The Intellectual Investor
How would a value investor like Warren Buffett look at today's crazy markets? What stocks would he buy? And what would he say about today's much-loved or much-hated companies?
Featured in FT, Fortune, and Barron's, Vitaliy Katsenelson's articles on value investing, classical music, and life in general have already generated something of a
Lately, Vitaliy has been pondering whether and how to instill a love of classical music in his kids, a passion that was passed to Vitaliy from his own parents. Should he insist on piano lessons, or weekly listening sessions? Reflecting on his experience growing up, Vitaliy shares what is behind his love of classical, as well as a lesson on how to impart one's values to one's children. You can read this article online here-> https://contrarianedge.com/torture-kids-classical-music/
Svenska Handelsbanken, The Value of Book Value, and a Free Value Investing Course for Students - Ep 91
In this podcast, Vitaliy discusses his investment in Swedish bank Svenska Handelsbanken, and what makes their culture so unique. He then gives a short explanation on when book value works as a measure of intrinsic value, and why it often doesn't. Finally Vitaliy makes an announcement that should be of interest if you are a college student with a passion for value investing. You can read these articles online here: https://contrarianedge.com/svenska-handelsbanken-and-how-to-use-book-value/ and https://contrarianedge.com/free-value-investing-curriculum-for-college-students/ Sign up link-> https://imausa.com/signup-for-students/
In this podcast, Vitaliy describes the next adventure his son Jonah will have going to college from Hawaii, as well as the role that defense stocks play in IMA's portfolios today. You can read these articles online here: https://contrarianedge.com/jonah-doing-jonahs-thing/ and https://contrarianedge.com/defense-stocks/.
In Part 2 of Vitaliy's interview with Aznaur Midov on the Accent Podcast, Aznaur and Vitaliy continue their discussion on investing and life. Vitaliy explains how time can slow down when investors face a loss and what to do about it, how investing is evolving, the difference between work and productivity, and a personal finance hack Vitaliy uses. Vitaliy ends with a story about his time in the Navy, and his favorite country to visit (hint: it's not a country). Enjoy! You can listen to part one here.
In November 2019, Vitaliy had the pleasure to sit down with Aznaur Midov, fellow Russian immigrant and host of the Accent Podcast, to talk about Vitaliy's story and lessons from 20 years of investing. In part 1 of a 2 part podcast, Vitaliy shares his thoughts on how value investing has evolved, the difference between value and "growth at a reasonable price", the role of diversification and rebalancing, and how he finds new stock ideas. Enjoy! You can listen to part two here.
Vitaliy hated every minute he spent working on this podcast, because he got close to a line he doesn't like to cross – the politics line. It was particularly painful because it made him think more about the negative changes that are happening to the country he loves. But as investors, we have to think about how changes in the world impact our portfolio. Here's how Vitaliy considers the role of the US Dollar in tomorrow's world. You can read this article online at: https://contrarianedge.com/beloved-country-unloved-hedge/
Vitaliy was recently asked by the CFA Institute to give a talk in London. But this offer was even more interesting than usual: it was a joint presentation with Guy Spier. Guy is a tremendous value investor who happens to be a good friend of Vitaliy. He was born in South Africa, spent his childhood in Iran and Israel, received an MBA from Harvard, and in 2008 got sick of the New York hedge fund rat race and moved with his family to Zurich. In this podcast, Vitaliy shares his friendship with Guy, and reviews his excellent book, The Education of a Value Investor. You can read this article online at: https://contrarianedge.com/what-i-learned-from-value-investor-guy-spier/
Vitaliy was recently going through a new client’s portfolio and found it full of the likes of Coca-Cola and Campbell Soup - pseudo-bond substitutes. Each one is a stable and mature company. Your mother-in-law would be proud if you worked for any one of them. But their days of growth are in the rearview mirror. In this podcast, Vitaliy explains a key distinction in investing: the difference between a good company and a good investment. You can read this article online at: https://contrarianedge.com/good-companies-dont-always-make-good-stocks/
Santa Fe and Vitaliy's family go way back to the early 90s. It all started with his father, Naum, and his stepmother. Naum had his paintings exhibited in a gallery on Santa Fe’s famous Canyon Road. A few times a year, the Katsenelsons would load up paintings in a minivan and drive them to Santa Fe. Now, Vitaliy takes his kids there every year, in what has become a sacred tradition. You can read this article online at: https://contrarianedge.com/santa-fe-remember-this/
Tesla’s market cap just crossed $300 billion. It’s the largest car maker in the world, even larger than Toyota, which produced almost nine million cars in 2019 and had a market cap of $200 billion. In this podcast, Vitaliy hypothesizes that Tesla's market cap has traveled through a wormhole from the future to the present, and why $300 billion is a tenuous valuation, even for the world leader in electric vehicle manufacturing. You can read this article online at: https://contrarianedge.com/teslas-stock-price-discounts-temporal-wormhole-into-the-future/ Vitaliy's 37-page Tesla writeup signup link. Vitaliy's Nifty FAANG and Other "One Decision" Investment Strategies article.
