YouSaid · the spoken record

Anne-Marie Peterson

lines on the record: 59
first: 2024-03-12
most recent: 2024-03-12
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Ever was, you've got a lot ahead of you. You're going to take my job. The answer is not no. Take you to meet the clients, you know, and saw Jennison and Fidelity and all of his friends. And he's like, and I'm going to be there for you, and you're going to be great. Had he not done that, I had no interest in doing this. But I love what I do. He said, this is what you're great at. Stop focusing on the things you're not great at. You're going to be great. And that's why I'm here. And there are a series of people that have done that along the way. My friend Greg once saw something in me, but that was the original act of kindness.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm going to focus on professional, just given that's the tone, because if I had to go to personal would be my husband, but I'll go to my professional story, which is my original boss, John Weiss, who was the restaurant analyst in Montgomery, who hired me as his assistant, saw something in me. And actually he and I just had dinner on Monday night. We still stay in touch 30 years ago, hired me as assistant. And I made his travel arrangements and marked up old-fashioned maps on how he should get to the different restaurants that he was going to go see the restaurant analyst to go see. Anyway, he promoted me twice once to his research associate, and I didn't even really want the job. And the second time when he retired, he gave me his job as a cell-sign analyst. And not only did he do that, I said, I don't want to do this. I want to go work in a nonprofit like I had traveled. I was like, this is not what I want to do. I'm not good at numbers. I don't see it. He said, you're going to be better than I.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Shareholder that has, I think, two having like a vision for a company is as important to us as sometimes to them speaking belief and power into what's possible. And there are just all sorts of like lovely knock-on effects too. So at the end of the day, I'm grateful. I get to do what I love.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“To me, about potential and saw a vision for me, and I just feel so grateful to be here. Like I would pay to work here, you know, I want to say I'd buy a lot of our meetings at auction. I'd pay for our research. And I learned so much from everybody here. And I love it. And I love getting older too because it's like you have more mistakes and scars. And I love all these talented young analysts we hire. Just paying it forward where you say, I see something in you. You're so amazing. The system, the whole point of it is just to find out what you're great at, put you in a spot to shine and believe in you. And just belief is so powerful. You're not always right. Just even the fact that I get to talk to you, it's not because of me. It's because of capital. Anyway, I just feel very, very grateful. And I feel like too else our industry, active management serves such an important role in the U.S. economy. And we're a long-term.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“You're inspiring meet Patrick. This is like bringing it home to capital. We'll go out and say, let's get expert X and to talk to us about Y or, you know, no, no, no, no. The most interesting people are inside and in the room. It's all here. You have three equity groups. There's three different investment management organizations and a fixed income manager. So you think about how many people are looking at each sector and each company have been writing on it for how long? It's mind-blowing. I could sit and read. I can just study these companies. I feel very blessed. I don't have the background to go to business school. I started as somebody's secretary.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And also, I mean, we went down and saw them in Nashville with the analyst in a couple PMs, and I just think that's fascinating. Like the Fris family ownership and involvement and the CEO is, wow, he is something else. He's a masterclass. I love these situations where it's like dark. They invert it. The advantage is the disadvantage becomes the advantage. Compounded earnings with 15% operating margins, consistent 15% ROIs of their hospital. They have the power. United has lower margins in HCA's markets, lower medical margins. Why? They have a specialist. They have the facilities. You can't build new hospitals or outpatients. This thing is power. I think they have power, but the history of the hospital industry and like how HCA became HCA was the family. Was it luck?”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Power business and all this AI stuff is going to need power. And so there's like a big electricity. There's that redoing of the grid that's probably going to happen, rebuilding of war-torn zones. There's a lot of reshoring. There's lots of demand. And the companies just become stronger. And they basically been in the demand desert for a decade. And so I love these companies. It enables you to do tough things. Home Depot coming out of the crisis. It can accelerate change. I just love to understand the history.