Winning the Long Game: Global & Contrarian Value Investing w/ Soo Chuen Tan (TIP647)

Clay is joined by Soo Chuen Tan, the founder and president of Discerene Group, to discuss global and contrarian value investing.

Soo Chuen started his firm in 2010 with less than $100 million in AUM and has grown it to over $2 billion. Utilizing their strict value investing approach, Discerene has had an impressive investment track record since its founding in June 2010.

IN THIS EPISODE YOU’LL LEARN:
00:00:00 - Intro
00:00:32 - Founding Story
00:13:08 - Why Discerene has outperformed
00:18:38 - How to be a better investor
00:26:42 - Logic and Epistemology
00:32:47 - Can great investing be learned?
00:38:36 - Investing Psychology
00:51:29 - Reflexivity
00:57:56 - Value Traps
00:59:50 - Charlie Munger
01:04:04 - Final Handoff

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On We Study Billionaires, we interview and study famous financial billionaires including Warren Buffett, Bill Gates, and Ray Dalio. We teach you what we learn and how you can apply their investment strategies in the stock market.

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[brianbirnbaum]

Easily one of the best episodes you guys have put out. This guy is a monster.

[AS-ygdt]

Great interview and well done Clay for steering the discussion so artfully 👍🏽

[ChrisBrew-su]

Thank you Clay and thank you Soo Chuen, that was another epic episode. I’ve already listened twice and love the generous insights and knowledge shared.
Cheers, Chris

[ABCYT]

Thanks so much for sharing this interview. There is so much content t digest. I will have to listen to it a couple times.

[ABCYT]

This guy is awesome! Reading through 10k from the last 20 years and learning game theory are not for people who wants to make a quick buck.

[gisellmorales]

This is the most complicated approach to investment ever! I heard it all, lots of good info and so many details… this is investment at a level I may potentially not enjoy😅Thank you!

[SgAlvinOng]

Never a good idea for podcast to just reading off script.. rather painful to listen to even though the content is good.

[hoang-AI]

To be very honest, we have seen many many fund managers who are very good at articulating high level ideas. There seems to be a saturation of investment philosophy these days

[brianbirnbaum]

You can’t agree with everything someone says. But one thing I vehemently disagree with is his definition of batting average. Permanent loss of capital should not be the only determining factor of whether you “miss.“ If you lose 20% on the stock and then put it into another stock that goes 10 X, you’ve done far better than going one for two. On the other hand, if you hold a stock for 10 years and it goes up 50%, that is a terrible result.

[brianbirnbaum]

Upon second listen I also believe his views on value are somewhat hypocritical. If perception plays no role in value, then Picassos are worthless. Sorry, but we all know that that’s flat out ridiculous.

Like all things, the truth is somewhere in the middle. We cannot perfectly value anything, period. Cash flows cannot value a business because we do not know what multiple place upon those cash flows.

It’s fascinating how even the smartest people have blind spots. You can kind of tell that he hasn’t understood yet how the market has changed. Companies have not become more expensive only because of a “financial bubble.” we have become much more aware of things like asset light businesses, brand awareness, network effects, and other moats. Just because young analysts are mistakenly ignoring Ben Graham doesn’t mean they’re wrong about the power of intangible assets.

In this way he’s kind of the old man yelling at kids to get off his lawn. More relevant to his own theories, he often suffers from dogma.

For example, take his viewon greatness in sport. He waxes poetic on the virtues of fundamentals. The only problem is that without being in the top 0.01% of raw talent, it does not matter a single bit how hard you work. You will never go pro, let alone be great.

We’re never going back to the old way, and he can ignore these at his own peril. At the same time, things have always been like this. The market has just fluctuated. Things change and don’t change. And what has changed he is in some ways ignoring.

Still, this is a very small blind spot in an overall masterful approach that I’m sure has worked out for him.

[vidya]

Rule 1 and 2 are not strategies, not usable blurt.