Vitaliy had the pleasure to sit down with the Reformed Broker himself, Josh Brown on his podcast The Compound. What follows is their conversation, in which they discuss why the price you pay for a stock always matters, no matter how good the quality, and then they go through some historical examples. Vitaliy hopes you enjoy it! You can view this interview online here-> https://www.youtube.com/watch?v=pcqeUmTq2IY&t=229s You can read article "Nifty FAANG and Other "One Decision" Investment Strategies" in this link: https://contrarianedge.com/nifty-faang-and-other-one-decision-investment-strategies/ or listen to episode #78.
In investing, one of the most important traits an investor can have is intellectual flexibility. Buffett, for example, is very dispassionate about what he owns; he has the ability to change his mind. In the early part of 2020, he was the largest shareholder of US airline stocks, and was actively buying more, only to sell them a few weeks later. This quarter, Vitaliy did something similar with a company his firm, IMA, admires. In this podcast, Vitaliy explains what that company was, and why it matters. You can read this article online at: https://contrarianedge.com/when-the-facts-change-we-change-our-minds-anatomy-of-a-sale/
In this mini-podcast, Vitaliy shares a personal story that illustrates how profound even a tiny shift in perspective can be. You can read this article online at: https://contrarianedge.com/perspective/
Vitaliy was on PBS NewsHour talking about Uber Eats and the food delivery business. When he told his six-year-old daughter Mia Sarah about it, she shrugged and said she’d be more impressed if he was on PBS Kids. The five-minute recorded interview was cut down to literally four seconds, so here are Vitaliy's further thoughts on both the Uber Eats and Ridesharing businesses. You can read article online at: https://contrarianedge.com/uber-delivering-food-and-my-4-seconds-of-fame-on-pbs-not-pbs-kids-unfortunately/
In the 1960s and 1970s Nifty 50 stocks were one-rule stocks – and the rule was, buy! They were bought, and bought, and bought. They were great companies and paying attention to how much you paid for them was irrelevant. Until. In this podcast, Vitaliy draws on history to show what happens when investors only pay attention to a company's quality at the expense of price. You can read this article online at: https://contrarianedge.com/nifty-faang-and-other-one-decision-investment-strategies/
Vitaliy can definitely see how we are always trying to numb our minds. We constantly need the mental organ entertained and well-numbed with external stimuli. It seems that whenever we are left with ourselves, that is, with our minds, we reach out for our favorite portable numbing device and happily lose ourselves in Facebook, Twitter, Netflix, or YouTube. We spend little or no time with ourselves. You can have a look at the pictures Vitaliy took in his morning walks in Vail here and his beautiful walks in Betty Ford Alpine Garden here. You can read this article online at: https://contrarianedge.com/de-numb-your-mind/
Vitaliy grew up in Russia, where chess is a spectator sport. Any player who takes chess seriously will carefully study opening systems – the series of first moves early in the game that lead to the middle-game formation of pieces. Because chess always starts with pieces in the same arrangement, opening moves can become somewhat routine. In this podcast, Vitaliy compares the stock market to Fischer Random Chess, in which the opening pieces are totally jumbled across the board. Vitaliy explains that investing today is like Fischer Random Chess, where the objective is the same, but the set up is unlike one we have seen in our lifetime. You can read this article online at: https://contrarianedge.com/the-fischer-random-chess-stock-market/
In April 2018, Vitaliy met with one of his best investment friends, John Mauldin. John has been an inspiration to Vitaliy both personally and professionally, but no more so in the context of writing. John writes at Mauldin Economics, one of the web's the most widely read and successful investment letters. In this podcast, Vitaliy shares how John was able to inspire him to both write better, and be a better human being. John's articles-> https://www.mauldineconomics.com/ You can read this article online at: https://contrarianedge.com/be-kind/
