YouSaid · the spoken record

Mike Zapata

lines on the record: 65
first: 2018-05-29
most recent: 2018-05-29
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

“To me, in other component of it, of Cententia is, you know, again, how do we give back? The better we do, the more we can give back. And I think that we want to return that to people that we can return it to. And I think that our community gives a lot and those families give a lot. So how do we best support them and is trying to take what we learn here, give it back to that community? But yeah, time and mentorship, I think, is valuable.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Believe. I mean, it sounds like a, just a broad answer, but the fact that people have trust and confidence in you to do well, to take that and to be able to prove that is something that's really, really important. So I think that throughout my life, there's been supporters. Like I said, we stand on the shoulder of giants. And without the support that I've had from the mentors, without learning from them, their time, their insights is incredibly valuable. And to be able to learn that, and I'm really appreciative of that people like Michael and Mario and Bill, like even Michael here in this office is just incredible to be supported by that.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I absolutely agree. I mean, if you have enough ego, then why should you change? Yeah, it's a high place to fall from.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“To have a mix between confidence and humility because it's one thing to be confident enough to do it, but you have to be humble enough to understand how do you improve, how do you get better. And it goes back to sort of trying just being the best you can be. And I think that confidence, that balance between confidence and humility can be found in investing. Are you confident enough to buy a position? Why are you confident enough to do it? It has to predicate on the process of research. But then you have to have enough humility to know that you could be wrong. And if you are, where could that be? And how can you get hurt? I think without those two balancing each other out, I think we're all prone to sort of ego. I think you have to keep that in check.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I mean, I think first is I appreciate the time. Yeah, just the opportunity to sort of talk about the story and the journey. Life and experiences about progress, and you have to have alignment in that progress. So what you're doing as a 30, 40, 50-year-old is going to be different when you did your teens and 20s. And so there's that ability to evolve and to just learn and get better and know that there's this idea of perpetual beta where you have a program that's inside of you, but it's always in beta because it's always going to change. And not those core values, but that program is going to always modify and adjust. And if you don't, if you try to say that it's locked in, then that's where you stop growing. The other interesting thing is, again, it goes back to what gives me the sort of why how can somebody be so arrogant to come out and start their own fonts? How can you be arrogant enough to try to go and become a seal?”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Particularly, it's family and funds. I've got two boys now, five and a three year old, and I've got a young funds, five-year-olds. I tell people like that's my focus. The family and the funds. And the goal is to grow both of them well.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“This life doing what I'm doing now. I don't know. I think that my former life was just doing the job, being there, being at that sort of tip of the spear and serving a higher purpose and actually getting in the work and doing the work. Being in combat, being in that environment we were surrounded by this. And you have to rely on sort of like your skills. You have to rely on your team and you have to do the best you can do. And right now in this new life, it's kind of the same thing. We're testing that. You know, we're pushing ourselves. We're making sure we're not missing something. We're just doing the work. And I think, I don't know. To me, it's like a journey. It's not about where you think you want to go. It's about just doing well with the process and getting into the weeds with that. And that's what makes me sort of feel alive. And, you know, I look at priorities. I think priorities are very important, right? You have to understand your priorities. And for us, for me,”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or we finish an operation, and now we go back and say, what do we do well? What do we do wrong? How can we improve? And so I've been in these positions where I've had a couple of these and I've reached out to other investors that I know called it. And the question was, what did I miss? Why did I miss it? And how do I not repeat that?”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we get sucked into stories quite a bit. The market gets sucked into stories and they like stories. And I've been bidden by a couple of stories where you have good management, you have somebody coming in and changing it. And they have a good story that goes behind it and you want to believe it. But it goes back to sort of testing and verifying that story. And so you have to have this mix between the story, the qualitative side, understanding that, but then also the quantitative side. You know, can this company actually double revenue in five years? And a lot of it sounds fantastic, but the question is, how are they going to do that? And is it really valid? And I think that that's something that we look at. Those are sort of blind spots that sort of stand out to us, more on the short side. But we've been pulled into some of the stories on the long side. And then at the end of the day, again, one of the things that I bring from my former life is the ability to have do hot washes where we finish an investment.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, he's talking about the idea of what does that mean. And, you know, there's a lot of that questioning right now that's happened, I think, in the value side. But at the end of the day, you got to stick to your niche and you have to sort of adjust where it makes sense. And I think a perfect example is like Seth Clarman. He's had such an ability to sort of adapt the markets and be successful throughout all these cycles. And I think that it's impressive when you see that happening with some of these incredible investors.