Weekend Thoughts: Quality Traps, Pitching Ideas, and Financial Education
Tying up some odds and ends this holiday weekend
Calling an Audible
If you follow me on Twitter, you know that I hinted a company for April’s Flyover Stocks profile and ended up changing it out for Packaging Corporation of America.
I plan on covering that company in April. I’ve spoken with management and did my initial research, but felt the level of research wasn’t where it needed to be to do a full write-up.
Quality Traps
Last week, I sent a video presentation to premium Flyover Stocks subscribers on avoiding quality traps and intended to release it to all subscribers a few days ago.
Unfortunately, I botched the email distribution to free subscribers, so I am posting it here. Please let me know if you’d like to see more of these video presentations!
Pitching stock ideas
John Rotonti of The JRo Show published another great podcast interview this week. This time with Win Murray, the director of research at Diamond Hill and formerly the DoR at Harris Research/Oakmark Funds.
I’ve had the privilege of speaking with Win about investing and was looking forward to this episode. It doesn’t disappoint.
I’m not sure anyone in the industry thinks through running a team’s investment process more than Win does. I was particularly drawn to how he positioned the process around what best serves the client. For example, make sure your best analysts are doing what they do best and not getting bogged down in lower-ROI activities. This is what’s in the client’s best interest, so that’s how the process should be structured.
In the episode, Win mentioned why he thinks stock pitches should be short and sweet - 3 pages maximum - and not on PowerPoint slides. I agree this is the correct approach for pitching ideas to a large team where time is a factor. Far too often, pitches take the form of book reports, aren’t forward looking, or bury the lede. PowerPoints are short, but don’t provide enough information.
Here at Flyover Stocks, the company profiles are much longer than three pages, but I’m not aiming to pitch you ideas in a busy meeting. Rather, I want tell you about interesting companies that often get overlooked and provide you with a 360 degree view of the business.
Ultimately, this is how you build conviction in a name and we have time in this setting to flesh out ideas. Sometimes the profiles are immediately actionable, sometimes it’s better to wait for a better price.
Here’s a link to the JRo episode with Win Murray:
Financial education
In my last classes before spring break, I put together a brief presentation on how to save for retirement. We talked about 401ks and 403bs, Roth vs. Traditional, stock options and RSUs, and more.
Since we’d covered stocks, bonds, compound returns, portfolio theory, etc., the content resonated in ways that wouldn’t have been possible earlier in the semester.
It was neat to see the information start to click in practical ways and we had some great conversations in my three sections.
I’ll write more about teaching in a few weeks, but this particular lesson drove home how much time proper financial education takes. It’s great that more elementary and high school curriculums are integrating basic financial education, but there’s a lot of foundational work that needs to be done before it starts to click. As with anything worth doing, financial education takes time and persistence.
Podcasts
I’ve been on two podcasts in recent weeks.
One was with my old colleague at The Motley Fool, James Early. Don’t worry, we’re not interrupting each other during the episode - unfortunately, our audio didn’t perfectly sync up.
I was also on Australia-based Shares for Beginners with Phil Muscatello.
Thanks again for your ongoing interest in Flyover Stocks.
Happy Easter!
Stay patient, stay focused.
Todd
At the time of publication, Todd and/or his family do not own shares of any company mentioned.
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