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Derek Pilecki

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54

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2025-10-03

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2025-10-03

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1. “The 22 Carlisle had lagged its peers, and it was at 10 times earnings. And we had a CEO change as a catalyst. People look for catalyst. I think CEO changes for underperforming stocks are generally good catalysts or can be good catalysts. And so I thought there were some easy things that Schwartz could come in to do, especially since I thought Carlisle's expense structure was too high. I bought the stock and I think I paid $29. And here trading a little less than three years later at 65. So it's been a double in three years, I guess. And an example of something that hasn't worked or maybe hasn't worked yet because we're not the three years is I bought PayPal 18 months ago, cheap value stock. A lot of value managers own it. Valuations come way in. Again, CEO changes Catalyst. Alex Chris came from Into it. He ran the QuickBooks franchise. I thought he could refocus the spending internally to focus on three core products. And it started to work. They had a hiccup.”

   2025-10-03 · We Study Billionaires · TIP758: Current Market Conditions & Investment Opportunities w/ Derek Pilecki · IDENTIFIED FROM THE TRANSCRIPT

2. “So, I mean, that rule of thumb of a double in three years, sometimes it works out faster than you expect, and sometimes it doesn't work out at all. So I guess I want to give you both good and bad examples of that. And so if so, like I own Carlyle, Carlisle private equity manager probably underperformed its peers since it's been a public company. They botched the CEO transition from the founders to the next generation five or six years ago. I did a second attempt. They hired the former CFO of Goleman, Harvey Schwartz to come in. And so at the end of 22, it had really underperformed KKR and Blackstone and was trading for 10 times fee related earnings, you know, just exiting out the carry, just what do they earn on their management fees. And I think Blackstone was like 22 or 23 times at the time and KKR was at 17 times. At the end of the year, I just like to look at different sectors of like what stocks have flagged the sector and is there a reason? And I noticed it danced.”

   2025-10-03 · We Study Billionaires · TIP758: Current Market Conditions & Investment Opportunities w/ Derek Pilecki · IDENTIFIED FROM THE TRANSCRIPT

3. “Do well when the big stocks underperform to get reversion of the mean, or will everything go down and the big cap stocks will just go down more than the small stocks? I don't really have a good answer. I don't know how this seems like we're getting the effect of so many passive flows into the spy and all that money is going into the S&P 500 stock. The Russell's lagged for years. All these mid-cap stocks don't really have sponsorship and they have cheap valuations. I don't know how that gets resolved, but I think over time I've just gotten comfortable if I own cheap stocks, good things happen. And so I'm not looking at my portfolio and saying, oh, I wish I could sell this stock. I wish I could sell that stock. I still have an idea list of things to buy cheap stocks that look interesting. So I don't know exactly how it's going to play out, but I'm not running for the hills, but large cap stocks look rich to me.”

   2025-10-03 · We Study Billionaires · TIP758: Current Market Conditions & Investment Opportunities w/ Derek Pilecki · IDENTIFIED FROM THE TRANSCRIPT

4. “Think the story over the last three years is how navigated in Silicon Valley and First Republic's failure is pretty well in 2023. It was underway regional banks. After they failed, I drastically increased my weightings in regional banks. You're just doing a lot of work on where the deposit franchises intact across the country. And the valuation's got extremely cheap. That was one big driver of returns over the last three years. I worry about the same things that you do. Like three years of strong returns, is it over or do we have some reversion to the mean? And when I look at the overall market, I mean, it looks expensive to me, like generally just as an observer. And even within the financial sector, I look at the very large cap stocks, JP Morgan Progressive Visa, they look expensive to me. But, you know, then why I look at a lot of small mid-cap names, they're single-digit PE still. And so how does that resolve itself? Like, can these small stocks?”

   2025-10-03 · We Study Billionaires · TIP758: Current Market Conditions & Investment Opportunities w/ Derek Pilecki · IDENTIFIED FROM THE TRANSCRIPT