Jason Karp – Opportunities in Public and Private Markets - [Invest Like the Best, EP.86]

I believe that any investment strategy that will deliver strong returns in the future must evolve. Any strategy should rest on rock solid foundational principles, which change rarely if ever—things like price discipline, or business growth. But the features of the strategy must keep getting better, because the marketplace is incredibly competitive. That evolution is the topic of today’s conversation with Jason Karp. Jason is the founder and CIO of Tourbillon Capital Partners, a multi-billion dollar asset manager based in New York City. We cover a ton of interesting ground. We start with what has happened in public and private markets, discussing the role of quants, passive indexes, and value vs. deep value investing. We compare the relative merits of investing in private equities, and where and how opportunities arise. We then focus in on two interesting private investing trends: the health and wellness sector and the cannabis industry. First, we discuss Hu kitchen and Hu Products, the food business that Jason started with his family several years ago in response to personal health challenges. Second, we discuss his evolved views on Cannabis as an investment space and why it may also represent a massive growth opportunity. You all know I value transparency, so it is important to note that since I recorded the conversation, my family became an investor in Hu Products. It has been a fascinating means to learn about the food, health, and wellness industry which has grown rapidly in recent years. We were customers of Hu in New York City long before I even knew Jason, which made that part of the conversation especially interesting for me. This episode re-enforced my believe in pushing one’s investing strategy to adapt to change market conditions and competitive pressures. If we have any hope of beating Vanguard, we can’t ever rest on our laurels. This was an especially eclectic and fun conversation, I hope you enjoy my chat with Jason Karp. For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag Show Notes 3:06 – (First question) – Jason’s view on private markets vs public markets and how his view has evolved 6:02 – Phase of the private markets where companies can achieve huge size and scale without going public 10:31 – Framework of Jason’s value-based investing strategy 13:47 – Reverse discounted cash flow 16:27 – Are there areas of the market that are easier to predict using Jason’s models 20:29 – Tech dominance the longer they are around 21:01 – Jerry Neumann Podcast Episode 22:08 – How markets have changed over Jason’s career 25:58 – Types of edge that you can have in the market 30:00 – Broad examples of sectors that are high-quality, but momentum is hurting them 31:32 – Backstory of Hu Kitchen 38:33 – Investment research into health and wellness 42:56 – State of acquisitions, particularly in consumer product goods 47:13 – Jason’s research into Cannabis 50:43 – The misperceptions of Cannabis 56:30 – Why cannabis is a more important sector to consider than crypto 57:51 – What are the most important levers to growing a business 1:02:24 – Biggest lessons learned in hiring good people 1:06:10 – Investing lessons 1:09:27 – Kindest thing anyone has done for Jason Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag