Compound Kings: Lessons Learned as an Investor and Emerging Manager | Robert Cantwell, Portfolio Manager
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In Episode #129, Robert Cantwell, Founder & Portfolio Manager of Compound Kings joins us as part of our Outlier Investors series. We discuss the biggest lessons that Robert has learned as an investor and portfolio manager, the top positions in the fund today, and the future of active management.
“The investment management business actually looks a lot more like every other business, where there's products, there's marketing, and there's distribution, and you have to be outstanding at all three of those things in order to succeed in this business.” – Robert Cantwell
EPISODE GUIDE (LINKS, QUOTES, NOTES, AND BOOKS MENTIONED)
FULL TEXT TRANSCRIPT
This episode is our definitive guide to building an ETF business. In it we cover:
- (00:02:23) – Introduction
- (00:04:53) – Defining a compounder (growth, profitability, high ROIC)
- (00:06:22) – Investing in challenging markets
- (00:14:26) – Robert’s thoughts on the rise of active management
- (00:17:28) – Why so much money is still in mutual funds
- (00:19:33) – Thematic ETFs and where they can go wrong
- (00:39:05) – Why investing in public markets is so challenging
- (00:46:09) – Top three positions in Compound Kings today: Meta, ServiceNow, and Adyen
- (01:05:35) – What it’s like to build an ETF business
ABOUT COMPOUND KINGS
Robert Cantwell is the Founder of Upholdings and Portfolio Manager of Compound Kings, which is an exchange-traded fund focused on investing in companies often called compounders. Compounders are typically profitable, growing, and generate very high returns on invest capital (ROIC).
This is an incredible interview with a true pioneer in the actively managed ETF space. In it, we look back at the top three positions in Compound Kings when Robert and I sat down in early 2021, which feels like a world away, to review the performance of Alibaba, Meta, then Facebook and Berkshire Hathaway.
Robert shares the three biggest learnings from the last 18 months including: why you always have to be learning new industries; why you should add a quant to your investment team; and why knowing the people running public companies matters a lot.
Robert also walks through his team's thesis on the three largest positions in the fund today, which include Meta, ServiceNow and Adyen. This section of the interview is fantastic so skip ahead and don't miss it if you're short on time.
And finally, Robert shares what it's like to build an ETF business scale assets under management and why running an investment business is very similar to an enterprise software business.
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ABOUT OUTLIER ACADEMY
Learn timeless lessons on work and life from iconic founders, world-renown investors, and bestselling authors. Outlier Academy is the forever school for those chasing greatness. Past guests include Gokul Rajaram of DoorDash, Scott Belsky of Benchmark and Adobe, Joey Krug of Pantera Capital, Mark Sisson of Primal Kitchen, Luke Gromen of The Forest for the Trees, and Brian Scudamore of 1-800-GOT-JUNK.
ABOUT DANIEL SCRIVNER
Outlier Academy is hosted by Daniel Scrivner. Over the last 15 years, Daniel has led design teams at Square and Apple, turned around a $3M+ ARR SaaS business, and invested in more than 100 companies. He launched Outlier Academy in 2020 to learn from the world’s best founders, investors, authors, and peak performance experts.
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