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, look, Gigi Partesi, she said, There's this tailwind, she's worked their utility analyst Dominic Phillips. There's a tailwind from the Inflation Reduction Act. So the market is underestimating the GDP++ growth that could happen. And at the same time, under the current CEO, it's been removed slot since 2015, he has improved every aspect of their operation. We simplified their products, reduced the catalog of the products, he's reduced working capital, he's reduced the number of factories, and simplified every aspect of what they've done. He's simplified and streamlined. So incremental margins last three years, the top line has grown 4%, the free cash flow has grown 22%, have gone up. So there's no disruption risk. You just have a cycle, there's no competition really. I mean, there's Kamatsu, but like they've got brand loyalty and you've got three big businesses. They have a big...”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“AirMaz is a family business, they were disrupted or settles. You could have painted a case at the time. They're in trouble. Caterpillar? I just think the industrials are fascinating. Those things aren't disrupted. I mean, many of those companies have been around. I mean, think about it, their histories. They're like 100 years. Deer, I mean, even carrier 1910, I mean, these are enduring businesses that have gone through various iterations, conglomerate spin-offs. But if you and I wanted to create a Costco, we couldn't with all the money in the world, real estate, loyalty. We just couldn't. And if we wanted to create a caterpillar, we couldn't. Pretty dominant, big power business, big construction business. And they're kind of like the arms dealer to the global infrastructure build out. And you've got Kamatsu, but they're sort of behind. And it reminds me a little bit of Home Depot and that the analyst is.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“They have franchisees, this ecosystem. And the franchisees are always an added corporate, no matter how much money they're making. When I used to cover McDonald's, I'd go speak to the franchisees and I knew a bunch of them and they're killing it and they're just so mad and it's not good enough that that like tension of two owners with the same kind of objective is unique and love that about it because I feel like that's a hedge that they're going to get to the right decision because you have so many eyes on it almost like our system for something to rise to the top of the egg McMuffin to go everywhere in the 1970s. By the way, McDonald's is a big breakfast business. Breakfast is a habit. That's like an annuity.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“The similarities are like real estate matters, store experience matters, but in a tight labor market, it's tough. And what's interesting about McDonald's, such an affection for that company, it works everywhere. They have one concept. I think it's 60 or 70% of their operating income is from rent. They're a landlord. They control the real estate. The others didn't. So that's why they've endured. They had a big insight about like, let's own the real estate so our franchisees don't get whipped around with pricing and we can co-invest with them and the experience. And now digital, the mobile ordering is enhancing the productivity and reducing even those kiosks that need for labor. And in a tight labor market, it's big. The little guys can't invest. They have some external dynamics now that are contributing to scale. But what's really interesting, I mean, even with McDonald's, like if you look at all their good ideas, the franchisees have come up with, it's almost like Shopify, how they have that partner ecosystem.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“In the game, own eight units, and corporates taking fee for rent and sales, but they care. That is why when Chipotle came along, oh my gosh, it was really special because you're like, this is the one company operated chain that's going to be able to scale because you have a founder who's obsessed with this mood with integrity that's fast. He's addressed simplicity. He's addressed all the problems in the system. Simple menu. You don't have 20 items on the menu so anybody can kind of do it. Inverted pyramid, store managers made more than the district managers. Why do you need a district manager? Because there's a problem with the store manager. So make them the entrepreneur and owner. And just incredible unit economics. I mean, these things are like ATM machines. It's insane. He's just like capitalizing the zeitgeist and build this cult like following. So restaurants are different from retail because it's not as easy to scale. There aren't a bunch of large cap restaurant chains unlike retail. The franchise model is pretty powerful and what Chipotle has done is pretty powerful too.