#4 - Practice 3: Find Inflections in Cyclical Businesses Undergoing Secular Change Like Kuppy

“But I'm buying stuff where, revenue’s growing rapidly. I'm buying stuff where value creation is happening rapidly. I'm buying, you know, growth momentum names. I’m buying them before anyone else realizes that they’re growth momentum names...they're still valued like uh, value stocks. If you look at this sort of stuff we're doing, we call it--, I call it inflection investing for lack of a better word, but they tend to be industries that have destroyed a lot of capital that have bored people to death, that give people PTSD.” -Kuppy, Praetorian Capital

Kuppy has been a great friend to Chase since he started PMR. This week they discuss position sizing, what inflection investing really means, how to spot the convergence of cyclical and secular tailwinds, and most importantly, how getting away from the markets allows you to express your trades more effectively. Kuppy's approach to investing is bold, well researched, and decisive. We also discussed how he decided to stop missing stuff with the inception of Kuppy’s Event Driven Monitor (KEDM).

Timestamps:

(00:00) - Intro

(01:46) – Kuppy is a value investor that makes money

(02:58) – Charity of Choice: Sugar Pine Foundation

(04:09) – Roman History isn’t a real major

(06:03) – Inflection investing is momentum investing with a value overlay

(09:28) – Middleman companies provide the best value?

(09:46) – Cyclical sectors with secular change

(12:02) – Find ways to be out of the office

(12:46) – Kuppy makes the chart

(12:55) – Fundamental Momentum

(13:42) – Exit criteria: When something better comes along

(15:40) – Sizing of trades: There’s not enough good ideas to trade small positions

(19:54) – Get away from granularity unless it’s earnings season

(24:42) – Massive events still take weeks to figure out

(26:25) – Surfing – no phones allowed

(28:20) – Good food and good weather for good living

(29:13) – Being wrong isn’t personal. Get out before you change your mind

(31:39) – Between Two Pines

(35:21) – Sidestep the politics and sales pitches of corporate management leadership

(40:45) – KEDM – Kuppy got tired of missing stuff

(46:16) – Tomorrow’s Gold by Marc Faber & Reminiscences of a Stock Operator by Edwin Lefèvre and Roger Lowenstein

(47:00) – Sleepwalking into YCC

(48:04) – Kuppy reaches out the finance circle for “smell tests”

(49:23) – Luck in trades because of long timeline horizons

(51:46) – Plugs

This Episode's Charity:

The Sugar Pine Foundation began in 2004.They are dedicated to restoring sugar pines in the Lake Tahoe National Forest in California.

Donate here: https://sugarpinefoundation.org/get-involved/donate

Referenced in the Show:

Kuppy’s Book Recommendations: Tomorrow’s Gold by Marc Faber &

Reminiscences of a Stock Operator by Edwin Lefèvre and Roger Lowenstein

Guest Plugs:

Kuppy’s X : https://twitter.com/hkuppy

Praetorian Capital : https://pracap.com/

Kuppy’s Event Driven Monitor (KEDM) : https://kedm.com/

Pinecone Macro Research aims to provide unique, well researched analysis of the global markets using a macro framework. Find us here: www.pineconemacro.com

Subscribe on Substack: https://substack.com/@pineconemacroresearch

Bulwark Capital Management: https://bulwarkcapitalmgmt.com/

Disclaimer:

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor

Episode 4

3rd May 2024

#4 - Practice 3: Find Inflections in Cyclical Businesses Undergoing Secular Change Like Kuppy

Listen for free

About the Podcast