Matthew Sweeney: Frameworks, Patience, and Edge

Hey guys! After what felt like three years in the making, this week’s guest is Matthew Sweeney, the founder and portfolio manager of Laughing Water Capital. Long story short, Matt was actually the first fund manager that I’ve ever cold email when I was getting into the game and he was kind enough to email me back right away.  Since then we’ve been able to stay in touch and talk about investment ideas. In this conversation, we dove into Matt’s 4 part decision making framework on evaluating investment theses:  Is it a good business?  Who are we partnering with?  What happens when something goes wrong?  Why it might be cheap?  We also discussed his journey as a portfolio manager, delay gratification vs opportunity cost, what is edge, originality, and thinking on what would the drunks in the bar say? [0:30] Introduction   [4:00] Matt’s Framework for Finding Ideas [24:00] Good Co, Bad Co [29:00] Matthew’s Journey as a Portfolio Manager. [45:00] Patience: Nature vs Nurture  [53:00] Delay Gratification vs Opportunity Cost [1:01:00] Models and Valuations  [1:13:00] What is Edge?  [1:17:00] What Would the Drunks in the Bar Say? [1:19:00] The Future of Laughing Water Capital.  [1:25:00] Originality  [1:33:00] Always Looking to Improve  [1:37:00] More from Matthew Sweeney and Closing Questions Also, a big thanks to the following sponsors for making the podcast a reality! Quartr Quartr is revolutionizing the way investors interact with IR departments, listen to conference calls, and engage in investment research. The best way to think of Quartr is like Spotify for investor conference calls. Quartr is 100% free and includes markets from 12+ countries (with plans to expand in the future!). Investors can easily request new companies, and Quartr is quick to add them. You can learn more about Quartr by visiting their site, Quartr.se If you're interested in changing the way you research companies, download the app today and give it a try on Apple and Android. Tegus Tegus has the world’s largest collection of instantly available interviews on all the public and private companies you care about. Tegus actually makes primary research fun and effortless, too. Instead of weeks and months, you can learn a new industry or company in hours, and all from those that know it best. I spend nearly all my time reading Tegus calls on existing holdings and new ideas. And I know you will too. So if you’re interested, head on over to tegus.co/valuehive for a free trial to see for yourself. Mitimco This episode is brought to you by MIT Investment Management Company -- also known as MITIMCo, the investment office of MIT. Each year, MITIMCo invests with a handful of new emerging managers who it believes can earn exceptional long-term returns in support of MIT's mission. In order to help the emerging manager community more broadly, they created emergingmanagers.org, a website for emerging manager stockpickers. For those looking to start a stock-picking fund, or those just looking to learn about how others have done it, I highly recommend the site. You'll find essays and interviews by successful emerging managers, service providers used by MIT's own managers, essays MITIMCo has written for emerging managers and more. TIKR