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, what's interesting is the restaurants are different from retail because they're very hard to scale. Why is that? It's because the labor and the customer experience happens at the unit level versus corporate you're buying inventory, you're allocating it to stores. A lot of the big decisions happen. Yes, you have to keep the stores clean. From on high, getting that right and then adding the service, but you're making the food, you're delivering the food, you're greeting the customer. Restaurants would run into a problem. Actually, my first boss was a restaurant analyst, did all this primary research for him, but he always said, this is the number where they can't grow beyond because you can't hire that many good managers with 20% turnover, grow the units. Retail, there are no such constraints. That is something that just naturally can't scale at a company level. That's why the big ones are franchisees like McDonald's. You've got like a collection of people that has.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Rate duration is longer and the quality is greater. And so I think PMs have these shorthands to like, we don't know. So we're like, okay, I'll not look at that. I'll not look at that. I'll not look at that too expensive, interesting, cheap. So I think using valuation as an excuse to own or not own something at extremes is fraught with error.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's something special happening, getting caught up in the fray. I think also PMs, I've definitely sold at the wrong time because I've given up on something and I don't understand it. As an analyst, PM, you're going through a middleman, which is really powerful. And then there's no friction because you can just sell something and move on. You don't need to publicly admit your mistakes. And I think PMs have biases, have not owned Google because I'm just advertising saying the same thing. Advertising is a low multiple cyclical business. It's just like missing the point. And also being afraid sometimes distinguishing this is the other thing on valuation with PMs. This is my view on valuation. It's a price quote. It's telling what you need to get right. If it's 10 times earning and saying there's something wrong with the quality, the duration, the rate, you're really paying 30 times. And if it's 50 times earnings, so often there's something that's really, it's either going to earn a lot more or just that.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Number one, and number two not seeing something for what it is miscategorizing it something for what it is. I've seen it in multiple cases. I was very guilty of this. The off pricers, one of the PMs was like, oh, these are great businesses. I said, no, the math does not work. The spreadsheet math, because you miss the vision of what's happening. The department stores are this big. They buy their goods from the department stores that they don't want and they resell it. For the stocks to work, they have to be as big, if not bigger than the department stores. What I was missing is they were becoming the department stores because they were getting their own goods. They were upgrading their stores. I didn't see it for what it was. And so I had a stale voiceover. Things change. Companies change. Positions change. Sometimes it's just lack of imagination, pushing yourself in as a PM. So many mistakes you make, misunderstanding early, just kind of rising tide lifts all boats to”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Really, just psychologically hard back to like the culture that we try to create and the space that we try to create for mistakes. So I think that one, just the mistake is even when you know you're wrong, the cycle time to admitting that you need like multiple data points. It's sort of death by a thousand cuts and then it occupies your brain power. And I think often it's what for me wet to a person. And I was like, no, but that person's so great. I can't be wrong. That person. I think the analysts are slower to recognize change that is bad for the thesis. It's just the nature of it, but it's okay because there's friction back to this concept of friction. There's friction to buy an idea and there's friction to sell an idea because when you buy, you have to come in and say, bang, this is what we're doing. And when you sell it, you have to come in and admit your to a lot of people. It's not just Patrick Ann-Marie Capital Management. It's a big thing. So I think that that's hard. And I think also that.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the analysts get attached to their ideas. One of the beautiful things about our system is it's an inverted pyramid. Really, the analysts are like the intellectual capital. They're kind of the kings and queens because they see the industry. They kind of can see the future. They kind of put ideas. PMs just, what do I know about this new technology? But I have pattern recognition about people, about business models, about growth cycle phases. So I think where the analysts can go wrong is you get wed to an idea. You go out there, you have to say to the PMs, we're doing X. And there's just this human aversion to being wrong, especially publicly. 70-odd people in our group, you decide you're selling something, Kroger was a mistake I made a long time ago when I was an analyst. You come in and you're like, guys, I know the ideas to buy low and sell hi. Here we are. We bought high and we were going to be selling what's going to be look like low, but you have to come in and admit you're wrong and people don't want to do that. And because it's just really.