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Welcome to the Compounders Podcast. On this show, Host and Investor, Ben Claremon, will explore the topic of compounding from various angles, including through interviews with public and private company executives, investors who focus on compounders, and newer investment firms that are building a business they hope will become more valuable over time.
Episodes
Tuesday Feb 01, 2022
Tuesday Feb 01, 2022
This week, we are replaying one of favorite episodes from Season 1. Due to the complexities that come with the upcoming Q4 earning reporting season, we needed to take a week off between new episodes. However, we will return the week after with a new interview with the CEO of an $800 million dollar market cap software company. Tom Gayner is the Co-CEO of Markel Corporation and the wisdom he shares on life and on investing is always eye opening and valuable. We interviewed Tom in August of last year for Episode 2 of Season 1. The Compounders audience has built since August and many of our newer listeners may not even be aware of the Gayner interview. So, whether you have had a chance to listen to the interview or not, we hope you enjoy it.
EPISODE:
My guest on the show today is Tom Gayner, the co-CEO of Markel Corporation. Markel is a Fortune 500, $16.7 billion market cap financial holding company that primarily operates in the insurance and re-insurance industry. Though Tom has only been in the co-CEO seat since 2016, he has been with Markel for close to 30 years and he has been an investor longer than that. Markel has been compared to Berkshire Hathaway in both structure and performance and Tom has been a key architect of the company’s diversification away from insurance through the acquisition of operating businesses. In fact, Markel Ventures has gone from $1.2 billion in revenue in 2016 to about $2.8 billion today.
Tom is well-known in the value investing community for his charm and intellect. Also, many people who have made the trek to Omaha for the Berkshire Shareholder Meeting have also attended the Markel Breakfast event. I had the opportunity to listen Tom speak a number of times in Omaha and that is why I thought he would be a great guest on the podcast. In this conversation, we will cover:
- His thoughts on what makes a compounder
- How to invest more like a grandmother than a Wall Street trader
- And why he is a better investor because he is a CEO—and vice versa
Click the timestamp to jump to each answer:
1:38 - Introduction
3:07 - The 2008-09 financial crisis and Markel’s response
7:55 - The benefits of a legacy of family ownership
11:39 - Comparing today’s market to that of 1998-99
15:53 - The benefits of investing like a grandmother
18:18 - How being a Co-CEO has made Tom a better investor
24:09 - How to tell if a person is a good cultural fit
28:35 - Building culture by articulating what your company stands for
32:15 - Bottom up and top down approaches to compounding
35:39 - Applying the Colfax Business System at Markel
38:08 - Some challenges of working within a family-controlled business
42:03 - Markel’s willingness to invest today for future benefit
48:45 - How Markel Ventures helps diversify the company
51:53 - Why culture is a big part of the moat around Markel’s insurance operations
55:14 - The emergence of ESG and embedding Quaker values
62:30 - Tom’s ideal legacy within Markel
63:50 - Learning from your mistakes to become more adaptable
66:14 - Starting with principals and then learning by doing
69:15 - The most under appreciated aspects of Markel
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Jan 25, 2022
Tuesday Jan 25, 2022
My guest on the show today is Joey Levin, CEO if IAC/Interactivecorp. IAC is a $12.4 billion market cap holding company that has a long history of investing in disruptive digital businesses, helping them grow, and then spinning them off to shareholders. In fact, the company’s Chairman, Barry Diller, has been influential in the success of a number of well-known public companies, including Expedia, TripAdvisor and LiveNation. In more recent times, the company has separated from Match Group and spun off Vimeo. Joey Levin has been CEO since 2015 and is tasked with creating value with the remaining group of businesses that IAC either controls or has minority stakes in. With that as the backdrop, I was excited to talk to Joey about:
- Spinning off Match, which now has a $35 billion market cap, during the tumultuous summer of 2020;
- What needs to go right with ANGI for the stock to be a good investment from here;
- The investment process and how IAC decides which opportunities to pursue;
- The merit of the DotDash acquisition of Meredith;
- How Joey decides on which companies to spend his time
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Jan 18, 2022
Tuesday Jan 18, 2022
My guest on the show today is Jennifer Twiner McCarron, the CEO of Thunderbird Entertainment Group (TSX-V: TBRD) (OTCQX: THBRF). Thunderbird is a 220 million Canadian dollar market cap company listed on the TSXV in Canada. The company develops, produces and distributes film and TV programs for customers such as Hulu, Disney and Netflix. Jennifer started off as the Head of Production of Atomic Cartoons, Thunderbird’s animation division, and became CEO in 2018. Since Jennifer joined the company in 2011, the content world has changed dramatically, mainly due to the proliferation of streaming services. Given the dynamic nature of the content production industry, I was curious to hear from Jennifer about:
- How the company is positioned to continue to provide content to the large streaming companies;
- Her thoughts on the high valuations other smaller studios have been selling for recently;
- What the company plans to do with the cash it generates;
- The distinct elements of the Thunderbird culture; and
- The factors that have allowed for the stock to perform so well over the last few years
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Jan 11, 2022
Tuesday Jan 11, 2022
My guest on today’s show is Daniel Harari, the Chairman and CEO of Lectra. Lectra is a 1.5 billion Euro market cap company based in Paris, France. Lectra provides software, automated cutting equipment, and other services that enable customers to automate and optimize the design, development, and manufacturing of many different products. Specifically, the company has built a leading position in the automotive, fashion and furniture categories. Daniel has been the CEO of Lectra since 2002 and has overseen a significant amount of revenue and EBITDA growth during his tenure. Given the company’s track record, I was very interested to hear from Daniel about:
- His background and how he got involved with Lectra;
- The company’s move to more of a Software-as-a-Service or SaaS business model;
- The rationale for recently making Lectra’s largest acquisition ever;
- Business model elements that allow for high gross margins and customer retention;
