Far From The Finishing Post

James Davolos is a portfolio manager at Horizon Kinetics, a US-based asset manager with a distinctive and long-term investment approach.  We discuss James' evolution as an investor, how the investment and inflation backdrop is changing, and the merits of capital-light, real asset businesses.
Show notes:
[01:48] James discusses how he got into investing
[04:18] The formative years
[06:29] The importance of having a good mentor
[08:47] Horizon Kinetics' core principles
[11:24] Going off the beaten path
[14:15] Capital-light, real asset businesses
[21:51] Structurally higher inflation
[26:30] Localised vs broad inflation
[30:11] LandBridge and Miami International 
[36:19] Optionality
[40:00] The best time to be a royalty company is in a bear market
[43:29] Risks to be aware of
[46:26] Focus on what matters

Alastair Unwin is a fund manager on Polar Capital’s Technology team.  We discuss Alastair’s career as a technology investor, AI’s exponential curve of improvement and potential as a general purpose technology, as well as the issues that investors should consider as ever more capital is spent to realise AI’s promise.
Show notes:
[01:33] Alastair discusses how he got into investing
[03:14] Lessons from Herald, Neptune and Polar
[05:05] Heuristics for technology investing
[07:29] AI scaling laws
[10:10] AI bottlenecks
[13:45] Capital formation and AI’s new infrastructure
[17:42] A hardware cycle
[19:37] Motivations for increasing capex
[25:08] Capex in the context of improving models and the global wage bill
[28:49] Increasing circularity of AI financing
[31:14] Is it winner takes all or will models be commoditised?
[33:34] Nvidia and the depreciable life of chips
[37:52] Hyperscalers’ ability to win in the new paradigm
[40:32] Alphabet’s prospects
[44:21] Adoption rates and use cases
[49:03] Sitting with ambiguity and not being dogmatically convicted

Sebastian Lyon and Charlotte Yonge co-manage Personal Assets Trust  and Troy’s Multi-Asset strategy.  We discuss the strategy’s evolution over the last 25 years, Troy’s equity-centric approach to multi-asset investing, and why creating a resilient portfolio is as relevant as ever in today’s world.
Show notes:
[01:34] Founding philosophy
[04:21] Avoiding complexity
[07:25] Reasons for not owning derivatives
[08:45] Charlotte’s career
[10:41] Becoming co-manager
[12:35] How Sebastian and Charlotte complement each other
[16:43] Avoiding wasting assets
[19:19] Finding opportunities with asymmetric risk
[21:44] Hubbell and Verisign
[24:45] Evolution of fixed income investments
[27:08] Shortening of duration
[31:00] Will the US$ remain a safe haven?
[34:55] Attractions of the Japanese Yen
[36:11] Gold as essential portfolio insurance
[38:44] Does the macro impact asset allocation?

Seth Brennan is co-founder of Lincoln Peak Capital, which owns minority stakes in several asset management companies, including Troy. We discuss Lincoln Peak's long-term partnership model and the importance of autonomy and a strong alignment of interests as foundations for success.
Show notes:
[01:15] Seth discusses how he got into the industry
[02:49] Joining Affiliated Managers Group
[03:43] Lessons from AMG
[06:37] Setting up Lincoln Peak
[07:51] Starting a business in 2008
[10:01] The importance of having long-term capital
[14:10] Lincoln Peak’s long-term ambitions
[16:20] Exits
[18:51] The due diligence process and reasons for a transaction
[22:53] Importance of autonomy and alignment
[25:01] Adding value to partner firms
[28:26] Avoiding the temptation to intervene
[31:52] Continuing relevance of active management
[34:44] Catalyst for Troy transaction
[35:35] Why Lincoln Peak is a good partner for Troy
[37:14] Sebastian’s strengths as an investor
[38:35] Be curious and ask questions

Matthew McLennan is co-head of First Eagle’s Global Value team and one of the portfolio managers of Global Value, a strategy that has delivered strong long-term compound returns.  We discuss the importance of humility and patience, why resilience is emphasised throughout the portfolio, and how Global Value has survived and thrived across a broad range of market environments.
 Show notes:
[01:24] How an unusual childhood informed Matt’s approach to investing
[03:52] Succeeding Jean-Marie Eveillard
[05:46] Continuous refinement of the investment kernel
[07:04] Successful succession planning
[09:45] Sustaining success over different market cycles
[12:15] Important character traits and attributes
[17:01] Impact of passive investing
[19:20] The benefits of having a Senior Advisor Board
[22:09] What value investing means to First Eagle
[26:38] Endogenous integrity with the capacity to suffer
[28:40] Discerning between secular change and noise
[33:44] Approach to asset allocation
[35:46] Benefits of owning gold
[37:45] Role of cash in the portfolio
[40:11] High valuations and prospective returns
[42:51] Gold miners vs bullion
[44:41] Understanding the process of growth and the role of endogenous confidence cycles