "should not be public?"

38:30 - How Mario cracked the code on Netflix vs. Blockbuster back in the day

42:20 - Adding value to management teams

50:30 - Did Zuck start a trend in Silicon Valley?

53:37 - What might be a tough place to invest in over the next 3 years.

57:30 - How Mario thinks about investing in Uber

1:09:10 - How low share prices may end up driving business improvement

1:12:20 - "Your normal is someone else's nightmare"

1:16:40 - Is there opportunity to invest alongside Mario Gabelli?

1:25:10 - Large companies have really big marketcaps. Can they justify those going forward?

1:33:40 - Bechle and tequila

Bill and Dr. Luke Benoit talk about Luke's invention, the RypStick.  This is a golf specific episode.  Luke Benoit founded RypStick, a product Bill uses and enjoys.  RypStick helps golfers add distance to their game and Bill wanted to feature Luke because he respects what Luke created.
Normal episode will be back next week.

Note - This podcast has some advice that may be able to help you think about marketing your firm and/or yourself. Should you need a host, reach out to Bill. Should you need an editor, reach out to Mathew.

Mathew Passy (@mathewpassy on Twitter), founder/owner of The Podcast Consultant stops by The Business Brew to discuss his career, how he started his business and became the person behind your favorite finance podcasts, the podcast industry generally, tips for appearing on podcasts, the business of podcasting, and much more. As you should know by now, Mathew produces this show. The Business Brew, and the listening base, owes him a big thank you for how this podcast sounds.

This episode is sponsored by ⁠Stratosphere.io⁠.  ⁠Stratosphere.io⁠ is a web based terminal that has financial data, KPIs, links to filings, hedge fund

Head over to ⁠Stratosphere.io⁠ for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

3:52 - How Mathew became The Podcast Consultant

13:30 - Why did the Wall Street Journal kill its first podcast network

22:00 - Starting a business

27:50 - What was the podcast business like in 2019

31:45 - How is the podcasting ecosystem evolving?

39:50 - Different monetization strategies of podcasting

48:15 - How have Mathew's thoughts about podcasting changed?

50:30 - What makes successful podcasters?

54:30 - Some advice Bill thinks is worth thinking about

1:00:00 - Meta dicussion

1:05:00 - Some advice on how to start a podcast

1:11:00 - Podcasts as internal communication

1:13:00 - What do the different hosting services offer?

1:18:30 - Onboarding with The Podcast Consultant

Ian Cassel stops back by The Business Brew to check in.  As you may remember, Ian is a full-time microcap investor and founder of MicroCapClub. Ian started investing as a teenager and learned from losing his money over and over again. Today he is a full-time private investor that supports himself and his family by investing in microcaps.  He is also the author of two books:

Intelligent Fanatics Project: How Great Leaders Build https://www.amazon.com/Intelligent-Fanatics-Project-Sustainable-Businesses/dp/0997576502/?_encoding=UTF8&pd_rd_w=7vP7f&content-id=amzn1.sym.22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_p=22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_r=140-2211477-9010244&pd_rd_wg=oufjI&pd_rd_r=438a9be9-ba2c-44c0-a800-30367bc020a7&ref_=aufs_ap_sc_dsk

Intelligent Fanatics: Standing On The Shoulders of Giants https://www.amazon.com/Intelligent-Fanatics-Standing-Shoulders-Giants/dp/0997576537/?_encoding=UTF8&pd_rd_w=7vP7f&content-id=amzn1.sym.22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_p=22f5776b-4878-4918-9222-7bb79ff649f4&pf_rd_r=140-2211477-9010244&pd_rd_wg=oufjI&pd_rd_r=438a9be9-ba2c-44c0-a800-30367bc020a7&ref_=aufs_ap_sc_dsk

Ian and Bill chatted because there was some noise about small and microcaps being cheap.  Then Bill said “Come on the show.”  And Ian said “Sure.”  And then they had this conversation.  And now you are listening.  We hope you enjoy!

This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund

Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Thank you to the team at ⁠thepodcastconsultant.com⁠ for producing the show.

Detailed Show Notes - 

2:50 - Staying patient in illiquid ideas

6:28 - The MicrocapClub conference

10:20 - Findings a micro cap worthy of holding

12:03 - Fallen angels vs rising stars

18:50 - Quality vs value

25:50 - What is Ian looking for in investments

28:20 - Look global for microcaps

30:20 - Why it is easier to raise money internationally than in the US

35:50 - SPAC talk

47:50 - Cogstate

1:00:30 - How microcap changed over the past year

1:05:50 - Training LPs, and yourself, to handle volatility

1:06:50 - Why the first discovery is powerful

1:11:30 - How Ian started MicroCapClub

1:13:05 - Some briefy therapy

1:15:30 - Concluding conversation

Devin Anderson, CEO and co-founder of Convexitas, stops by The Business Brew to discuss his firm's approach to risk management via options strategies. In short, Convexitas seeks to exploit structural options mispricing resulting from market participant's biases. What does that mean in plain English? Well, there are people that sell financial yield strategies that involve selling puts and selling covered calls. If enough of the market does that there is a chance the front month option pricing is not high enough. In that case, Convexitas might consider purchasing some of those options.

Why is Devin worth listening to?

In short, the guy is smart and you can learn something.

Enjoy the episode. Hope you enjoyed this show note!

This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.

Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Thank you to the team at thepodcastconsultant.com for producing the show.

2:00 - Devin's background

6:25 - Convexitas is a very risk focused firm

12:00 - The decision to reduce risk vs. manage risk

15:15 - What Convexitas is very good at

19:40 - Why an options thesis should start with the behavioral biases of the options market

24:50 - An options position should be better than a resized cash position

27:30 - If at any time short options strategies are changing your lifestyle then you should probably do less of it

35:00 - What about options counterparty risk?

