My investment strategy is centred on three industries: industrials, consumer and financials.
So far, of the three, I’ve mainly focused on Industrials. We have explored deep dives on two Mexican airports (OMA and ASUR), International Container Terminal (an emerging market port operator), Metlen (a Greek industrial conglomerate), Latour (a Swedish industrial conglomerate) and TSMC (yes, I consider chip manufacturing as industrials too).
In consumer, we discussed the current state of luxury goods, and last month, I explored grocery retail and Grupo Mateus, a Brazilian grocery chain.
The final industry I haven’t yet reviewed is financials.
Admittedly, I had looked into a few companies in the past, but failed to pull the investment trigger on them. These included American Express, Interactive Brokers, Brown & Brown (a U.S. Insurance broker), Capitec Bank (a South African Bank), Optima Bank (a Greek Bank), Wise, Adyen and Mastercard.
*NuBank in Brazil was supposed to be my first write-up, but I switched it for Alphabet at the last minute.*
Some friends and mentors had also recommended other UK and European banks. Yours truly failed to research and study any of them.
(Please, don’t open the 5-year share price chart of NatWest Group near me!)
Lately, though, there’s been some drawdowns in what I believe to be financials sub-industries that meet what I look for: high quality, high barriers to entry, durable and predictable (well, not exactly true) in the non-banking financials segments.
These include areas like insurance & insurance brokers, private equity, payments, financial data research and stock exchanges.
While I’d love to, it would be impossible to cover all, and for the next 3 months, I’ll be deep diving into the following companies:
The US Government-Sponsored Enterprises (the 4 Mac and Mae siblings – Fannie, Freddie, Farmer and Sallie… and their distant cousin, Penny).
Visa (an investment case and comparison with Mastercard and American Express).
FactSet and Morningstar (their investment cases and understanding how AI disrupts or enables their business models).
Fairfax Financial *subject to change, dependent on the broader investment opportunity set among insurers and quasi-insurance-investment companies.
At the moment, I don’t have an investment position in any of these companies. The primary purpose of the deep dive is to explore their investment cases and determine if they meet our 15% IRR hurdle, and then consider an investment position.
You can expect me to keep you updated on them and my broader findings on financials in the subscriber chat.
If you have any questions on these companies you’d also want answered during the deep dive, please feel free to share them in the comment section below.