by Patrick O’Shaughnessy
My guest today is Chuck Akre, a now widely famous investor
who founded Akre Capital Management in 1989, which now manages approximately
$10B dollars. We discuss his investing style and his “three-legged stool” for
evaluating companies. Please enjoy this great conversation.
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1:06 – (First Question) – Advantage of being in Middleburg,
2:11 – What a day looks like for Chuck
3:06 – Why imagination is more important than knowledge
3:38 – Difference between curiosity and imagination
4:38 – The origins of the Nirvana Three-Legged
10:14 – First leg of the stool, Extraordinary business and
ROE’s with a focus on Bandag.
14:36 – How his evaluations of value has changed over the
last 10-15 years
16:10 – A look at recent businesses that he’s bought and why
they are interesting
19:56 – Why they keep things simple
21:35 – Second leg of the stool, the people involved and
characteristics of managers he has invested in
23:20 – Role of capital allocation in the people he focuses
28:03 – Favorite biographies
29:34 – Third leg of the stool, reinvestment
21:09 – How does he think about diversifying across an
33:32 – Great businesses wrapped in a bad balance sheet
37:35 – What would cause him to sell
38:52 – What does he look for in people
43:27 – How curiosity has impacted his interest in land
43:51 – Advice for investors, especially younger ones
46:14 – Kindest thing anyone has done for him