The average stock out there (that is, the market overall) is very, very expensive. At this point it almost doesn’t matter which valuation metric you use; they all point to the fact that stocks were only more expensive during the dot-com bubble. In many ways, knowing what to avoid is just as important as knowing what to buy. In this podcast, Vitaliy takes you through the risks in today's market, and shares his view on what NOT to buy. You can read this article online at: https://contrarianedge.com/what-not-to-buy-in-todays-stock-market/
Retail stocks have been annihilated recently, despite the economy eking out growth. The fundamentals of the retail business look horrible: Sales are stagnating and profitability is getting worse with every passing quarter. Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. In this podcast, Vitaliy shares the truth behind the demise of retail. You can read this article online at: https://contrarianedge.com/its-not-just-amazons-fault/
People often ask Vitaliy about his writing process, when he finds time to write, and how he manages to do investment research. In this podcast, Vitaliy walks the listener through his process -- from getting up at 4:30 in the morning, to researching and valuing companies, to talking to clients. For a day in the life of Vitaliy Katsenelson, give this podcast a listen. You can read this article online at: https://contrarianedge.com/the-jet-lag-series-how-do-i-work-when-do-i-find-time-to-write/
Vitaliy was slated to give a speech at a conference in Omaha, a day before the Berkshire Hathaway Annual Meeting. He was more nervous than usual. Usually, Vitaliy needs a looming deadline to build the pressure to unleash creativity. Two days before, he wrote a nine page speech titled “How to Stay Rational in an Irrational World.” On the day of the speech, there were maybe 200 people in attendance. Vitaliy stepped up to the mic to begin. Then the lights went out. You can read this article online at: https://contrarianedge.com/finding-high-quality-companies-today/
Though Vitaliy loved working from home, it came at a cost – he destroyed some good habits he built up over the last few years. In March, he worked super long hours and wanted to make sure he got enough sleep. He usually writes early in the morning, but that habit has been interrupted. He's been working proactively over the last two weeks to restore old good habits and create some new ones. You can read this article online at: https://contrarianedge.com/rebuilding-good-habits-after-lockdown/
Vitaliy always looks at IMA's investment process and asks himself, “What can we do better? How can we increase returns and lower risk?" Vitaliy thinks he has found a sensible way to do both -- by purchasing index put options, where possible, on a portion of the portfolio. Vitaliy explains the math behind this choice, and why the best time to buy hurricane insurance is when no one believes there will be a hurricane. You can read article online at: https://contrarianedge.com/options-hurricanes-hedging/
Early in his career, Vitaliy tried to emulate Warren Buffett and spurned the use of spreadsheets. But here’s the thing: Buffett has a supercomputer in his head and Vitaliy doesn't. Vitaliy needs to visualize financial statements by building models; he feels them viscerally in doing so, whereas Buffett doesn't. In this podcast, Vitaliy expands on why rather than trying to be Warren Buffett 2.0, you should be You 1.0. You can read article online at: https://contrarianedge.com/the-jet-lag-series-should-you-copy-your-heroes/
Investing Q&A: Small Caps vs Large Caps, Increasing Your Circle of Competence and Should Value Investors Buy Gold? Part 2 - Ep 67
Nearly every year, Vitaliy does a Q&A-style lecture for students at universities in Denver. But since campuses are closed, he decided to take this year's talk online. This podcast is part 2 of 2 of that recording. Enjoy! Listen to Part 1 here-> http://investor.fm/investing-qa-small-caps-vs-large-caps-increasing-your-circle-of-competence-and-should-value-investors-buy-gold-ep-66
Investing Q&A: Small Caps vs Large Caps, Increasing Your Circle of Competence and Should Value Investors Buy Gold? Part 1 - Ep 66
Nearly every year, Vitaliy does a Q&A-style lecture for students at universities in Denver. But since campuses are closed, he decided to take this year's talk online. This podcast is part 1 of 2 of that recording. Enjoy!
