Joys of Compounding

Spotify: open.spotify.com/episode/06OI84… Apple: podcasts.apple.com/gb/podcast/cha…?

We were super-inspired by the description Jan Mohr gave of how he views new 'co-founders' in each step of the multi-decade journey at CHAPTERS Group @PaulBuser @buhrman_rick

Spotify: open.spotify.com/episode/06OI84… Apple: podcasts.apple.com/us/podcast/cha…

Our teacher today is Jan Mohr, CEO of CHAPTERS Group, a publicly traded, serial acquisition holding company on its way to becoming one of Europe’s technology champions. 🏆 🇪🇺 CHAPTERS originated from a small software startup near Frankfurt in 1998. After selling the core business to a strategic buyer in 2018, the company pivoted to create a preferred home for mission-critical businesses across Europe. Over the past five years, CHAPTERS has founded four distinct acquisition platforms, acquiring around 60 operating companies. This impressive M&A machine has resulted in CHAPTERS’ stock appreciating nearly 10X during this period. 📈 🚀 At the crux of our discussion is the rise of artificial intelligence, which is reshaping the business landscape. Companies worldwide are now considering AI's threats, opportunities, and implications. The software industry, in particular, is experiencing vibrant discourse around AI's transformative potential, driving efficiencies, expanding total addressable markets, and delivering tangible customer value. We also explored several important topics: - Leading in times of accelerated change by empowering everyone in the organization to become "teachers, preachers and implementers" of AI. - CHAPTERS is backed by a concentrated group of long-term, strategic investors, including Mitch Rales, Daniel Ek, and Will Thorndike. Their support provides a critical permanent capital base alongside ongoing strategic value. Jan shares insights on how his team and board have fostered a winning culture through their Manuscript Method, while maintaining a decentralized, entrepreneurial spirit. With that, we hope you enjoy this session with our good friend, Jan Mohr! Links in comments. @PaulBuser @buhrman_rick @portraitanalyst @joincolossus

Spotify: open.spotify.com/episode/5jG0ZU… Apple: podcasts.apple.com/bw/podcast/les…

Takeaways from our time with investing legend Steve Mandel, founder of Lone Pine Capital! @buhrman_rick @PaulBuser

So proud of my friend Brad Gerstner @altcap! He's been tirelessly (and selflessly) working on this vision for years. To put the joys of compounding to work for every American child. 🇺🇸 We all owe him much respect + gratitude. Thank you BG! 💙 #lovewins #joysofcompounding

Will Thorndike - The Rise of Long Duration, Serial Acquisition Holding Companies Our @joyscompounding teacher today is Will Thorndike, co-founder of @CompoundingLabs and author of acclaimed book, The Outsiders. This is one of the most foundational JOC sessions we’ve ever done because of how much Will has shaped our combined teaching and investing vocations. 🥰 The Outsiders is considered one of the most impactful business books of the 21st century. Lauded by @WarrenBuffett and so many others, it profiles eight CEOs who dramatically outperformed their peers by focusing not on charisma and cult of personality attributes, but on the more quiet and unconventional craft of resource allocation—measured, rational, often contrarian decisions that compounded to extraordinary heights over time. But Will’s influence goes far beyond the page. He is a pioneer in the private equity and search fund worlds, having founded Housatonic Partners in 1994 and also helping originate the modern search fund model—backing early-career CEOs to buy and grow businesses with long time horizons and radically aligned incentives. Since then, he has invested in the majority of the top 20 search fund outcomes to date, including @Asurion, which he recently profiled on his podcast 50X. You may not have heard about Asurion but it is likely the greatest private equity investment of all time, generating a more than 5,000 times multiple on invested capital. 🤯 In more recent years, Will’s taken the best of what he’s learned from the PE and Search worlds and is now developing what we think may be an ENTIRELY NEW ASSET CLASS - long-duration, serial acquisition holding companies. Here are some of the structural and operational features of these businesses: - These are newco formations that are effectively capitalized on day 1 at book value - They focus on buying & building recurring revenue businesses in niche markets - Radical equity efficiency - with often just $10 - 25 million of equity capital deployed forever - An ethos of exceptional resource allocation → very much aligned with the Outsiders playbook - The harnessing of both organic AND inorganic growth with a focus on improvability with the assets they acquire - And, very importantly, these are investors backing founders with an unlimited time horizon and with a focus on ‘multiple on invested capital’ rather than IRR The alchemy of these attributes are companies that don’t exist to be sold but rather to eternally flourish ♾ – an asset class that harnesses the joys of compounding better than anything else we’ve come across. 📈 I hope you enjoy this class on the rise of long duration, serial acquisition holding companies with our friend and mentor, the eternal outsider, Will Thorndike! Links in comments.