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's totally true. But back to simplicity, I do think that's the story that's just never changed around the edges. For a while, I was like, oh, let's own MasterCard. I thought MasterCard was more interesting because the management team and it actually been the same. It's the same thing. Dono complicated it.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“As long as they're managing the scarcity and the desire, Nike versus Hermes, not a question in terms of duration. So that brand power is really rare. Costco has power over their supplier because they have two SKUs. I love it. They use the force for the good. I think they kick Coke out for a while because they have Kirkland. They have private brands. They have their own factories. They have their own chicken factor. I mean, it's just crazy. But they wield it for the customer. I mean, I can't say I think Visa wields their power for the customer.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“They've been battle tested. That's worth so much. A lot of people look at the future and say, well, how fast is it growing while these debates? I say, I don't care if X is growing slower than Y, I'm going to pay more for the history. I've seen that company battle tested three times, emerge stronger every time into it, synopsis cadence. Like those companies were all born in the 80s. Microsoft tried to kill into it tons of times. They're still thriving. There's something there. suggests power. And I do appreciate when the power dynamics are changing. I think back to the healthcare thing, that just matters. Have you read that book, Seven Powers? You have to sort of respect it, watch for it, look for it. The luxury goods companies, I don't know about the culture. Yes, it's like all magical or whatever, but these brands have been around since the 1800s and you can't disrupt.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Attacked from multiple different angles. I mean, every angle you can imagine. And what happens to Visa? Absolutely nothing. They're still relevant. They still grow. In that case, that's enough for me. I'd learned, and it's a little as media older, become a little softer about rigidity around things and black.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's yes and I'd say I think the power dynamic matters a lot in an industry. I mean, look what we saw in tech. You know, Apple decides they change the rules, IDFA, and all of a sudden like Facebook and Snap have to refigure out how they're going to target their customers. Have you understand that simple point of who has the power? I personally underestimated the power that that ecosystem and that handset had. It's the mall. It's the device. They have the power. They can say yes, they can say no. I think it's an and the thing that's interesting to me about Visa and why after the crash the gross stocks went up, they went down. And then I said, okay, what have we learned the last decade? To your point on this, it really made me appreciate power. We've had 100 meetings with Visa. Nothing's been particularly like wow, inspiring or magical. But what we have seen is we've seen payments.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“The government can decide here's what we want to do, and we've seen that happen. United was an incredible investment for a long period of time because they had multiple waves of growth and the government was supporting it. Big pharma is more interesting than just as a broad statement to me than big tech. And this is back to the imagination, you know, what's Lily going to look like. If I were running Lily, I would definitely be figuring out how to invest my winnings into having more control and power.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like pharma is now striking back. Scale might matter. It wasn't a biotech back to the power of the incumbents. You'd invest these biotech companies that's sort of like, well, we hope it hits. We hope it passes this trial, that trial, that trial, that trial. It's really hard. So if anything, my view is this, of course, could be wrong, but just to answer your tech question, there were dynamics that let the big get bigger like in social media with Facebook and Google you needed scale the bigger you were that enhanced the social media experience the search experience and the investment like think it might be happening at pharma it's really interesting but i don't know i'm out of my league and what's interesting too in healthcare like tech you know everybody worries about regulation oh god you know government cannot let them do this or they not do that in healthcare like the government's united's customer”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, what I think is interesting is I just wonder in healthcare if some of the dynamics that play out in tech, fewer, bigger, stronger have these dominant platforms aren't emerging. Eli Lilly has Lily Direct. We just saw them like a month ago. That's fascinating. That's so fascinating to me. Why does United get to decide who gets the drug? Government can do whatever they want. They can contract with Lily. United built optum health so they could like hedge their HMO business and leverage that. I don't know. What are they going to do with all this capital? It's crazy. I mean, and they've been working at this for a decade, a decade. You know, a decade ago, they were 12 times earnings in Pfizer was at 12 times earnings. They've grown a ton of multiples, higher Pfizer hasn't grown multiples lower. It's just a reminder of within a sector what's mattering over long periods of times there can be these divergences. So what I say is I just wonder if there's a pocket within healthcare.