market folly

This week, we're posting up the various "Talks at Google" that focus on investing.  These typically feature authors of well known investment books.  Next up is William Thorndike who talks about his popular book, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success.

This book was recommended by Warren Buffett in his 2012 annual letter. The Outsiders basically looks at 8 CEO's that have excelled at capital allocation and shareholder value creation.

The book almost has a cult-like following in that investors have latched onto the fact that management is a critical part of any investment.  As such, investors are always trying to find the next 'Outsider.'  This book has also been referenced in numerous hedge fund letters over the years.

In his talk, Thorndike talked about certain CEOs who might potentially fit the mold in today's markets.

- Jeff Bezos (Amazon.com ~ AMZN): Though he admits to not studying the company too terribly in-depth, he believes Bezos is probably the best CEO example in tech given his 5-10 year focus on per share value.

- Nick Howley (TransDigm Group ~ TDG): Specialized aircraft components roll-up.

- Rales Brothers (Colfax ~ CFX): This is a re-up of the playbook they ran at Danaher, but with more cyclical businesses to start.

- Mark Leonard (Constellation Software ~ CSU.TO): Software

- Mike Pearson (Valeant Pharmaceuticals): He said it was still 'early days' in assessing this one, but obviously this one has kind of blown up.  It should be noted that Thorndike's talk was published on October 2015.

- ArchRe

- Mini Berkshire insurance companies: WhiteMountain, Allegheny, Fairfax, Markel

- NVR: Homebuilder


Embedded below is the video of William Thorndike's Talk at Google:



If you haven't already, be sure to pickup a copy of The Outsiders.