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Pierre-Olivier Langevin

lines on the record: 60
first: 2024-08-02
most recent: 2024-08-02
sittings or episodes: 1
sources: podcast

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“And then you try to buy at a reasonable valuation, not the opposite way. Sometimes as investors, we try to seek to things that have gone down. But if you don't know the business and things I've got down, you got two things to figure out. You got to figure out the business, how it works, what's the management, what's the perspective, the long-term perspective. But the other thing you need to figure out is what's the problem? Is it temporary or permanent? So you got two problems to figure out and what we've learned over time is when you do that process the opposite way. So trying to find things that have gone down, you're rushing on research. You're going quick because your thinking is, oh, well, the stock might go up and I could lose the opportunity. So we add our best investments looking at companies for years and banging our head on the table and say, gosh, when am I going to buy that thing? It's super expensive and it always”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And we were like, gosh, we left so much money on the table. So I guess we've learned the hard way, but we haven't sold one company. Probably your audience is well aware of. Constellation software. We've held it since 2012. So it's been 12 years. And it has been expensive much of the time. And being able to see the quality of the business and having that criteria of reasonable valuation, a stock could be expensive, the business could be good, and you could keep it. as long as it's reasonable. And so the committee really helped us learning what stock should be kept and which one should be sold depending on the valuation. It's really hard to find true compounders. So when that happens, they won't stay cheap much of the time. So you have to accept to own them at more expensive valuations. And maybe the second key learning would be your research.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Hold your winners. And winners, it's not necessarily stocks that went up. Eventually that converged, but winners for us is business that can compound because they know how to reinvest and as they reinvest their earn capital, the moat is increasing. And so I wish I had been able to understand the importance of reinvesting earlier in my career. I was all about trying to find the best MOTs, but sometimes you can have modes that doesn't allow you to reinvest enough. And so your return, although it's a great business that you own, your return are not necessarily as good as I might have wished at that time. And so the committee, being a group and being focused on compounding always gets you back to that idea. Can that business compound? We sold Apple. We sold Costco and there's a bunch of business we sold.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“You think about be on me, cannabis industry, cryptocurrencies, valley and pharma. So we didn't invest in any of those things. And there's basically four criterias that we would look at. Good and sustained return on capital. Ideally, even during recessions, meaningful and durable and durable as in expanding competitive advantage. The third one is having good managers that are able to reinvest for the long term an attractive rate of return. And if you've got all those three, it's great. You got a great business. But we're investors and were they there to make a return and a return that's better than the benchmark. So we need to buy at a reasonable valuation. That's key. The key learnings that we made inside the investment committee over time, and that circles back to your initial question, having the discipline to”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“And so being able to put 10 in a stock is significant enough, but having two small committee would put us at risk, we think. And going into our strategy, because the strategy is being applied by analyst, but also by the committee. We're fundamental investors and all the members of the committee are really investors on themselves. They have their own portfolio. They make their own decisions for their own money. And when we find something attractive, we want it to be significant. So we own maybe 15, 20 stocks more or less. We've got only one strategy, okay? And we're bottom-up generalists, so tech, pharma, financial, industrial. We would look at all those kinds of companies. We tend to shy away from biotech's resources. Highly cyclical with fixed cost or highly speculative, not revenue generating, we would shy away from it. Or the latest fashion.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“The committee in itself is not doing much research work. The research is done by analysts and amongst the five members of our committee, there's three analysts that are mainly working full-time looking at stocks and stuff. And so the reviewing is done by the committee and all the buy and sell decisions are done by the committee. By the way, having five members, we feel like it's the good amount of people, too much people, it's mostly like a survey of public opinion. You don't want that, okay? You want a team that's nimble enough to be able to take bold decisions. And if you've got 10 persons around the table and you want to put 10% of your money in a stock, it's going to be a quite hard task. And having only one people on the flip side, the problem is we want to avoid failure. And if you end up putting 25% In a single”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“That your return, and I was like, gosh, I was thinking about our questions to answer. I was like, wow, that super simple questions. But what I learned later, maybe a year or two after, is all people that were interviewed, they didn't even invest with their own portfolio. They would buy mutual funds. They would do indexing. And so when you think about investment, probably even more in Canada, in Quebec, it's fascinating to see how much industry participants aren't even trying to beat the market. And even the ones that say they do try to beat the market, you look at mutual funds. There are 7,500 stocks in that. And so if your best idea is, I don't know, 4% of your portfolio, are you really in the business of having significant, meaningful returns? So of course, you'll underperform if you charge fees and you're close at indexing, you'll underperform. So I was surprised by that.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“Had to be done, even Calseimar, who founded the company, he did not come from another investment firm. He learned actuary because at a young age what they taught him at school, it was basically that the markets were efficient. And you could not generate any meaningful alpha over the long term. So he was like, okay, so if nothing can be done there, then I won't pursue that career. And so all the process we had to learn them, Cal and then he did know they had to have great people, great processes in terms of investment. We just looked at what the best were doing. If you want to be good at hockey, you should watch Connor McDavid or Sidney Rudsby videos. That's the same thing for investment. You should watch Warren Buffett. You should watch Phil Fisher. I remember Cal and then he asked me on my first interview, do you manage your own money? What is your return so far? And how do you calculate”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“That you even wrote a paper about if Warren Buffett invested in Quebec companies, what are the business he would look for? And I recall names like Cankar, Richelieu, Alimantation Costar, CGI Group, and he thought positively about some of the same things as I do. So seeing the markets as a way to buy businesses, not pieces of paper. But I think what was most unique about Medici and how we started is there was no star investor leading the way. So I think most investment firms today are born from an employee, from an investment firm that chooses to leave the firm and go on its own. And so he knows the recipe, he knows the processes, and he would find people on back of his functions to help him keep looking at stocks during the day and so on. So there was no process like this.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT
“There was nothing much to see in terms of track record. There was almost none. The firm was starting and from my point of view, I wanted eventually to leave industrial design to pursue that investment career. But I saw it as something that would come far away in the future. And so I would do industrial design as my daytime job and on evenings and nights I would do investment. And so Cal Simal and Danny Foster, they were attracted to my profile. So they founded Medici two or three years before they met me. And I was writing a financial blog just to have connections and speak with people that know fundamental investing. They were attracted to my profile just as I wrote that blog. And Cal Simar on his side was writing in the local newspaper in Quebec and Montreal. And he would talk about business's good ROE or return on asset businesses.”
2024-08-02 · We Study Billionaires · TIP649: Owning Stocks for the Long Run w/ Pierre-Olivier Langevin · IDENTIFIED FROM THE TRANSCRIPT