Riley’s Newsletter 007

Friends,

Happy New Year! 2020 was crazy. A lot of ups and a few big downs. I feel lucky that covid did not touch any of my loved ones (or myself), and, overall, I’m happy. I managed to make a few new friends, get a new job and find a girl I like. My sister got engaged (finally!) and bought a puppy. A few of my cousins gave birth to a few babies. It’s remarkable. Life… finds a way.

I started writing online this past year. I’m just getting started and it’s been a blast. Thank you, dear readers. I’m working on growing my engaged subscribers so I can make more friends and (hopefully) chat about interesting stuff. Thank you Chip for encouraging me to write, and for our correspondence. It really means a lot. I hope I can make more friends like you.

I don’t believe in New Year resolutions. I’ve tried them in the past, and have seen others do the same, and they just don’t work. Process, not goals. Focus on that and you may get the results you desire. Speaking of focus, that’s something I’m also working on.

Anyway, let’s get to investment…

Investment

I’m tweaking my investment process… how I find ideas, how to value a business, how think about stock prices, how to place a bet in the right context, etc. I discovered someone who has a $4mm+ TFSA (like a Roth IRA) and it blew my mind. More to come. One big thing I’m going to work hard on implementing is something my friend Sean taught me… study Intelligent Fanatics and Intelligent Fanatic-lead businesses… invest in them… and, importantly, don’t let go. I sold XPEL for a small gain and cringe whenever I think about it. I need to focus on the business more. Not the stock.

New Research:
Colony Capital, a digital asset manager.

Update:
Salona Global, the net-net formerly known as Brattle.

Other

Twitter is awesome. Two new follows are Max Olson and Slingshot Capital. I particularly liked Max’s thread about using tech stack trees as a guide to analyze business. These types of images are far more powerful than some paragraph-length (and boring) business description in an annual report. Thanks, Max. I’m stealing your idea. Check out his substack. Also, I am extremely impressed by Slingshot’s returns. Importantly, he seems genuinely kind. What’s awesome is that he hasn’t let amazing success go to his head!

I subscribed (with a Black Friday discount!) to Rich Howe’s Spinoff Investing Service. Rich is a great guy, an experienced analyst and an entreprenuer. He quit his job and is focused full-time on this service, which I really respect. His pitch of hiring him as a spin-off analyst for less than $500/year is a no-brainer. All the best, Rich.

Books

Idea: Use Max’s tech stack trees for books. One image as a map. The image is far easier to remember than some book review. Looks like I need to get better at drawing.

You Can Be A Stock Market Genius by Joel Greenblatt – coming soon.

Value Investing by Bruce Greenwald et al – coming soon.

Essays

Coming soon.

Comments and questions to rn@rileynewport.com please. All faults are mine and mine alone (and maybe my ancestors, too).

Enjoy!

Sincerely,
Riley