YouSaid · the spoken record

Joseph Shaposhnik

lines on the record: 72
first: 2025-06-20
most recent: 2025-06-20
sittings or episodes: 1
sources: podcast

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“Go through what they go through. I think Buffett talks about how Berkshire has declined 50% on three occasions. And the average company can go through that type of experience. And it's hard as an investor to sustain that. But I think you need to be able to generate great returns over long periods of time. So those are the reasons I think the industry is broken. And of course, with rainwater, we're focused on a strategy that we think mitigates the problems of the industry and we think will generate very good returns as we have in the past for long periods of time. And that for us is a focus on only investing in recurring revenue businesses, only investing with exceptional management teams and holding stocks for the long run. That's the key. And that's what we think will differentiate the strategy.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“That's before fees. Let's say you throw a 1% point fee on top of that. The investor to starting off with a 2.8 percentage point deduction that the fund manager has to then overcome. That is a huge burden. And I think one of the reasons the industry is suffering and is broken. Clearly with the ETF mitigates the performance drag from taxes and trading. And that's, I think, a huge benefit to investors. And then in general, I think that professional investors engage in too much trading and they don't allow their ideas to compound and management's great execution and the business models to grow over time. And that really requires a lot of patience and it requires, I think, the ability for the investor and the advisor to suffer as businesses.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“The importance of business models, growth rates, large markets, and the like. And so there's this error that gets created because there's an underappreciation of the importance of management. We think it's very, very important. I think also in the mutual fund industry, and I came from the mutual fund industry with my background, Fidelity, TCW, and those incredible places. The mutual fund industry has created a situation which is very difficult for it to surmount. And that situation is focused on fees and taxes. The average mutual fund in the United States creates a performance drag of 1.8% because of the taxes created by trading. So every single year, the investor starts out in an actively managed mutual fund with performance drag of on average 1.8%.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Management decided to do an acquisition that we thought was value destructive, so we're going to sell, or management decides to enter a new industry that we think is a low return industry and is risky. So we decided to sell. I think that the industry underappreciates the importance of putting management up front as one of your most important criteria. We're focused on investing in good businesses and in growth rates and in these hot markets that we're going to grow for long periods of time and the earnings are going to follow and everything's going to be great. But at the end of the day, for all of that to work out, you have to have phenomenal people that are executing the business model and hopefully doing that in a way that will create value for shareholders, not doing it in a way that creates value for them and not value for the shareholders. Hopefully those two things are linked. So I think the industry underappreciates the importance of management and overappreciate.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“That approach is so flawed and challenging to execute, and I think that's been proven. We don't take that approach. We don't think you need to have an opinion on each individual business in an index, and we don't think that's going to work. I think the other key element that is underappreciated is a lot of fund managers look at investors, they evaluate a situation, they evaluate a business, they evaluate the multiple that you might pay for the company, but they miss the importance of evaluating management. And you hear about this all the time. You've had just a legendary investor who was on the podcast not that long ago. He reminded me of this concept where phenomenal investors, they have great frameworks for investing in companies, but oftentimes they have to sell because the idea isn't working. And the reason they give for the idea not working is, well,”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“A year later, it goes to show how difficult the industry is, the businesses and the business of forecasting stock prices. And from my perspective, it reinforces our general view that most stocks can be predicted. So let's just focus on that narrow segment of the market that can be predicted. And we think that's recurring revenue businesses. That's why we have that view. I think the other reasons the industry isn't working is that there is this overconfidence in being able to forecast the benchmark constituents if you put enough brain power behind that. And then as we kind of talked about initially, the view that you must have an opinion on all of these benchmark constituents. And then let's underway to overweight each one of these constituents to build a portfolio.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Stock went down 50 in 2022. 50%. Over that period of time, management sold, I think approximately $3 billion worth of stock. This is 2022. This is not like 10 years ago. This is not 20 years ago. This is in 2022. Management sold $3 billion worth of stock as the stock was going down 50%. One year later, NVIDIA was up tenfold. It was up tenfold in one year and management had sold $3 billion worth of stock, not like 10 years ago, one year prior. And there's no doubt this is one of the smartest management teams in the world. And they had a sense for where orders were going to be, you would think a year or two years out or even six months out. And they did not know where the stock would be.