Vitaliy recently sat down (virtually) for a conversation with Gerhard Sogl from the CFA Society of the United Kingdom. They discussed IMA's approach to investing during the uncertainty of the ongoing COVID-19 crisis and a framework that the IMA team uses to make sense of the situation and helps them approach investing in a rational manner. You can view interview online here-> https://www.youtube.com/watch?v=BCX4UV72kl8
This had never happened before. Several clients reached out to Vitaliy wondering if he had been kidnapped and someone else was making investment decisions in their accounts. The gist of their questions was: how you can go from making conservative investments to buying a dotcom-like stock that is losing money? How can this company even be a value investment? In this podcast, Vitaliy explores his firm's investment in Uber, and how it fits within a value investing framework.
Vitaliy spoke with Danielle Town of the InvestED podcast last October. They originally sat down to talk about investing, but the conversation turned into a reflection on his upbringing in Soviet Russia, parenting, budgeting, and more. Danielle is a New York Times bestselling author of “Invested”, founder of the value investing newsletter “The Invested Practice”, and co-host of the podcast InvestED with her investor father, Phil Town. She graciously allowed Vitaliy to reproduce the interview here, so have a listen to part 2 in this episode. Listen to part 1 here -> http://investor.fm/invested-interview-part-1-ep-62
Vitaliy spoke with Danielle Town of the InvestED podcast last October. They originally sat down to talk about investing, but the conversation turned into a reflection on his upbringing in Soviet Russia, parenting, budgeting, and more. Danielle is a New York Times bestselling author of “Invested”, founder of the value investing newsletter “The Invested Practice”, and co-host of the podcast InvestED with her investor father, Phil Town. She graciously allowed Vitaliy to reproduce the interview here, so have a listen to part 1 in this episode.
A few weeks ago, Vitaliy and his daughter Hannah got up at 6 in the morning and drove more than an hour so she could play in her team's volleyball tournament. Hannah’s team played four other teams, and each game had two or three sets. Hannah stood on the sidelines for all the games and did not touch the ball even once. Vitaliy was really upset, at first. But what Hannah said next surprised and inspired him. You can read article online at: https://contrarianedge.com/the-jet-lag-series-there-is-no-i-in-hannah-but-there-are-two-in-vitaliy/
This is an announcement Vitaliy shared with his newsletter readers and he thought you, his podcast listeners, might want to hear it as well. It will be removed from this podcast stream when it’s no longer relevant. Vitaliy was finally able to do something he's tried to do but could not for ten years: he's built a dividend portfolio that’s “all-terrain” and that yields … well, you’ll have to listen to the end to find out. You can read article online at: https://contrarianedge.com/the-all-terrain-dividend-portfolio/
While in Venice, Vitaliy, his brother, and son visited a glass factory and watched a glassblowing demonstration. The glass artist took a ball of molten glass, stuck large forceps into it, and magic happened – he pulled a horse’s head, body, legs and tail out of it. A few strokes with a metal blade and they had seen the "birth" of a beautiful glass horse. After they left the factory, Alex, Jonah, and Vitaliy walked the streets of Murano, discussing whether this fellow was practicing an art or a craft. You can read article online at: https://contrarianedge.com/the-jet-lag-series-art-or-craft/
Vitaliy recently spoke with Andrew Horowitz at “The Disciplined Investor” podcast. Andrew graciously allowed to share Vitaliy's part of the interview with the Intellectual Investor audience. The discussion centers around this recession and why it’s not like any other previous one we’ve experienced. It also covered about why it’s the best thing that could’ve happened to IMA clients' portfolios, what IMA's game plan is going forward, and how it's “microdosing” stock purchases to deal with the uncertainty of this time. Finally, Andrew and Vitaliy discuss assumptions Vitaliy is making about the future, what stocks he's looking at right now, and what companies might not survive this crisis. Original Interview here-> http://thedisciplinedinvestor.com/blog/2020/03/21/tdi-podcast-investment-microdosing-654/