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“His superpower is products, and he's walking around the office right now with the Apple Vision Pro. So he just pictured it.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Obesity, other diseases, Alzheimer's. I mean, it's pretty fascinating. And unlike other drugs in the past, there's a moat for generics, which is the manufacturing. It just makes no sense for a generic company to try to, they can't invest or copy. And I mean, even vertex and their cystic fibrosis business, they've got a process that lots of generics have tried to copy the drug and can't. So they've held on to that cash flow stream after the patent window expires and then they're investing and they're creating new things like pain. So what I think is interesting about that is pharma is such a tiny part of the pie and they're actually now preventing up front these drugs that are emerging but can solve lots of problems up front and they have a long, assured tale of a patent without generics and possibly addiction, Alzheimer's or other applications.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Companies. Hospitals started employing doctors and consolidating. And so the med tech companies, their pricing was pressured, their volume was pressured. And so a lot of just like needless activity was coming out. But it really crushed the hospital industry and the med tech industry. A couple companies within that emerged and got stronger, HCA is hospital. That stock's like a 25% compounder for a decade hospital because they dominate these local markets. And then a med tech, Boston Scientific, the industry structures improve their skewer and they have more power and they're innovating and they're solving problem. So now pharma, where's pharma's 10% of healthcare spending? And they take a lot of risk. They have 20% of sales is R&D. They have all these pipeline cliffs. And the government's like always pressuring them on price on MeToo products. But farmers also consolidated. And now innovating, which is really interesting because Eli Lilly with the G”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“What's interesting about healthcare, I'll give you the kind of the healthcare narrative, having watched it for 15 years and our analyst. Regulation that basically they can be inhibitors or accelerants of change. Unlike tech, you just need a new product. Go. Adoption happens. That's something to respect. But it's fascinating because what you've seen, and I'm going to go back through the history because I think it helps us understand where we are today and the potential opportunities, is when the HMOs came to place fee for service because healthcare costs were out of control, the payers had the power and the government sort of accelerated that with Obamacare by Medicare Advantage. All these HMOs basically controlled who got access to what and they keep the spread. So first place they go. Hospitals are the biggest chunk of health care. It's 40% of healthcare spending. And that was egregious. The first place they go is they just cut the hospitals, the volumes, the price, go to outpatients. They whack that. And that hurt the hospitals, suppliers, the med tech companies.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“To stick with us, so be patient. There's a habit in these retailers. And Costco, they have earned the trust of their customer, paid a shop and a warehouse with a limited selection. They can do anything almost. They're so disciplined. So when you earn the trust, you just kind of keep getting more and more of the pie. And the bigger you get, the easier it is to grow in some cases.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Versus the culture, but the leadership sets the tone whether you can unlock the culture or you splelch it. Then just open up stores, kind of grow. There's a habit element and we met with Marquessey covered, my colleague was he did the internet company, so he covered Amazon and I did the retailers. And like during this time we're figuring out, okay, wait, Amazon might be poison to retail and there might be really something big here, we were visiting the companies together and we had this meeting with Jeff Bezos that I'll never forget and this was in 2010. Mark said, I don't need to be ungrateful, but I don't understand given how great this is, why your retail business isn't growing faster in these new categories. And Bezos said to him, let me tell you something. Habits are really powerful. They take a long time to change, but when they change, they're very hard to disrupt. We're working on changing habits, but when they do, they're going to...”