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“In teams of MBAs to research 500 businesses in your benchmark and then hope to make a decision on each business, this is an impossible construct. And that's what most of the industry does. And I firmly believe that that is a recipe for not success. The recipe for creating that 90% failure rate. Because from my perspective, most businesses can't be predictive. If you deploy the best MBAs from the best schools, I think the data tells you that they can't outperform and predict where businesses are going to be. And just as an example, as an aside on the topic of predicting and why we go about investing the way we do, it's so difficult to predict the future of companies. Perfect example. If you go back to 2022,”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Over time by implementing the approach that I had been implementing for a number a number of years. And I wanted to be able to communicate that to investors on a regular basis and in an unfettered way. And so when I look at the industry and why these thousands of funds underperform to me, it comes down to a couple of key elements. The first one is that most fund managers are obsessed with their benchmarks. And so they spend all of their time making decisions relative to their benchmark. And that obsession, I think, causes them to miss a lot of great businesses and creates a dynamic that is nearly impossible to succeed in. If all you do is spend your time hiring teams,”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“I had a great time and great experience at TCW. The reason I left is I have the firm conviction that the actively managed equity business is broken. And it was my passionate desire to create a business and a fund that people could believe in again. In the industry, generally, you know, if you look at the data, the average mutual fund, I think 90% of mutual funds underperform their benchmarks on most measurable periods one year, three year, five year, 10 year since inception. I mean, that's a huge failure rate to, you know, 90 plus percent failure rate. And I had spent a lot of time in the industry. And I think I understood the reasons for that failure rate. And it was my passionate desire to build a fund that could help advisors and individuals outperform the market.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Most certainly, I mean, he's getting up and he's got calls going on with his team of analysts. He's all over Bloomberg. And God does he know his business is like nobody else. It was so apparent”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“That come out that are great businesses that are underfollowed, that have had great track records. And those are great opportunities because the market goes through a discovery process and you can get ahead of that discovery process if you're doing the work and you're reading the prospectuses as the businesses come out. Most of them are not great, but on occasion you find these great businesses that are early in their life where you can start to compounding process very, very early. And so that's an area he was focused on. That's an area that other great investors have been focused on. And certainly that's an area that we focus on. So it was a great time with him and a lot of lessons learned and a lot of lessons reinforced.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“That are performing really, really well. Well, he took the opposite approach. He was willing to go to businesses that were not performing well because I think he thought there was a lot of upside. So it was an incredible day with him, the nicest person you could ever meet, so engaging, so focused on family and spending time with family and just a pleasure. I think that other interesting aspect that was common between my experience with him and Will Danoff, both of which are incredible investors, is not just to focus on small caps where there's a lot of opportunity, but where we've had success and they've had success and have been great advocates is to focus on new issues and the new issue market. So the IPO market, there's a lot of opportunity in IPOs, and maybe we'll talk about that later on in the podcast, but there are a lot of business.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“And he was very interested. He was looking at it. He probably had invested in it. And he was spending time interviewing the new CEO, the interim CEO, and talking about the situation and very interested in how that turnaround might materialize and take place. And I think that's very interesting because when you think about the books and the lessons that he shared many, many years ago, one of the lessons I took was to wait for the fundamentalists to turn before you make the investment. In this case, he was kind of going ahead of that and investing ahead of the turn in the fundamentals or the turn of the management team. So it was interesting to see him step into controversy, which I think is very unpopular these days. There's a great popularity and a focus on quality investing and investing in business.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“It was such an interesting discussion, and his framing and the way he thought about compounding was very much oriented toward these types of business models where you can build it once or twice in a local market, see if it works, and then scale it up very fast. I think what was also interesting was from my perspective being a quality investor was interesting to see that he could step into controversial situations, situations that I probably wouldn't be comfortable in. And he saw opportunity and he saw the value in those situations. You can think of one situation where a CEO was tossed out for, I think, bad behavior. Or this was kind of a founding CEO of a company. Stock was down 50% or so.