The Intellectual Investor

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.

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.

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.

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.

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.

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. 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.

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 which, through UMG, 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.

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.

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. Value stocks have underperformed growth stocks 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.

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.

When Vitaliy got into his mid-forties, he landed in his own version of a mid-life crisis. Instead of getting a red convertible, he started paying attention to his health, which he discovered 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.

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.

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.

Vitaliy has been asked a lot about Bitcoin lately. But he hasn't said much about it publicly, because he finds himself in an uncomfortable position: agreeing with most mainstream financial media. For Vitaliy, the truth is simple and clear: Bitcoin is a bubble.

Part 2. Vitaliy and Tony Greer of TG Macro continue their conversation for Real Vision. In this episode, Vitaliy discusses the investment puzzle presented by Tesla, whether or not he owns the stock, the automotive industry, America's bright future, and more.