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Changed. He quickly adjusted that. He went back on to CNBC and sort of modified that a little bit. But it's testing a lot of investors right now, a lot of value investors, because it has changed. So I think that you have to understand there's a lot of secular adjustments that are happening right now. This growth aspect with Amazon and Netflix, and I mean, it's incredible what they're doing. It's incredible the market share they're taking. But at the end of the day, you're talking about paying incredibly high multiples for some of these companies. Frankly, I'm just not smart enough. I mean, Bill Miller is an incredible investor. He called it years ago. And Amazon, and he knows it. He sat down with Bill. It's fascinating to hear him talk through it, this growth aspect. And it's interesting because you're seeing a lot of that happen now. You had Bruce Greenwald, who sort of oversees the hybrid center until, I think, coming up here soon. He's talking about the idea of value and growth.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think it's a great question. I had a conversation with Michael a few weeks ago, and it's the idea of sort of old world versus new world. In the old world, it was a lot easier to find these sort of balance sheet hard-tested that would go back a reversion to the mean. Right now, there's so much dislocation that's happening. And to try to hold on to something that used to work in the past that may not be as relevant today, you have to be careful about holding on to it too hard, but you also have to be careful about being sucked into sort of the sirens of growth. Because when growth works well, it works really well. And if you're a value investor and you're not part of that growth, you're missing out. And you feel it. And I think you see that grittiness being tested. You had sort of a, I wouldn't say waffling, but when Einhorn came out last year and he sort of said he alluded to the fact of value of being different and something.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“We had H and Voucher go around for two minutes and talk about two ideas. And none of those two ideas were the same or similar. And that's what sort of value goes into. There's so many different little similarities or there's so many differences in value that no two personal eyes are going to overlap. But ultimately at that center is Gram and Dodd.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's right. And so now it's like, okay, before it was a good investment to look at 0.5 times book value, right? A hard, hard stop. Now that level has probably gone up a little bit where you have to understand that there's going to be a little bit more, less margins of safety that you're going to get because the opportunities are not there as they used to be. But I think the fascinating thing about value is that when I think about it, there's this bicycle wheel there. There's a spoke and there's a hub. That hub is like granddod. They created that hub. They are at the nucleus of value. And you have all these folks that go out. And I was fortunate to go to an ideas dinner where there was like a whooshoo of value investors. Michael Price was there. Lee Cooperman was there. Mario Cabelli was there. There was a few other Harvey Eisenstadt was there. There's a few other gentlemen that are on the table. And what I liked about it is that in this investment, in this idea's dinner,”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're discounting everything. You got cash, you go down that, you have a contraceivable, you discount that, you have PP&E, you find out what's depreciated, what the market value is. A lot of times if you're lucky, you get property that's worth a good amount of money but is completely depreciated. And then you look at Gidwill and the tangibles, and then you really have to, I mean, we don't count that at all just to be safe. And then you count 100% of liabilities. And then even then, when you sort of get down to this, if you look at a hard net net liquidation, you still discount that even further because if you did decide to liquidate this company, it's going to cost money. It's going to cost money to sell. It's going to take time. So you discount that even further. So when we do hard liquidations, we look at that balance sheet. And a lot of times, especially in this market and this environment, those have been picked apart. There are not very many opportunities like that. So the class, I think the old days of having a lot of net net opportunities is not gone. Yeah, it's gone.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, I think that that's where your safety comes in. You are protected on the downside with the balance sheet. That's it. If it's high multiples, those multiples don't matter. If it's a lot of goodwill, you got to be concerned about that. You got to test the balance sheet. I think that's where we like to see the protection come in.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“He was one of the original learned from Max Heine. He was one of the original value investors. He was the first mutual fund activist back in the day. And he ended up selling mutual series in the end of the 90s, which basically has effectively been retired since he was about 44. But he's been doing the same thing that he's been doing up until he was 44. And it's about understanding sort of with Michael, I was fortunate to work out of his office for about three years. It's just incredible how much he can distill in one sentence what he's experienced over the 40 years. So balance sheet, like how do you test the balance sheet? How do you avoid high leverage? How do you not care about macro? How are you a pure value investor? And Michael is that and he's been successful over decades.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I mean, we stand on the shoulders of giants, really. And especially nowadays, you have just tremendous amounts of investors. You have the clout. You have Buffett Monger. How can you not learn from them? Michael Price been doing this for decades successfully, right? I consider him a mentor.