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Her deli did not, and he was able to address all those problems through simplifying, through focusing on a couple of the right things, through unleashing the culture. But I think retails and industry where you have a clear customer, you can see them, and you have these store employees. So you have to mobilize them to care about the customer in a corporate if you can buy properly and be disciplined on the values. When you do that, there's just such loyalty and persistence. There's a habit in going back. And then you earn the right. You have trust to sell other things. So can compound and retail is the classic flywheel business. Comps one year for money to invest in the value proposition, which means widen your value gap of the next year, your dominance just grows. So it's a classic compounding, but you have to stay true to the discipline. And the people are really important. You know, you and I had a discussion about like the people.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Was abusing this, and he said, Bernie Marcus had this bad experience with a dishwasher delivery at one point. He was getting upset. And he basically called and said, he's abusing my child. We always stand by our product. He doesn't get what we're doing. It's got to stop. He's got to go. So Frank Blake comes in and he recognizes he knows nothing about retail and a stack of 100 resumes. You'd never pick him for the job. He was hired by Nardelli. He was like a lawyer at GE doing M&A, bad deals for Nardelli. And he said, first thing we're going to do is have Bernie come back and talk to us. Second thing we're going to do is throw the stores at Keg Party. What sort of freedom do we want to allow, even though maybe some bad stuff had been happening with that? And then the third thing we're going to do is we're going to start bleeding orange again, bleed orange. We have a motto. He had something to tap into. It was latent. He was waiting for Superman. It was just there. It just needed a leader to come back in and say, I get the magic.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is like in 2008, Frank Blake had just come in. I was sort of dismissive. He drove me around for an entire day to look at stores. And he explained the history. But one of the things that happened why Frank Blake was so powerful. And he said, look, the whole catalyst, like we thought we hired in our deli because we thought we had to fix systems and process, which we did. But the cure was worse than the disease because he added all this complexity and reports. He didn't go to the issue and he didn't understand the culture and the cult. So he stopped no more store parties with kegs. The lawyers got involved. This was a company that basically hired ground up like Costco. Employees got stock options, made the average American rich. He's like, this is what we do is our purpose. It's our customer. It's our employee. We want to give these people opportunity. That's America. Ken's from an immigrant family. It's America. We have to give opportunity. And he said, Nardelli.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“They believe in simplicity. They say, no, we're not going to do that. Complexity is cost. We're not doing that. And then I went to see them in Mexico. We went on a sub management there in the UK. They all dressed the same. They're like in a uniform. They all look the same. They're in like a blue Kirkland button down, even though they don't have a uniform. They all speak the same. They all speak in the same language. There are these rituals. Cults have rituals. They all fly to Seattle once a month. They all have been doing this forever and ever. I mean, not much has changed there, but there's just they won't mark up, gosh, darn it, the hot dog's going to be $1.50 no matter what. So I think there's this element of cult, even with Home Depot, they all have some sort of obsession about the customer experience, what they do and why it matters. The way I got interested, and I'll tell you the story because this is like another, why the cult thing matters, is somebody introduced me to Ken Lango and when I picked up the large cap retailers.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is stealing from my colleague Alan Wilson. He said it perfectly, and I covered it a long time, but when I was an analyst, we went to see Lululemon together. This is after a couple years after the IPO. And we get back, and he's great at analogies. He's a creative thinker. He's so fun to talk to. I would pay to listen to him talk about stocks and companies. He comes out of the meeting and he goes, huh, I get it. The best retailers are cults. This is a cult. And I was like, it's kind of true. Okay, so Costco, is Costco a cult? And I meet it in the best sense of the word, but it is because all their management started at the store. They don't recruit from the outside. They are corporate. They don't even question the 10% markup. No one does. It's like religion. You go visit that company. It's all stuck. E-commerce, maybe someday. They're still way behind. They're killing it in.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, letting others own it and focusing in my area. We were talking about the last cycle in 2000. Cisco was the darling, and I was looking at the 2000 Cisco annual report letter. It sounded like kind of Not Cisco, Amazon, because they were solving a need. And then Microsoft, the big incumbent, again, power of the incumbency, comes in and is number two. Who is the hardware form factor? Apple, not Palm, not Blackberry. So I respect that that's probably within those big companies. There are some winners. I also think it's ripe for a loser. You have to be really careful.