by Patrick O’Shaughnessy
My guest this week is remarkable. He now applies his talents on Wall Street, searching for smaller cap companies trading at huge discounts in an effort to compound wealth for his investors. He is classically trained, having earned his graduate degree from Colombia, a school known for producing value investors. But his method also reflects what he learned across more than a decade of active duty in the U.S. military.
Mike Zapata served us all as a Navy SEAL in the aftermath of 9/11 and ultimately as a member of the SEAL’s “Development Group,” commonly known as SEAL team 6. I think everyone listening strives for excellence in what they do. This week we get to hear from someone who has pursued excellence on our behalf.
I’ll let him explain the meaning of his firm’s name, Sententia, but for now suffice to say we are lucky to have quiet professionals like Mike. If you are interested in supporting the families of soldiers who fought with Mike and lost their lives, I encourage you to check out the Tip of the Spear foundation and make a donation along with me, small or large.
Please enjoy my conversation with Mike Zapata.
2:23 – (First Question) – A quick overview of Mike’s career leading up to his time at Columbia
3:43 – What led him down the path of value investing at Columbia
5:57 – The focus and goal of the firm
7:12 – Where the name of the firm, Sententia comes from
8:04 – His experience in the Basic Underwater Demolition/SEAL (BUD/S) program and lessons learned from it
13:14 – How much grit is innate vs can be learned
14:59 – What the actual job was in BUD/S
17:33 – Difference between the broader SEAL community and being part of the more exclusive development group
19:03 – The team dynamic within the SEALS
21:18 – The sacrifice that SEALs make with the story of Adam Brown as an example
24:35 – Waiting for darkness before deployment
27:23 – How do you know when to violate your best practices for a risk
29:26 – A look at three pictures in his office and why they are meaningful
31:36 – Lessons that would be useful to other people
33:17 – How is Mike’s skillset applied to the investing world
39:24 – Factors that would be seen as good alignment in businesses
40:18 – How the view the profiles of other investors in these small businesses
41:46 – Examples of “smoke and fire”, markers of an attractive investment
43:42 – Other investors that he has learned the most from and what those lessons were
44:54 – Importance of balance sheets in value investing
47:33 – Is value investment oversaturated
50:28 – Market blind spots that are attractive to Mike
52:03 – What point in Mike’s career has he felt the most alive
53:14 – Any other lessons Mike would want to share
55:12 – Kindest thing anyone has done for Mike