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of, you know, you could be stuck down there for a little while. But when they start doing the actions that they say they're going to, then the market will recognize that over time.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Market doesn't believe it. Why don't they believe it? It's because management has been telling them the same thing. They don't trust management. That's important to understand. Why aren't they trusting management? Do we have a different stance on that? Have we been able to sit down and have conversations with management? So those are really interesting dynamics. And you have these opportunities in the small microcap space where you're finding, where we are finding and we're involved in net nets, right, which don't really happen in the market. They happen down there because people can't put money there. But some of these net nets have tremendous amounts of NOLs that are on the books. And that's really attractive. And so again, the market has sort of discounted these companies. There have been money losers for multiple years, but now they're sort of a shell of what they were. And now they just had a lined manager that comes in with good experience who's done that playbook before. The question is, does the market believe them? A lot of times they don't.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“And again, it's not about what they say, it's about what they do. So when you start looking at the queues and the tens and the transcripts and you start reading these things, they are in fact taking the steps they said they were going to. But the market doesn't believe them. And there continues to be this sort of widening of the gap of intrinsic value versus what they're pre-priced at. And that's when that happens, it's a question of what are we missing? Why are we seeing this? And sometimes it's a matter smart. The market's smart. And sometimes it's a matter of”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think management changes, those are a little trickier. We have a portion of the portfolio that's focused on management new managers coming in. One thing that we like to see is we like to see a completely Company that's going out of the market and telling them that they're changing.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you see a lot less institutional, a lot more retail, a lot less hedge funds, and again, a lot more retail. And I think I say that, but there are big firms out there that have tremendous amounts of money and they understand the value of small micro caps. So they will actually own a good portion of these companies. Aerial investments is one of them. They're in companies that people are like, well, you're a multi-billion dollar investment arm. How can you put money into a hundred million dollar or $50 million company or even $20 million? But they do. And so it's important to know who they are. We find out who they are and we give them a call and we have conversation to figure out why are they in it? Is it just a passive investment? Is there a thesis there? Because most of the time those heads of those states, you know, whether it's aerial, they don't necessarily get down into those level of details. They have someone else that's managing that. So the conversation is who is there?”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“There has to be a level of integrity there, and integrity is based off of, again, its actions. Never believe somebody on their words, look at their actions. So how are they aligned? Other incentives that we like to see are restricted stock units getting pushed to directors at a much higher price, share price. Not just blind options, not just blind RSUs, you know, where you're going to stick to it, but you have goals. You have mile markers there where that manager is incentivized to create shareholder value. Now, that's positive and that could be negative because you want to make sure that they're not shooting for the stars. And so there's that little balance of saying, hey, you are lions, but we want to make sure you're taking smart shots on goal and not just trying to hit grand slams, which could have a negative effect.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just source development. How do you go and have conversations with the folks and understand their incentives? That was really valuable because you're talking about sort of battlefield interrogations where you're reading body language, you're understanding sort of that the nuances of people being honest with you or trying to evade answers, being very direct. And you don't really understand what you're learning until because it becomes ingrained. But I look back at it and that was really valuable because now when we talk to managers, we understand their incentives. We see what the alignment is. We see where their goals are and we can easily have conversations.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not the entire company. And if you sort of pull with red. I would say about eight, nine dollars. And so, if Ken, the goal is to test sort of Paul and see, hey, if somebody came to you right now and offered you, why are people not approaching you? So my god's going to offer you $8. Would you take it? And he's like, no way. We see an easy run to certain levels because they will see it as well once we get this business up and going. We still have to do it. So then you fast forward a few years. And we're still talking to the company and we're keeping contact with them. The stock ultimately gets to. So it's beautiful when you can buy on assets and you can sell on earnings. And that's kind of what we ultimately did. And that was a great example. And I think what I like about it is being able to assess management. There was a portion before I went to development group where I was in a special activities role and I was part of a small five ten man team. I was the only officer. I was pretty lucky to get into there. I did ASOT level two, level three, which is really...”