2024-09-29
1 小时 2 分钟You're listening to Tip Nick and Zach.
Headed the Nomad Investment partnership from 2001 to 2013, where they generated legendary returns.
During this period, they turned $1 of their partner's money into $10.21 before fees, an incredible 20.8% compounded annual gain.
And due to their partnership structure and minimal fees, their partners saw a large portion of these gains go to them rather than to just Nick and Zach.
So today I'm ecstatic to share my learnings from the book Nick and Zach's Adventures in Capitalism by the Rational Cloner.
This book compiled the information from their shareholders letters into thematic chapters.
The author gave very concise but clear summaries of the overarching ideas, then allowed Nick and Zach to expand on each concept in their own words using excerpts from the partnership letters.
Today, I'll cover many of the most insightful concepts from the book.
Nick and Zach have one of the biggest affinities to quality that I've ever seen.
Quality permeates their entire investing philosophy, from finding quality businesses to finding quality business cultures and quality management.
But it goes even deeper.
They eventually sought out to look for businesses of such a quality that attempted to maximize their relationships with their customers through returning excess profits to their loyal users.
This is why they prized the scale economy shared business model.
But when you continue to peel back the layers, quality surrounded more than just purely the investing process.
The way the partnership was carefully crafted was a direct result of their commitment to quality.
The partnership was created to deliver returns to the partners and not as a vehicle to collect fees.
While this may seem trivial to the average person, listeners of this show will realize how rare it is for a financial institution to act this way.
One of the biggest insights I had while researching this episode was in regards to a simple set of words they used to better understand concepts like risk management, certainty, outcome, position, sizing, and conviction.
This was a mental model that they called their cone of uncertainty.
I know you will enjoy learning more about how investors can use this concept to improve their decision making, decrease risk, manage conviction, aid in concentration, and a number of other benefits.