The Hikecast is a show where interesting people take me on their favorite hikes or walks and we talk about big ideas in an unconstrained format. No planned agendas, just deep conversations, recorded out in nature.
The idea is for you to put on The Hikecast and get outside to simulate taking a hike with us. I want you to feel like you’re there.
Care to join us for a hike?
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More
My guest for this episode is Tobias Carlisle. Toby is principal at Acquirers Funds, LLC, and serves as chief investment officer. He is best known as the author of Acquirer’s Multiple, Deep Value, Quantitative Value, and Concentrated Investing. He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law.
We went on a blustery morning hike in Southern California.
Please enjoy this hikecast with Toby Carlisle.
The Hikecast 6: Tobias Carlisle Talks Oil And Gas, Beef Cattle And Animal Husbandry
So I thought we would maybe start off with where you grew up. I know it's Australia but maybe some more specifics about that because I don't know if we've ever actually talked about that before. What were your what your childhood was like.
Just to make it an authentic intro. So yes. I grew up in Australia. I grew up in Queensland which is sort of like. It's the northeast states in Australia. So it's kind of hotter and it's kind of tropical subtropical and it's like oil and gas, Beef cattle, broadacre grain growing state lots of tourism as well it has the Great Barrier Reef and the Gold Coast, Noosa, which is sort of surfing destinations and it has fun of Queensland the sort of rainforests and things like that but I grew up in a little country town which is kind of like the middle of a stranger is a gigantic desert. Yeah and I grew up right on the edge of that desert in a place called remote which is about about six hours drive west from Brisbane which is the sort of the capital city of Brisbane has two million people in it. Bryanna has about 6000 and its oil and gas so Schlumberger and Halliburton were kind of big employers there. And in a lot of my friends at school that came from a beef cattle property because it has the largest saleyards in the southern hemisphere. And lots of broadacre wheat and grain.
Growing crops like sorghum and barley and other things like that. So I grew up with. Lots of kids who have. Kids of farmers kids have kids who their parents were Roosh. It is things like that so people could go out hunting for. Kangaroos and wild pigs and I'd sell them for roof shooter and that's a thing. Yeah that's a joke. I think it's a particularly well-paid job because it is too much fun. That's why. I think yeah they sell them to dogfight basically. So there's not. It's not a huge margin business. But, you know that there are kangaroos basically if they're pests because they eat the grain so that the farmers are happy to have people in to clear out and to clear out the roos and the pigs the kind of they are and forget what you call it like an introduced species and they kind of get it. Yeah invasive that's the way yeah and then great for the local wildlife so they go out and hunt them and shoot them in a lot of my friends like that to this day like on Facebook friends with all these guys I see the day expeditions they're hunting and you go out like in the middle of the night and you take. Hunting dogs and they wear the Like A. Chest plate and then the dogs bring down these gigantic pigs. I don't know how much they weigh like a thousand pounds. The huge animals. And these guys you know kill them with knives basically like that and actually shoot them a lot of the time they get in there and. They kill them at night and then they're hanging them up on it take a photo of it on Facebook so. That was that was the first 15 years of my life. The high school and went to grade 10 so I went away to high school for 11 and 12. And that was in the big smoke in the city in the two million in Brisbane.
So you actually left like you didn't live with your parents the last couple of years.
No, I was in boarding school for two years and then went to university and did business and like an undergraduate business degree and a law degree.
What made you go towards law. What was that was intriguing about that.
It's a it's a funny question. Like when I grew up in that little town I'd really only thought there were three kinds of professional jobs you could have picked up to be a doctor. And I just hate the sort of blood. And I figured that out because I was one of the subjects that I did was animal husbandry where. Animal husbandry is like looking after farm animals so you have to know you we did shearing a sheep was one of the things that we did yeah. And then. Giving them you know giving them vaccinations know get to get cattle and chopped and nuts of knock the horns of all that sort of stuff and I just real you know doing that. It's pretty it's pretty confronting. I've never passed out in my life but the closest I ever came to passing out was when they did the mule thing of the sheep. So she'd get four out of one and I get. There these blowflies that lay their eggs around the dogs around the bottom Yeah. And they kind of borrowing. So the way that you get around that is you you will have to shift a bomb every day but every so often. But. You know there's a huge.