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Had his entire career been in this heavy civil construction industry. And we sat down with him and we said, Paul, you have a restricted stock for three years. You're taking a dollar's salary. Why? What is your game plan? What's your first year, second year, third year, and what's your exit plan? And he walked us through that process. First year we're going to, just like any turnaround, we're going to stop the bleeding. Second year, we're going to bring in the team. We're going to start to build this company the way it should be. Third year, we're going to continue to do that, bring in the right management and oversight. And that was a very simple game plan, but that was all predicated on the fact that we did a lot of work on this company. We saw a heavy civil construction company, low margin, high operating leverage, and I equated it to a starfish. There's a starfish with five tentacles out. They had Utah, Hawaii, Colorado, California, and Texas. And Texas, that one sort of tentacle was bleached.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“So now you're talking about a 65 million dollar company. The reason that there was smoke and fire, and this is where the attraction was, and this is the difference between sort of that psychology of fear, is that there was a revolver that a bank that says we have a $40 million revolver, we're going to wind that down over the next six months. So there was a liquidity issue. So now you go back to the balance sheet and look at the assets. And this was a heavy civil construction. They have a lot of heavy machinery. They had about $90 million worth of assets that they could put up for asset-back loan in ABL. So we talked to management. They said, we're not concerned. We can do an ABL. We probably will, or we will do an ABL. And they told the market this too. And the market just didn't believe them. And they pushed that stock down. And there's no liquidity issue. So we know we're protected on the downside. Now the question is, where does the upside come in? And that's where the CEO is. It was Paul Varello.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“$65 million market cap. We just had management come in. That's aligned. That is attractive. So we started to build a position. As we started to pull this apart more, we want to talk to management. We want to figure out what is his incentive. He's either smart or he's just really cocking arrogance and he's just going to, he's not going to understand what's going on. So we find it, we have a sit-down conversation with him. This company was actually, so I'm born in San Antonio. My family's in Houston. This company was actually headquartered across the freeway from where my mom's my house was. So when I go back to visit, I go to Texas AM to do an investing class. I pop over there. They wouldn't really answer the call, so I just go and knock on the door. And I said, hey, I'm Mike. I sent you some emails. I'd love to sit down and talk with you. And so they did, probably because they didn't have a choice, but they were nice enough to have a conversation. And we started to sort of assess management.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, so I'll give an example of a stock that we were involved in. This stock was a small stock. It was a $65 million market cap. And we found the stock just to go over the stock price. It went from $4 down to two hundred fifty. And so we looked at this company and the question was, is there something attractive there? And if there is, why? Another aspect of why we looked at the company is because we saw alignment of management. So we saw a board member that was named CEO. He took a dollar salary and he took six hundred, nine hundred thousand dollars or not nine hundred thousand shares of restricted stock for three years. So the question is, why is he doing that? So we started looking at the balance sheet. We started sort of pull this thing apart. So we realized that, hey, if we do a hard liquidation on this company, we're getting to a $75 million company. And that's being conservative. We're saying, okay, we can buy a $75 million company at a”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's a value of team and being purpose driven. And I think that everyone in that team was served by a higher purpose, and we're pursuing that purpose. So to the extent that you create a firm or you have a company or you're managing a team, it's how do you get that team to understand what the goals and objectives are to buy into that and then to support that on their own accord? Because at the end of the day, it doesn't matter if you're a SEAL officer, doesn't matter if you're an enlisted guy, you're all part of the team and a smart officer will seek the guidance of the senior enlisted because they have typically had more experiences. So it's understanding that there's no room for ego. We want to win. And it's not about being right. It's about winning. So sometimes you have to understand that dynamic, and it's difficult for a lot of people because when you reach a level of seniority, you want to be sort of recognized and you don't necessarily want to be.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“So then the third one is when just recently, a couple years ago, the guys came into the city and we walked up to the Brooklyn Bridge. And that was a, you know, again, it was pre-development group, now we're in the salt squadron, and then that same squadron when they came in, you know, still friends, we all went up, you know, this is post my service where we sort of reconnected and we're taking a memorable shot on top of the Brooklyn Bridge. So New York City will be my hometown now. It's a special place”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“You can fly in. The idea for Halo is you have this really high altitude and you're there to sort of defeat the radar. So you just drop all the way down underneath radar and then you pull and then you're sort of on the X or exactly where your infill spot is. For a hey ho, it's more of an offset where you jump out and you deploy quickly so that you can then coast and you can fly over and you can cover terrain and then you can get to your infill spot.