- How the company’s culture has evolved over time
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Jan 04, 2022
Tuesday Jan 04, 2022
My guest on the show today is Stan Bergman, the Chairman and CEO of Henry Schein. Henry Schein is a Fortune 500, 10.6 billion dollar market cap, global distributor of medical and dental supplies and equipment. Stan has been CEO since 1989 and actually took the company public in 1995 for a split adjusted price of $6. From a revenue base of around 1 billion dollars in 1995, the company has grown to over $12 billion today and the stock price has appreciated to over $75. And, these numbers don’t even include the animal health business that was spun off in 2018. That company, Covetrus, currently has a 2.4 billion market cap on its own. Given Stan’s long track record of success, I was looking forward to talking to Stan about:
- The importance of dental health as a component of overall health;
- The company’s long-term track record of compounding earnings per share;
- Why the medical division has seen such rapid growth;
- The company’s international growth strategy and associated opportunities;
- Henry Schein’s unique culture
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Dec 28, 2021
Tuesday Dec 28, 2021
My guest on the show today is Bruce Young, the CEO or Concrete Pumping. The company has a 485 million dollar market cap and is the largest domestic player in a niche of construction-related services that is called concrete pumping. Bruce became CEO of the company back in 2008 but started his career in this industry way back in the 1980s. Concrete Pumping provides a high margin, mission critical service to its construction partners and has the ability to deploy capital at attractive multiples as it helps the industry consolidate further. Given that Concrete Pumping is rather new to public markets, I was very curious to hear from Bruce about:
- How the company generates such high margins and recognizes very high returns on incremental investments;
- The ongoing roll-up opportunity the company has—as well as avenues for organic growth;
- The capital allocation process the company employs when deciding between M&A and adding new equipment
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Dec 21, 2021
Tuesday Dec 21, 2021
My guest on the show today is Robert Bryant, the CEO of Axalta Coating Systems. Axalta is a 7.6 billion dollar market cap company that manufactures and distributes high performance coatings that go into the industrial, automotive and refinish end markets. The company was originally a division of DuPont that was founded in 1866 but was carved out by private equity firm Carlyle—and then taken public in 2014. Axalta is the global leader in providing coatings to auto body repair shops and is a top 3 supplier to auto OEMs. The COVID-induced lockdowns and the subsequent supply chain issues—not to mention the ongoing semiconductor shortage that is plaguing the car companies—have presented a number of challenges to the company. Given the dynamic backdrop and the recovery the company is seeing in certain markets, I thought it would be an opportune time to catch up with Robert about:
- The evolution of the company since going public in 2014;
- The long-term growth opportunities within the global refinish market;
- What it was like to have Berkshire Hathaway as the company’s top shareholder;
- How the company is navigating rapid raw material inflation and shortages
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Dec 14, 2021
Tuesday Dec 14, 2021
My guest on the show today is Peter Holt, the CEO of The Joint Corp. The Joint is a 1.4 billion dollar market cap company that operates and franchises a chain of chiropractic offices. The company currently has over 600 total locations in about 35 states. Peter took the reins as CEO of The Joint in 2016 and has overseen a stock that has appreciate from under $3 in 2016 to over $90 today. In fact, the company was distinctly unprofitable when Peter became CEO but has since started generating very healthy margins with limited capital expenditures. Given all of the recent success, I was excited to talk with Peter about:
- The demand drivers that have been propelling the company over the last five years;
- The elements that have allowed the stock to appreciate so rapidly in recent times;
- How the company tries to distinguish itself from competitors and build a moat;
- How he goes about making sure the company doesn’t grow too fast; and
- How Peter thinks about creating win-win relationships with franchisees.
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Dec 07, 2021
Tuesday Dec 07, 2021
My guest on the show today is Ben Gliklich, the CEO of Element Solutions (Ticker: ESI), a 5.5 billion dollar market cap specialty chemicals company. Element Solutions was formerly known as Platform Specialty Chemicals and was founded by Martin Franklin of Jarden fame—with the help of Bill Ackman from Pershing Square. The company was designed to be a roll-up but, after some initial success, it was derailed by an over-levered balance sheet. Ben became CEO in 2019 and since then has overseen a process by which Element has reduced business complexity, fixed its balance sheet, and has proven out its claims regarding its resilient margin structure.
Given that the company provides products that facilitate the fabrication of semiconductors, Element has a front row seat when it comes to all of the issues regarding the global chip shortage. Accordingly, I thought it would be a great time to talk to Ben about:
- His path to becoming CEO and what he has learned about leadership along the way;
- How the company is navigating all of the customer disruption tied to chip shortage;
- The megatrends that are poised to propel the business over the next decade;
- How the company is approaching M&A and leverage after the initial stumbles at Platform Specialty; and
- From where Element Solutions derives it moat and pricing power
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.
Tuesday Nov 02, 2021
Tuesday Nov 02, 2021
During Season 1 of Compounders, we interviewed 12 public company executives from a variety of industries. The companies profiled ranged from two Fortune 500 insurance companies to a sub-$500 million market cap supplier to the medical device industry. In this episode, we discuss some of the key lessons and learnings from Season 1 by selecting our favorite vignettes from each episode. We also give a sneak preview of what is lining up to be an even better Season 2 of Compounders.
This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/
To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.
For more information about Cove Street Capital, please visit: https://covestreetcapital.com/
iTunes: https://apple.co/3xlUvPY
Spotify: https://spoti.fi/3jxkxLl
Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.
All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable.