Rick Van Nostostrand – Consistently Hunting For Real Value

Hosted by
Bill Brewster

Bill Brewster is a private investor. He cohosts the podcast Value: After Hours with Tobias Carlisle and Jake Taylor. Tobias, Jake and Bill met at a Berkshire Hathaway meeting and formed a lasting friendship. And, as it turns out, people really like the podcast.

While Bill tries to replicate Warren Buffett and Charlie Munger’s thought processes, he is heavily influenced by Bill Miller III, Stan Druckenmiller, and others. This podcast is his attempt to dig deeper into other investing/business philosophies and share the knowledge with the world.

Rick Van Nostostrand is a Partner and Senior Portfolio Manager at Cornerstone Investment Partners. Cornerstone is an investment boutique in Atlanta, Georgia. The firm manages “mid $2Bn” across a number of value strategies. They have a qualitative approach with a quantitative model that guides them. See here.

Prior to Conerstone, Rick was a voting member of the investment committee at EARNEST Partners and served on the Fundamental Value product at Invesco Capital Management. Previously, he worked in management consulting where he served clients across industries at both McKinsey & Company and Accenture (the Anderson Consulting). Rick earned an MBA with a concentration in Finance from Wharton (U Penn), and holds a Bachelor of Science in Computer Science Engineering from Southern Methodist University.

This conversation covers:

  • ~2:30 – Rick’s Background
  • ~3:53 – His consulting career at Accenture and McKinsey
  • ~7:11 – College businesses, one of which could have been quite successful if Amazon existed
  • ~13:57 – The theory that in the real world prices and value are seldom aligned ~ 16:23 – Need to develop an investment process and Cornerstone’s philosophy
  • ~ 22:21 – What Cornerstone’s model told them about Microsoft that the market missed
  • ~ 24:08 – Looking for high quality companies building value over time
  • ~ 26:21 – ESG discussion
  • ~29:36 – Risk subsidies driving valuation
  • ~32:31 – Indexes and how they impact investment results and the market ~37:00 – What happened to certain stocks after the 1999 bubble burst
  • ~38:00 – Investing in the late 90s
  • ~43:00 – Buying the dip may not work forever
  • ~45:00 – Avoiding financials in 2009
  • ~50:50 – Real option theory in valuation
  • ~54:05 – Where Wells Fargo erred in remediation
  • ~ 57:19 – Why Citigroup was a palatable turnaround investment
  • ~1:01:00 – The benefit of investing with a team
  • ~ 1:05:00 – Avoiding groupthink as a team
  • ~1:07:00 – How to have investment teams function well
  • ~1:14:00 – Building teams to last and culture
  • ~1:19:00 – Miscellaneous discussion

Disclaimer: Bill manages a portfolio under the name of Sullimar Capital Group. This podcast is for informational and educational purposes only. Nothing in this podcast or on SullimarCapital.Group is investment advice. All information in this is opinion based, potentially biased, and requires verification.

Bill and his guests make no representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness or reasonableness of the information contained in these podcasts. Any assumptions, opinions and estimates expressed constitute the participant’s judgment as of the date thereof and are subject to change without notice. Any projections contained in the information are based on a number of assumptions as to market conditions and there can be no guarantee that any projected outcomes will be achieved. This podcast does not accept any liability for any direct, consequential or other loss arising from reliance on the contents of this presentation.

This podcast series DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICIATION OF AN OFFER TO BUY ANY SECURITIES MENTIONED OR DISCUSSED. Seek the your financial, tax, legal, accounting, or other advisor’s advice before making any investment decisions. We are not your fiduciary or advisor.

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Episode 36