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“25,000 feet jumping on full oxygen, full combat gear into a dark HLZ and do it successfully. And I like that because of just that ramp up that's required. I like it because of the team is there. The second picture is a year later we were able to use that training and other training that we had done to do a hey ho, a high altitude high opening combat jump into Afghanistan where we were pursuing one of the 9-11 facilitators. So a year after that original photo, that's us. We took a jump in combat and it's just a camaraderie. It's that group that we did it and it'll always be with us at that operation.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Those are meaningful to me. So the first one is a jump trip that we had taken, and that was during the selection process for development group. So it's me and my class that's there at the end of the jump trip. And what I like about that is just the idea of that preparation. I went to that jump trip without zero experience on freefall. I had static line.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Happen is that target actually completely exploded. So they had a house born IED that was there in order to sort of suck in the assault force. But the experience of that troop chief, the experience of those team leaders, that stood out and they saved guys in spite of being sort of pushed to sort of do this. But you have to have that experience. You're not right all the time. Again, no matter how much you sort of mitigate that, we've lost incredible men that have been much more prepared than myself.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Experience. And I'm learning that even now, we're always learning that, but I forgot the quote, but it's the young man who understands the rules and the wiser, experienced man that understands when to break the rules. And that's very true. So what happens is something that jumps out in my head is I wasn't deployed, but I was aware, maybe I was deployed, I wasn't part of that assault unit. But there was a high value target that looked like a high risk, high probability of success. And so you had leadership that was forward-leaning and they were sort of dictating, hey, go get this guy. I know it's not ideal, but go get this guy. The experience of that troop chief and ultimately his recommendation to the troop commander was something doesn't feel right, so let's hold off. And they did an offset. They were away from the target.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's risky whether it's a high multiple, whether it's high stock price, whatever that is, something's happening. And so you wait, you wait for that thing to start presenting themselves in a much lower risk environment, which is where the price gets pushed down. And that same time where we go out of the darkest night is when the stock has been just completely punished. But the precursor to that is have you done the work involved in understanding that target? And because at the end of the day, you can have mitigated all those risks, but something can still bite you.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“So that adds a level of complexity to it. So, what do you do? You wait. You wait, and that high value target happens to present himself in Afghanistan. That gives us a much cleaner picture. We take away the political risk because we have more control of the area. But now let's see found this person in a valley with the moon full. Well, now you, again, you've increased your operational risk. We can't take advantage of our night vision. We're level in playing ground by having a full moon, having us be able to get sort of seen at night. So we wait and we wait till that darkest night moment where there's no moon. It's really scary. People don't want to go out. And that's when we go and we do our best work. And all that is contingent on having studied the target, having understood that, hey, how do we mitigate this risk? And when I think of value, it's kind of that similar aspect where you see something that is potentially”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Remembering that, right? No, that's right. I think it's taking advantage of the darkest night, and that goes back to sort of this idea of what value investing is. Typically, people are scared, they're worried about a stock, they sell it, there's forced selling, and they don't want to touch it because they're just worried about that. So when I think about the times in our combat operations, we had a, the example, there's always risk. No matter what, no matter how much you know about a company, no matter how much you know about a target you're going after, when you do something, there's always going to be risks that you cannot control. So I think that that's important to understand. So when we think about it, let's say that we're tracking a high value target in my former life, and we find that person in Pakistan. Well, you have, you already have operational risk that's embedded in every operation, but now you've added a sense of political risk. If something goes wrong, then you have a much higher chance of political risk happening and there being blowback.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“He goes, and now he's part of the troop or the squadron, and we ultimately lose him in a battle in one of the mountains of Afghanistan. And he was covering fire. He jumped onto a tree and had taken advantaged shots on a couple of enemy personnel, and they shot him as he shot them. And they did everything they could to save him as they were coming down the mountain in this brutal operation that they had.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a Terrence where he was going to, he tried to put a package in to go to development group. It wasn't accepted because of his medical condition. They thought he was going to be medically retired from the service. He made a deal with one of the captains and he said, you know, hey, sir, like, give me a shot. And don't give me any special treatment. Let me go in there. And if I do it, awesome. If I don't, I'll medically retire. No problem. And so they did. And they gave him a shot. And Adam, I mean, you understand, development group retains the top 5% of the entire force, and you have to be top tier to even try to go there. And then not everybody makes it through there. They take half of those guys and make it through after another six months election. So incredibly highly selective, Adam shined, and he made it through that as a weekend, offhand basically shot, and you have to be a premier psalter to get through this thing. He was that.