In this podcast, Vitaliy shares a recent (brief) letter he wrote to clients about how he and his firm are responding to Coronavirus and the recent selloff in the stock market. After touching on the day to day at IMA, Vitaliy elaborates on how he is taking advantage of volatility to buy great businesses at wonderful prices. He hopes you enjoy it! You can read this article online at: https://contrarianedge.com/markets-in-turmoil-our-game-plan/
Vitaliy wrote the following in early February after his trip to Europe (as part of the Jet Lag Series), which started in Switzerland and concluded in Italy (Venice to be exact). Yes, the part of Italy that today is devastated by coronavirus. He missed the virus by only two weeks. In that short amount of time we have transitioned into a different world – a new era. Since then, this podcast has taken on new meaning for Vitaliy. He hopes you enjoy it. You can read this article online at: https://contrarianedge.com/set-your-egg-timer-to-6-months/
Russia & Saudi Play a Dangerous Game of Chicken - What Would Ben Graham Do in Today's Market? - Ep 56
As Vitaliy was writing a recent article, he got an email from a client saying, “Your move, boss.” This prompted him to expand on what exactly his "move" would be, given the recent stock market turmoil. In short, it is just another day at IMA. After touching on some slightly positive virus news and the oil price war, Vitaliy shares a quote from two investment heros about navigating market volatility as a long-term value investor. You can read these articles online at: https://contrarianedge.com/russia-saudi-play-a-dangerous-game-of-chicken/ https://contrarianedge.com/what-would-ben-graham-do-in-todays-market/
Vitaliy is back from his trip to Switzerland and Italy. This trip was extra special for him, because he and his brother Alex were joined by his son Jonah. Every day on the trip Vitaliy wrote in his journal, but was always constrained on time. After returning to Denver, Vitaliy took advantage of his jet lag to expand on his journal entries, and wrote a series of random, but thoughtful, podcasts to be shared with you. These short essays are called “The Jet Lag Series," and this is Part 1. You can read this article online at: https://contrarianedge.com/the-jet-lag-series-inhaling-europe/
Vitaliy wrote the following letter to IMA clients about coronavirus. Since news broke a few weeks ago, he's received many emails from readers asking for his thoughts on the virus. Rather than write another article on it, Vitaliy has decided to share the full letter to clients here in this podcast. You can read this article online at: https://contrarianedge.com/the-impact-of-coronavirus-people-economy-your-portfolio/
Vitaliy has a confession to make. Someday, he wants his company to be called Katsenelson & Kids. That doesn't have to be the official name, but he does want to work with his kids, whom he wants to become value investors. He knows he is supposed to want them to become doctors or physicists, but he doesn't. Maybe if you "go Freud" on Vitaliy, you'll tell him this is his way of not wanting to let them go. You can read this article online at: https://contrarianedge.com/me-my-boy-and-warren-buffett/
Vitaliy was supposed to give a presentation at a conference in Omaha, a day before the Berkshire Hathaway annual meeting. He was more nervous than usual. There were maybe two hundred attendees in the venue. A few minutes into his presentation, the lights went out. In this podcast, Vitaliy shares how this moment shaped his view of public speaking, preparation, and creativity. You can read this article online at: https://contrarianedge.com/little-moments-give-great-speech/