We are hard at work creating the definitive course on compounding that we always wanted but never had. We hope it contributes toward democratizing the curriculum of compounding.

My younger kid with a home run in his final at bat at Cooperstown this week.

@jjtejkl @patrick_oshag Art of Investing!

@patrick_oshag @artofinvest Do you recall which class he was teaching?

Reposted on the Invest Like the Best feed today is a conversation with Mitch Rales, the co-founder of Danaher. He’s hosted by @artofinvest There are so many concepts to take away, I can’t list them. But one really stands out to me: benchmarking When I first met Mitch, teaching a class at Notre Dame, he walked us through a practical example of benchmarking. As the new owner of the Commanders, he was on a tour to talk to as many people running and designing football stadiums as possible. He wanted to learn from their successes and mistakes before applying He has always gathered ingredients from other best-in-class people and companies (the benchmarks) and then recombined those ingredients into his own recipe. This is really easy to say you’ll do, but hard to actually take seriously. He was flying around the country just to benchmark one aspect of one part of his overall responsibilities. He left our class and went and did it with the ND stadium head. One question I was left with: if you aren’t willing to go and study the greats in your field, in depth, with all the time and attention that takes, are you tackling the right thing? Danaher constantly remade itself, shedding old skin and chasing the next opportunity. Such a fun and educational listen.

A sample of conversations to come on @InvestLikeBest - Marc Lasry - @bgurley and @mjmauboussin together - @ncsh - @dittycheria - 2 hours of Mitch Rales (on @artofinvest)

@CyrusYari @rationalvc @naval Great stuff. Keep going!

the @rationalvc pod had regularly been in top 50 charts of many countries, but it had never broken into UK/US/anglosphere top 50 charts of our respective categories (tech/investing/biz etc) thanks to tweet by NNT, like by @naval, tweets by many big authors & founders (❤️), the recent Black Swan ep did numbers, reached #38, & we were ahead of (or v close to) a few other big names in the charts such as: -@InvestLikeBest / @patrick_oshag / @ReustleMatt / @bizbreakdowns -@HarryStebbings -@artofinvest -@TIP_Network -@APompliano & many more. it's a nice sign of our work to be up there but not smthin to obsess over given each of our episodes since pivoting serves more like an audiobook, hence our publishing schedule is more irregular a la @AcquiredFM (& so we'll be up/down in/out of charts for now). this is because each of our megasodes serves as an evergreen timeless 2 or 3+ hour discussion on a Lindy book, each ep serves like a book itself given the profound prep required (see here re our prep: x.com/iman_olya/stat… ) anyway, i recently read a tweet by @david_perell stating that he wishes audio books sounded more like a friend reading the book to you. ha, well, now you have @rationalvc for ~3 hours you feel like a friend in the room listening to us discuss a Lindy book. the idea is that unlike pod interviews, these will still be relevant 100 yrs from now :) this is my life's work, we're just warming up. pods & essays for now, eventually books too. been doing this & tinkering for a while until we landed here. in a sea of reactionary content, join us on our journey as we seek out the Lindy. this will serve you much better in day-to-day whether it's in business or in life. "The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can." — NNT cc @iman_olya

@InvestLikeBest So are the best podcasts. @FoundersPodcast @AcquiredFM @InvestLikeBest

Anne-Marie Peterson is a portfolio manager at Capital Group. She and her team manage over $260B. We asked her what great retailers have in common: “The best retailers are cults.” Take Costco. Management all started in their stores. They don’t recruit externally. They dress the same, they talk the same language. They have rituals - they all fly to Seattle once a month. The 10% markup is like religion. The hotdog will be $1.50 no matter what. And their customers love them. It’s a cult. So is Home Depot. They’re obsessed with the customer experience. They even have a motto, “bleed orange”. Lululemon is another good example Anne-Marie told us about. What other retailers would you classify as cults?

@AswathDamodaran Power law alive and well in public markets too.

Seven stocks (Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia, Tesla) added $5.1 trillion to their market cap in 2023, accounting for about 55% of the $9.2 trillion added during the year by all 6658 US firms. bit.ly/4bsNEcB

Spotify - open.spotify.com/episode/271y47… Apple - podcasts.apple.com/au/podcast/iri…

Our teachers today are Iris Rubin & Greg Maged, co-founders of SEEN, the fast-growing, good-for-your-skin haircare company creating a new category at the intersection of science, health & beauty. This was such an inspiring conversation and I hope you enjoy. Links in comments!

@FrankAFetter @mjmauboussin @wolfejosh These are all excellent teachers welcome any time in the AOI classroom!

@artofinvest guest requests: Stanley Druckenmiller Paul Tudor Jones @mjmauboussin @wolfejosh