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Go into too many details, but when you read the book, you'll understand Adam had to overcome a lot of drugs, his family upbringing that he came to prior to becoming a seal. And so he overcame that. It's a little similar to sort of having the sort of adversity when you're younger. He had to overcome sort of his own personal demons, had to fight through that, and he had to prove to himself that he is worthy of having this incredible opportunity to be who we always know he is. And so that's Adam Brown. So when he got to Seal, you know, I was actually, I got to Seal Team 2, my first command a little bit after Adam. I think Adam had already been there for one rotation. He had his eye shot out. His main eyes, right eye, primary eye, was shot with a simulation round. It came back and he lost vision in his right eye. So you have a person that is a shooter, and you have your right eye dominant, you have your right trigger finger, and you're going to town and you've trained on that.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Development group particularly, it's incredible to read. And that gives a glimpse of what the community is made of, which is a bunch of individuals that will give themselves up for the greater good, the team. And I think that that's something that I will always miss is having that team component where you know everybody that is with you has been through the same sort of trials and tribulations that you've been through and they've succeeded and they succeeded well and now you're going into combat with this group of incredible people that you will give your life for in order to win that's what we're there to do we're there to win and that team dynamic feeds to that”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Recognition Yeah, absolutely. And I think to your point, it's a strange balance because the core values we hold on to are being acquired professional. And how do you do that? Your job is to be the best, not to be recognized as the best. Anytime an individual is isolated, there's just a natural tendency to sort of have self-quorification. And unfortunately, when a living author writes a book about their journey, and similar, I'm not going to I'm recognizing that I'm telling some stories for my journey. So even in this, there's a little bit of self-clarification that naturally happens. Very cognizant of that. What I will say, though, is that the books that I recommend to people are books that fearless, fearless was written about incredible person, Adam Brown. The only reason that I recommend Fearless because there's no self-glorification. The guy we lost him in combat. And so to read his story, to read about his journey, read about his life, read about what he did in the SEAL teams.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“Seven years, I got picked up and I put a package in and I went to development group. And again, it was just a matter of timing. They were being really active. We hit there the right spots. We got a lot of incredible experiences more than I'd want. There's a lot of publicity around that. And I think that most of the guys in our community, contrary to just a few guys that have broken that mold, they do it for the job versus the”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“I can or I will say though is that I was really fortunate in my timing. When I got into the community two thousand one, that's when 9-11 kicked off the global war on terrorism kicked off and there was a lot of work to do for everyone. So the seal community in general was doing a lot of these operations on our own. And so we saw a lot of action. As the combat progressed and you have this move from chaos to stability, which has to happen, the regular, I would say the regular SEAL community became less combat focused because the rules of engagements change, their ability to go out and conduct operations has been sort of compressed a little bit. They're not going to get as much work. And you could see that. And at the same time, the other side of that development group, they ramped up a lot more. So they became much more active. And so after being in the regular teams for about”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll just say it's a fraction. I think that it retains probably 5 to 10% of that force. And you have to have done well for multiple years to even put a package into there so they take a look at you.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“You're traveling, you're training, you're doing a lot of things. You're rarely home and then you're gone for six months. So it's a cycle. You come back home and you do it again. You're just probably in more of a higher leadership position than you were before, but you're doing that cycle again and you're honing your skills again.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source
“With that turned into, it turned into one seal team, an entire seal team that left and they deployed, and that seal team was broken up into three divisions or three task units. Was a two year cycle. So before you even deploy, you're talking about six month blocks. So the first six months, you're getting individual training. You're going to communication school. You're going to sniper school, Breacher School, something to hone your individual skills. The second six months, you're core unit training, so your seal platoon, your seal unit, you're going out as a team, and you're conducting land warfare training, river training, boat training, swimming. You're doing that as a team. That's the second six months. That third six months is you're putting on top of your team and your unit helicopter squadrons, boats, support. And you're putting this big package together. And all that is a ramp up to actually deploying at the end of that 18 month block. And then you deploy for six months. And so you have this two-year cycle where you're doing this. And so even though you're home for, in quotes, you're home for 18 months, you're really not.”
2018-05-29 · Invest Like the Best · Mike Zapata – The Darkest Night: Lessons from Battle and Value Investing - [Invest Like the Best, EP.89] · IDENTIFIED FROM THE TRANSCRIPT · source