When should you not buy commodity stocks? When you feel like you must own them. Vitaliy remembers when investors felt they must own oil stocks, when oil prices shot past $100 per barrel and everyone was convinced they were going to $200. Today oil stocks are universally hated, and arguably for the right reasons – the future is knocking on our door, and it has electric vehicles in it. Nevertheless, Vitaliy lays out a case for while there may be value in the oil patch today, and expands on how Equinor might be able to capture that value. You can read this article online at: https://contrarianedge.com/equinor-a-good-crisis-is-never-wasted/
We think of Vincent Bollore as the John Malone of Europe – his strength is in identifying undervalued assets, taking control of them, and unlocking value. Bollore owns 25% of Vivendi, the prime asset of which is Universal Music Group (UMG), the largest music label in the world. Vivendi owns around 30% of the music created in the Western hemisphere. It is the home of Lady Gaga, Mariah Carey, Queen, Prince, and many other artists. In this podcast, Vitaliy explains the appeal of investing in (with) Vincent Bollore's holding company of the same name. You can read this article online at: https://contrarianedge.com/bollore-streaming-music-cash-flows/
In a change of pace, this podcast will not discuss this stock market or the economy. Instead, Vitaliy writes about some very random, but still relevant topics - from his upcoming trip to Europe, to his new philosophy about helping his kids grow to be well-rounded adults, to when he decides to break with his diet (hint: it's 8% of the time!). Vitaliy hopes you enjoy it. You can read this article online at: https://contrarianedge.com/the-8/
Party like it’s 1999: this is how the stock market feels to Vitaliy today. No, there are no dot-coms, though temporarily we had dot-cannabis and dot-fake-beef bubbles which got popped. Growth stocks are incredibly expensive. Value stocks have underperformed for the last ten years. The last time this underperformance was this extreme was 1999. In this podcast, Vitaliy walks you through how he sees the market today, and how IMA is building an All-Terrain portfolio to weather whatever the market might throw at it. You can read this article online at: https://contrarianedge.com/2020-party-like-its-1999/
The Roman philosopher Seneca wasn’t talking about the stock market when he wrote that “Time discovers truth,” but he could have been. In the long run a stock price will reflect a company’s (true) intrinsic value. In the short run the pricing is basically random. In this podcast, Vitaliy looks at two historical examples of how the market got stock market valuations wrong in the short term, but right in the long term. You can read this article online at: https://contrarianedge.com/the-market-right-now-doesnt-care-how-fantastic-your-stocks-are/
When Vitaliy got into his mid-forties, he landed in his own version of a mid-life crisis. Instead of getting a 20-year-old girlfriend or a red convertible, he started paying attention to his health. He was surprised to discover it was somewhat less-than-perfect. Vitaliy shares how he addressed this issue, including by tapping into the power of his unconscious mind. The unconscious mind plays a big role in investing, too, and Vitaliy shares how it can contribute to great outcomes in life, investing, and skipping dessert. You can read this article online at: https://contrarianedge.com/i-dont-eat-desserts/
Socially responsible investing. Awesome! What’s not to love – your capital doesn’t just enrich your life, it also flows only to companies that do social good. The best features of capitalism and socialism wrapped into one nice tidy package. This sounds great, just as socialism was music to Russian ears a hundred years ago. Vitaliy explores the complexities of implementing a socially responsible strategy, and shares how he tackles this subject at his investing firm, IMA. You can read this article online at: https://contrarianedge.com/socially-irresponsible-investing/
While Vitaliy loves to travel, he hates traveling alone. During a recent trip to San Francisco, Vitaliy and his daughter Hannah took in the sites and sounds of that great city. Hannah and Vitaliy got some amazing memories from this short trip, and Hannah learned an important lesson about personal finance and charity. You can read this article online at: https://contrarianedge.com/i-left-my-heart/