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Retailers, some large ones kind of just okay to make the yeah, we deserve more margin. Walmart scores margins went from 20 to 25% over 2,000 to 2010, even as grocery went from a small part of the business to most of the business. How did that happen? Not okay with that. It just doesn't square. If I had more confidence and the focus on the customer and the willingness to restrain, I'd feel better about the duration. I own Netflix for a long period of time through ups and downs just because basically I got there with Reed Hastings, who's battle tested, and I trusted him. But I have other situations where I know myself now, if I don't trust, I am selling at the bottom. I've done it many times. I've got little doubt one little thing goes wrong. And I'm like, oh, so when I have a little doubt, I'm okay. The great thing about capital, lots of other people have different opinions on these stocks.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fervor back to culture. He's not about his money. I want the ecosystem to make more money than we make. I don't really hear that from the big tech companies. I'm interested in durable duration. There's some element of we're undercharging and over-delivering in every single possible way. I was recently visiting Costco Verianala Cachen and she went back to remind me the culture. And so Richard Gallanti, the CFO, pulls up a video of Jim Senegal talking about Gloria Vanderbilt jeans. They got 1980. Their markup's 10%. And so he's like, we're going to sell the Gloria Vanderbilt jeans. The price is $29.99, even though they were selling for like $80 at other discounters. And there wasn't even a question that you just market up 10%. That's that. That is what I want. I have to trust as an investor that the management team is going to do the right thing and not cheat. I watch too many.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“It was expensive. Shopify can update things and launch a product, no problem. The global market for IT spending, Enterprise IT spending is like $5 trillion. For commerce, it's $6 trillion, and there are plenty of billionaires that have made their money in retail, the luxury. So we're just talking about this. Why wouldn't it be that? Shopify has $7 billion of sales and a billion dollars of operating profit. And I think Microsoft is somewhere in the $70 billion of free cash flow. Toby, super special. I mean, talks in 100 year terms. It's almost uncomfortable. And then all of his principles, and he's just maniacally obsessed with a customer in this experience in a way that I am not sure is happening at these other big companies. I mean, he's maniacal. You want almost a religion.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Over the last five years, only five percent of the actively managed growth funds beat the index, of course, because you had to own all of that. I try to just keep it really simple where I feel like I have a degree of just simple understanding. Shopify, you've done a bunch of work on that. I think that's fascinating. This is the time to be imaginative and have a vision. We want companies to do that as investors. We need to do that. And it's really fun. And okay, this is a crazy idea. If Shopify wants to be the global operating system for commerce, are they Microsoft 30 years ago? Microsoft was the operating system for the PC and the enterprise. Hmm, how big could it be even better? Maybe. Microsoft had to hire the engineers, Shopify has their own, and they also have a partner network, as you know, that develops product. Microsoft had to ship out the software.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Own those, but just even on like Google and Meta, I go, those are advertising businesses. In the offline world, advertising is a low multiple cyclical business. Maybe that won't be the case here. And then what's Amazon going to do now? Amazon's saying, okay, we admit we can't make money in our core e-commerce business. Totally admit it. We got this strategy. We're going to monetize it across advertising. So these things go through when you say, is digital advertising overcapitalized or undercapitalized? There's an argument it's growing the market. There's an argument there's high returns, taking share. But I ask where are the cracks in the armor three to five years from now? That seems less clean to me than backing Jensen, what he's been doing for 30 years and their dominant position. So then I say, what are the less obvious answers to what you said? These are already big and dominant.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“My simple framework, very simple. Who's spending money and who's going to get the money? There's this big wave of spending happening and there's this one guy who's got all the goods. Nvidia's got the goods. The other guys have the demand and they have the balance sheets. They have the cash flow to buy and they have use cases to get an ROI. Sounds great. For the next couple of years, if they're going to be buying, I know who they're buying from Nvidia. I don't know if they're going to get a return. One of our colleagues, Annie Rudd, Samsay, asked this provocative question two years ago and he was like, could AI be asbestos for Microsoft? Wow, that's a provocative question. We own a lot of Microsoft. Logically, on paper, it sounds good, but I've been in a situation logically on paper where, like you said, they're consensus longs, and sometimes the consensus is right. But what I think is more interesting, what's great is we can.