37:30 - A discussion of one day options and why they exist (hint: they are a great business for market makers)

41:50 - How was Convexitas started?

45:10 - Does AI help Convexitas and/or is it a risk?

53:00 - It's not actually the risk, but how you manage to the risk

57:40 - The difference between financial products and investment products

1:01:25 - Performance under pressure and mindfulness

Michael Batnick, author of The Irrelevant Investor blog (https://theirrelevantinvestor.com/) and Big Mistakes: The Best Investors and Their Worst Investments (https://www.amazon.com/Big-Mistakes-Investors-Investments-Bloomberg/dp/1119366550) and Co Host of The Compound and Friends (https://podcasts.apple.com/us/podcast/the-compound-and-friends/id1456467014 for Apple and https://open.spotify.com/show/5VKsKPZUtwVylxslLie36k on Spotify) stops by The Business Brew for a quick chat.

In this episode Bill and Michael discuss Michael's book, his early days breaking into finance, his early investing style, and how he looks at the world now. They also touch on some personal chit chat at the end. Please note this episode was recorded before Bill's episode with Tom Gayner. Bill talks about Tom searching for ideas on the 52 Week High list. That part of the conversation is somewhat inaccurate and you should listen to Tom's episode for clarification.

4:50 - Mark Twain as an investor

7:00 Mike's background and building an online presence

13:00 - How Mike got through a bad first job

18:00 - Dealing with emotions while investing

19:00 - How Future Proof started

21:00 - How Mike approaches The Compound and Friends

24:30 - Helping Clients

28:00 - Why people should consider buying stocks that have gone up

35:00 - Stock chit chat

37:00 - Writing Big Mistakes

Dan Zwirn, CEO and CIO of Arena Investors, stops by The Business Brew to discuss his investing strategy.  Arena Investors, LP is a registered investment advisor that originates investments (generally below $50 million) with borrowers and other counterparties who need access to financing and are otherwise not able to access conventional sources.  They have complete mandate flexibility across industry, product, and geography.   

In Dan's words, "The real beauty of our approach, to me, is that there’s no ceiling on the creativity we can use to shape alignment for our clients, our partners and ourselves. If someone needs capital and there’s any way to do it that makes sense for all parties, we will find that way."

Bill enjoyed this conversation very much and hopes you will as well.   

Arena's Website: https://www.arenaco.com

Dan's Investor Letter: https://www.arenaco.com/wp-content/uploads/2023/03/Arena_Investors_Letter_YE_2022.pdf   

Dan's Official Bio: https://www.arenaco.com/team/daniel-zwirn/

Detailed Show Notes  

What Arena does - 3:30 

How big money invests at times - 6:30 

Process oriented vs. security selection - 9:30 

Financial Products vs. Investment Products - 13:10 

Why Arena has invested in servicing - 19:30 

The incentives to not see what is going on - 22:10 

Where are we in a credit/business/fiscal cycle - 25:00 

How Arena thinks about opportunity - 32:30 

How Arena thinks about LTVs - 39:05 

"We are at a casino and there has never been more gamblers" - 44:00 

Are defaults bad? - 48:00 

Does diversification solve all problems? 52:30 

A CLO discussion - 56:50 

What is going on with the job market - 1:03:30

Mike and Eli, hosts of Chasing Scratch: A Golf Podcast, join The Business Brew to discuss their podcast, how they monetize podcasts, what they were trying to accomplish when they started podcasting, and, yes, golf.

Tom Gayner stops by The Business Brew to discuss a number of things. You can see the detailed show notes for specifics, below the stratosphere.io sponsor copy. In summation, Bill has wanted to interview Tom for a long time but didn’t know how to make the interview unique. We think this interview covers some topics Tom has not discussed elsewhere.

Please consider attending Markel’s annual meeting. On Wednesday, May 17th, from 9-10:30 the good folks at Robotti and Co. are hosting an investor panel. There will be 8-12 “best ideas” presented. The Markel annual meeting will follow that event. Food, music, and beer will follow the Markel annual meeting.

We hope you enjoy this podcast episode.

This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc.

Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off.

Thank you to the team at thepodcastconsultant.com for producing the show.

Detailed Show Notes -

5:00 – The goal of the Markel annual event

7:30 – Tom’s background

9:35 – Blue capital and orange capital

17:05 – Creating dealflow and how long that takes

20:10 – Learning how to delegate

24:55 – What happened with the ILS transactions

33:20 – Searching New Highs and New Lows

38:40 – How investing at Markel does or does not impact Tom’s investing style

34:20 – The intertwining of Berkshire, Markel, and The Davis Funds

43:50 – The importance of relationships

48:40 – The Big Lebowski

49:10 – What traveling to India has taught Tom

56:25 – Decisions in March 2020 and how being at Markel impacted Tom

1:02:20 – How was the transition from Co-CEO to CEO

1:05:40 – How to be a deserving spouse

Book Mention:

The Way We Live Now

https://www.amazon.com/Way-Live-Now-Penguin-Classics/dp/0140433929/ref=asc_df_0140433929/?tag=hyprod-20&linkCode=df0&hvadid=475771750252&hvpos=&hvnetw=g&hvrand=16689022937612321338&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9011844&hvtargid=pla-469518675534&psc=1

Adam Wyden, founder of ADW Capital, stops by The Business Brew to share his investing philosophy, discuss some ideas, and talk about lessons learned.  ADW is a concentrated, long biased investment partnership founded in 2010.  In this episode Adam cautions against idol worship, talks about how he monitors positions and companies, shares his thoughts on management character, and much more.  Bill's favorite line from this episode is "Invest with people that have more to lose than you do."