Peter Barklin explains how to find whether a business has a competitive advantage as that is what will give you the best stock market investing returns.
How To Invest In Stocks With Hedge Fund Manager Peter Barklin
Lee Ainslie's Maverick Capital had a difficult third quarter, although many hedge funds did. The quarter ended with the S&P 500's worst month since the beginning of the COVID pandemic. Q3 2021 hedge fund letters, conferences and more Maverick fund returns Maverick USA was down 11.6% for the third quarter, bringing its year-to-date return to Read More
Well thanks. Thanks man. I think there are many differences but one of the interesting ones is that. And I think you should mention that the kind of consarn thing we did was not any kind of consulting strategy consulting which we defined as the most important issues that face the company or a company's management. So we went to see companies of course constantly and we had quite a few clients around the world. And every time we came to visit the CEO for the first time. Knowing full well that this you know that would be a bill for the services. There was that's hardly an end to the number of problems that that the company will lay out. And that's of course that's the nature of business. There's a lot of issues that have to be taken care of and developed. But as an investor when I go and visit companies and I have yet to hear of one CEO mention one problem unprompted you know of course we ask them for problems that we think they might face to hear their opinions. But. But other than that they do not want to see a problem there. I think maybe the best or the most important qualification to be a CEO is to be a great salesman. So. So. How do they get that. Well I mean obviously that we just have to realize that that's the position is the natural state of affairs. So you know that actually it goes deeper than this because there are things we can ask them. That. Because of all the stock market ethical rules even. Every time a company answers a question to us. That is of any relevance about the company. They actually have to make the same information available to all other investors. So in actual fact very little that we can find out. By asking management not only very little we can find out but very little we can find out that everybody else doesn't know. So. I think that's that's one of the key things about that.
We are consulting experience. Can you find those things that perhaps other people don't see.
Yes. I think sometimes we can be something we would ask questions that investors would not usually ask. We are very very keen on competitive advantage. He said the company needs to be able to explain why it can do what it does better than the competition. And you know we have ourselves a long list of things we asked about companies and to ask for clarification about that is something that is I mean for example what is the meaningful difference between one company's products and another company's products. And some will explain. And that's you know and these are not secrets but these are some things that we would take into consideration.
Speaking of competitive advantages would you elaborate on the strategy of your fund and what are you focusing on. Our funds focus I mean we have a sentence that is relatively small companies companies that are exposed to growth.
And companies that we can buy for a reasonable price value companies. And. For all of this companies that have profitability that can be protected from the competition and that is that are just a way of defining competitive advantage that the advantage is that the profits you make as a company can be protected from the competition because you know that every time a company shows quavery results. They'll be competitors are potential competitors out there who wants to take those profits away and they will. And I strongly believe in markets these days. And you know when somebody.