RTN Investments Blog

Thoughts on Investing, Economics, Current Events, and Anything Else I Want to Ramble About

Latticework 2019


It was a pleasure to attend Latticework 2019 last week on September 12, 2019 hosted by MOI Global at the Yale Club in New York City.  Meeting and listening to so many great investment minds was an amazing learning experience.


I’ve come to realize there’s not just one, but many way to get successful investment results.  Each person has their own circle of competence and expertise.  Some people I met only invested in bank and insurance companies.  Another gentleman was an expert in energy stocks.  Several people only invested in tech stocks because that’s what they understood.  As value investors, generally we’re all looking for the same thing however, and that’s to find stocks that are priced below their intrinsic values.

One of the speakers, David Barr, of Penderfund Capital Management was an expert in small-cap investing and companies that had catalysts on the horizon.  Another speaker, David Marcus, of Evermore Global Advisors looked to partner with large companies that were managed by owner-operators.  Sean Stannard-Stockton, of Ensemble Capital Management talked about how companies these days, especially tech companies, are being run with almost zero capital, all due to technology.  If a company can grow earnings with the same or decreasing amounts of capital, the return on invested capital is astronomical.  He gave examples of Netflix and Facebook and others, and talked about how Warren Buffett loves FAANG stocks, even though he may have missed out on a lot of their gains over the years.  All in all, I guess there’s many roads that lead to investment success.

Another interesting speaker was Rupal Bhansali of Ariel Investments.  She talked about how as investors, not only do we have to be right about a stock, we also have to be against the consensus in order to make money.  For example, say we forecast earnings per share of $5 and the Wall Street consensus is also $5.  If earnings are actually $5, then sure we’re right, but we didn’t make any money because that’s what the world was expecting.  The only way to make money is to see something everyone else doesn’t, to be against the consensus, and to be correct.  Now, if we’re against the consensus and we’re wrong, then we actually lose money.

So we have three possible scenarios:

1.  We can be correct in our forecast and with the consensus and make no money.  (Sad)

2.  We can be incorrect in our forecast and against the consensus and lose money.  (Sad)

3.  We can be correct in our forecast and be against the consensus.  (Happy)

In only 1 out of these 3 scenarios are we happy and make money.  That’s why it’s so hard to be a successful investor!

We were all given a copy of Rupal’s book, Non-Consensus Investing, which I’m just starting to read.

Another speaker, Arnold Van Den Berg, with whom I’m pictured above, was quite an inspiration to listen to.  He’s CEO of Century Management and has been successfully managing money for about 50 years.  That’s not even the most amazing part of his story.  His mother and father survived Auschwitz during World War II and he was smuggled across German lines to safety, where he eventually reunited with them and came to America.  His upbringing is one of inspiration.  Another idea he discussed was the concept of neuroplasticity and how our brains can be rewired and connections can be formed to help us achieve great out-performance in many areas of our lives, from business to relationships.  I enjoyed the interview with him so much that I’d like to share the link to the podcast here below.


All in all, a great time was had meeting and listening to fellow value investors!

Robert Nowak is the founder of RTN Investments, LLC.  RTN is a registered investment advisory managing separate accounts for clients and is modeled after Warren Buffett’s original partnerships.  RTN’s goals are the preservation of client’s capital and to outperform the S&P 500 on a rolling 5 year basis by investing in undervalued stocks of high quality companies.