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“I think that he is very interested in these kind of box-like business models that can be rapidly replicated across the country, that can scale up very rapidly. And where if the model works in a couple of core markets, you can bring that model across the country quickly to scale up those businesses. So I think he was a very successful in doing that with hotels. Very successful doing that with retailers, very successful in doing that with restaurant companies. So it was refreshing to talk about Korean barbecue and burgers and all of the kind of interesting new themes that are out there today. There have been some recent restaurant IPOs that have been very, very successful businesses. I think of Kava from a couple of years ago that we looked at. And he was up to speed on all of them.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Was knocked out, and there's a new CEO, and the stock is down 50. He was very interested in looking at those kinds of companies. So his spectrum was so wide. It was so fun to talk to him about how he thought about going across the spectrum of ideas. And, you know, he had an interest in all of these things. And if you can imagine the spectrum within small cap. So, I mean, just some of the most troubled situations he was interested in exploring and in talking with the management teams about. So that was just very refreshing. Peter Lynch could go across the spectrum even today to find great ideas. You know, it was also interesting. He talked about this in the book. And of course, in person as well, he's very interested in the restaurant industry, very invested in restaurant stocks. And so we talked about hibachi shops. We talked about other types of restaurant themes.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“In asking all of the questions you might expect from somebody who's an investor, a portfolio manager, and in his case, a legend. Also, just talking with him about investing in the ideas he was most interested in. Peter Lynch, he's both a growth guy and a value guy in the same person. And so we were meeting with growth companies, fast-growing small companies, and I'll get to the kinds of companies he was most interested in in a minute. He has the talent to be able to look at the fast-growth businesses and see where they could be in a number of years. And he also had the interest and the ability to go way into value land. And I'm talking about cyclicals, steel companies, metals, troubled companies, companies where the sea”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“He's very engaged with markets. He is so intense. He's up every day. He's talking with his analysts. He's investing for his foundation. And he's very, very engaged. He's very focused on small caps. And I think he talked about that in multiple books where he believes that the opportunities for Alpha are in the small and mid-cap category. And when I say small, I mean, he's going very small. He's looking a billion dollar companies, sub billion dollar companies. And we were at a small cap conference and the companies that we saw were all billion, two billion dollar market cap companies. And his knowledge of those businesses was just remarkable. I mean, he knew the details. He was into the details. We were meeting with management teams and he was getting right down to the core issues, to the controversies and getting to the facts.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“You know, your relationship with him and the impact he's had on you. I got to know Peter Lynch back in my Fidelity Days. He was a mentor to the analysts. When I was there from 2005 to 2008, so I'd gotten to know him a bit back then. But I had this great opportunity to spend a day with him at an investor conference. And it was just so much fun being able to watch the great Peter Lynch in action, interviewing companies, meeting with management teams, talking with him about businesses. He doesn't do very many interviews. So it was just a pleasure to be able to spend that much time with him doing what he does and watching him in his element. And there are a lot of interesting takeaways. First, he's just the nicest human being and he's very engaged with his family, which is special, I think, in our industry. But there are a lot of interesting takeaways. I think the first is they...”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Since 2014 and through more than 180 million downloads, we've studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Playthink.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT
“Whether any of the magnificent seven companies fit into Joseph's recurring revenue framework, the role that valuation plays in Joseph's investment approach, Joseph's top stockpick to hold for the next 20 years, why he likes the aerospace aftermarket industry, and so much more. As a host here at TIP, I search far and wide to try and interview the very best investors in Joseph certainly fits the bill. Also, Joseph will be joining us at our summit event in Big Sky, Montana. This is a special gathering that TIP will be hosting in September for a small group from our audience to network, share ideas, and enjoy great company in the mountains. There's limited spots, so if you're interested in joining us, you can click the link in the show notes. So with that, I really hope you enjoy today's episode with Joseph Shaposhnik.”
2025-06-20 · We Study Billionaires · TIP731: Owning Best-in-Class Businesses w/ Joseph Shaposhnik · IDENTIFIED FROM THE TRANSCRIPT