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Then there's the meeting where, like, something's going wrong. And in that case, maybe you plant somebody to ask a tough question if you as an analyst feel like, oh, it's too much. Can you ask the question about why did they do that deal? When are they going to cut the cord? So there are even these little strategies. It's a thousand little details that go into what makes something great. The end of the day, what matters having a little fun and unlocking the human condition because life's too short not to respect that, appreciate it, acknowledge it. I mean, we spend so much time working. Gosh, I don't want to do this if I don't feel like I'm able to connect and make something better.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Has trust and we have these long relationships. I tell the analysts too, look, also these meetings are like dinner parties. There's the dinner party when your like in-laws are over with your parents. That's one thing. There's the dinner party with like college friends. That's another thing. There's different music. There's different seating charts. There's different topics for discussion. There's a different vibe. And there's a different time frame and there's a different amount of alcohol served. But you have to understand. So if your objective is an analyst, you're in a meeting with a PM and I remember doing this with my holdings. I was like, all right, I get everybody into it, but you're like, okay, now they need to hear it from the horse's mouth. You just ask the three things that matter. You already know the answer. You've done all the work. You've had all the discussions. The PMs need to hear.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just could feel her energy of tightness, and it was just so different, but I just like, are you sure you're the right person for this job? You're so talented. You've had so many incredible accomplishments, but you've put yourself in a totally different position. There are wartime CEOs. You kind of need to be the right person for the right time. I didn't say the budget said when you look at yourself in the mirror in the morning, what do you think, highest and best use or wrong fit? And she was just stone silent and she's like, it's a really good question I'm contemplating. We don't like making people uncomfortable, but there's a loving way to want to see people. I'm obsessed with this David Brooks book. He just wrote The Art of Being Seen and Seen Deeply. Others. And I just think that there's so much of an unlock. But like you can only do that if you have trust and our institution.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“The why, and I also think just we're in a privileged position where we're not activists, we are long term shareholders, we are their partners. So one figuring out what matters to setting the tone, having a little fun. And then three, I don't know, there are lots of good ways to get at what matters, but there are also lots of good ways to get at persons. I can't say who it was, but there was a CEO who was running a company and she'd been very successful in like a bunch of other companies. But she was in this situation where it was like kind of a turnaround. And you could just tell, but it was a big job.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Wasn't a compliment to start laughing, so you have to inject some humor. It was pretty funny. And then the meeting was just great. They opened up about everything, all the problems. It just set the tone. You sometimes need levity. And I think that's really important. And I think using the meeting too often, I say, especially with CEOs or the leaders at times of change, to kind of understand why are you doing this, what motivates you. Just simple question. It's powerful if you ask that. It unlocks a lot because we have to understand”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source
“Things that matter having strategies to keep poking at it, and it sounds random, but I love listening to Howard Stern interviews. I think he's one of the best at running meetings. He'll poke Chris Martin. What's it like to have everybody hitting on you? Backs off, and then he'll kind of circle back in with a different tack. And before you know it, they're just openly speaking. Do you want to create the conditions? And part of that is just recognizing we're just chatting here. We're just having a chit chat. What's it like to be you right now as CEO? A lot of these executives program. They're humans. My gosh, is this like a hard, lonely job? And what's that like? And so I think just setting the stage for what matters, but then having some fun. I mean, my colleague, Greg Wenn, one of the first meetings I went to with him was a little small cap retailer and he walks in the meeting a little late and there was two women see.”
2024-03-12 · Invest Like the Best · Anne-Marie Peterson - The Capital System - [Invest Like the Best, EP.364] · IDENTIFIED FROM THE TRANSCRIPT · source