MI REWIND: THE SCIENCE OF HITTING

W/ ALEXANDER MORRIS

06 September 2024

Clay Finck chats with Alexander Morris about the initial things Alex looks at when analyzing a company, why paying up for quality companies is acceptable for long-term investors, how ROIC plays a role in Alex’s investment decisions, why Alex recently added Spotify to his portfolio, how Alex thinks about Spotify’s valuation and their path to profitability, and much more!

Alexander Morris provides high-quality equity research with deep dive company analysis and complete portfolio transparency through his newsletter, The Science of Hitting. Prior to working on his newsletter full-time, Alex was an analyst for an RIA for 10 years.

SUBSCRIBE

IN THIS EPISODE, YOU’LL LEARN:

  • The initial things Alex looks at when analyzing a company.
  • Why paying up for quality companies is acceptable for long-term investors.
  • How ROIC plays a role in Alex’s investment decisions.
  • What the objective of Alex’s portfolio is.
  • Why Alex recently added Spotify to his portfolio.
  • How Alex thinks about Spotify’s valuation and their path to profitability.
  • The mistakes that Alex has learned over the years.
  • And much, much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Alexander Morris (00:03):

I’m very happy with the collection of assets that I own there. So I think on a risk-adjusted base, it’s kind of a balance in my portfolio, and it’s something that I expect to continue to deliver strong results. But as I did hear somewhat recently, as I find new ideas and things that I think are really attractive, it’s a place for me to at least look to source capital.

Clay Finck (00:25):

On today’s episode, I’m joined by Alex Morris. Alex provides high-quality equity research with deep-dive company analysis and complete portfolio transparency through his newsletter The Science of Hitting. Prior to working on his newsletter full-time, Alex was an analyst for a registered investment advisor for 10 years. During the episode, I chat with Alex about the initial things he looks for when analyzing a company, why paying up for a quality company is acceptable for long-term investors. How return on invested capital plays a role in Alex’s investment decisions. Why Alex recently added Spotify to his portfolio. How he thinks about Spotify’s valuation and their path to profitability, and much more. Alex brings a wealth of knowledge and experience when it comes to value investing in today’s market. I hope you enjoy this insightful conversation with Alex Morris.

Intro (01:16):

You are listening to Millennial Investing by The Investor’s Podcast Network where your hosts, Robert Leonard, and Clay Finck interview successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation.

Clay Finck (01:36):

Hey, everyone, welcome to the Millennial Investing Podcast. I’m your host Clay Finck. And today I’m joined by Alex Morris. Alex, welcome to the show.

Alexander Morris (01:45):

Hey, thanks for having me. I’m excited for this.

Clay Finck (01:47):

Well, Alex, I am a huge fan of your work and your writings, and I really admire your strategy of having a highly concentrated portfolio that requires very high levels of conviction. So to get our conversation kicked off, I’d like to ask you to just tell us a little bit about your overall investment approach.

Alexander Morris (02:06):

You know, the cornerstone of my approach is really based on two key conclusions, I’d say, which is one, I’m an active investor, and then two, I’m a business owner, a long-term business owner. So as you work through the implications of those two key beliefs, I think it ultimately leads you to a portfolio that kind of looks comparable to the portfolios of many of the investors that people who listen to this probably know like Buffett, Munger, [inaudible 00:02:30] et cetera. A small number of concentrated positions that you’re really holding for the long-term. And I think that output also has an impact on the inputs that you look for. You know, the attributes like business quality, management quality, strong balance sheet, and thoughtful capital allocation that can enable the company to survive and thrive throughout the business cycle. You know, things like that. That’s a really high-level overview. I’m happy to dive into anything you’d like to talk about further, but those are the main things that I think about as I think about constructing my portfolio.

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

BOOKS AND RESOURCES

NEW TO THE SHOW?

SPONSORS

Support our free podcast by supporting our sponsors:

*Disclosure: The Investor’s Podcast Network is an Amazon Associate. We may earn commission from qualifying purchases made through our affiliate links.

CONNECT WITH CLAY

CONNECT WITH ALEX

PROMOTIONS

Check out our latest offer for all The Investor’s Podcast Network listeners!

MI Promotions

We Study Markets