The Fund That's Beaten the Market for 45 Years by Focusing on What Could Go Wrong

The Fund That's Beaten the Market for 45 Years by Focusing on What Could Go Wrong – The Acquirers Podcast

Market views

Bullish

DSY— Dassault Systemes is a global leader in industrial CAD software with high switching costs, network effects, and sticky customers. Trading at less than 4x sales vs 8-10x M&A multiples after SaaS selloff, despite mission-critical software with strong competitive moat.
WALMEX— Walmart Mexico offers same business model and expertise as Walmart US but at much earlier growth stage with decades of store expansion ahead. Trading at 15x earnings vs 40x for US parent, representing significant discount for identical business model in less mature market.
SCCO— Grupo Mexico owns irreplaceable rail network in Mexico and low-cost copper mines positioned to benefit from AI infrastructure buildout requiring significant copper. Acts as toll road on hundreds of billions in data center spending.
CL— Colgate has 40-45% global toothpaste market share with high switching costs and entrenched dentist relationships. Medical components and trust factors differentiate it from ordinary consumer staples facing social media disruption.
GOOGL— Alphabet has formidable AI positioning with distribution advantage, Gemini integration, TPUs, and Google Cloud. Management team highly respected, and $80B capital raise represents modest dilution relative to $185B operating cash flow and market cap.
DEO— Diageo trades at valuations not seen in long time despite century-old premium spirits brands playing premiumization trend. 'Drink less, drink better' secular shift favors premium spirits over beer in developed markets.
HLN— Haleon owns Sensodyne toothpaste brand with strong dentist relationships and medical components. Benefits from same dynamics as Colgate in resisting social media disruption of consumer staples.
REALASSETS— Structural shift toward multipolar geopolitics and self-sufficiency requires going 'back to the periodic table' with real infrastructure buildout. Historically favors international and emerging markets over US growth stocks, with US equity markets having only 5-10% exposure vs First Eagle's 30%.
GLD— Gold serves as uncorrelated hedge that works inversely to equities during crises. Unlike derivatives, investors get paid to hold the hedge as gold has historically maintained purchasing power, compounding high single digits since Bretton Woods collapse.

Bearish

BEER— Beer companies in developed markets face secular decline as cultural shift away from casual alcohol consumption takes hold. People drinking less often and less casually, with home consumption declining.

Not investment advice.

Mentioned

Market views