Spencer Cibelli, Investment Associate at Robotti & Company, stops by to discuss Haypp Group; the world’s largest online retailer of nicotine pouches and traditional snus products. The nicotine pouch category is, as Mugatu would say, "So hot right now." Spencer details Haypp's unique characteristics, benefit to customers, and value offered to suppliers. This business has an interesting niche. And may just be an unlikely "Win-Win-Win" example. Enjoy the episode!

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Takeaways

Haypp is the world's largest online retailer of nicotine pouches.

The company has a unique data insights business that contributes to its revenue.

Consumer behavior in the nicotine pouch market shows a willingness to switch brands.

Regulatory challenges are significant but manageable for Hape.

Pricing strategies allow Haypp to offer lower prices than traditional retailers.

The growth potential in the nicotine pouch market is substantial, especially in the US.

Management's long-term vision is focused on market share growth.

Valuation metrics suggest Haypp is an attractive investment opportunity.

The online penetration of nicotine products is still low, indicating room for growth.

Haypp's relationships with manufacturers are symbiotic and beneficial for both parties.

Jeffrey Collins, Managing Partner of Cloverlay, stops by to discuss how Cloverlay builds private portfolios to offer clients uncorrelated returns. In this conversation, Jeff explains how Cloverlay provides access to private assets that are often overlooked by traditional investors, emphasizing the importance of correlation in portfolio management. The discussion covers various investment opportunities, including sports rights, telecom spectrum auctions, dark fiber, and intellectual property. Jeff shares insights on navigating regulatory changes and lessons learned from past investments, ultimately highlighting the future outlook for investment strategies in a rapidly evolving market.

Takeaways

Cloverlay specializes in esoteric niche private assets.

The firm manages $1.6 billion in assets.

Investments are designed to be uncorrelated and predictable.

Understanding correlations is key to portfolio management.

Investing in sports rights was a unique opportunity in 2020.

Telecom spectrum auctions favor smaller investors.

Dark fiber investments are critical for data centers.

Regulatory changes can create new investment opportunities.

Past investments provide valuable lessons for future strategies.

Cloverlay aims to be a resource for institutional investors.

Jeff's Bio

Jeff serves as Managing Partner of Cloverlay and is a member of the Firm’s Investment Committee and Board of Directors. Prior to founding Cloverlay, Jeff was a Managing Director with Morgan Stanley Alternative Investment Partners (AIP), a division of Morgan Stanley’s institutional asset management business. While at AIP, Jeff was a member of the Executive and Business Committees and served on AIP’s Private Markets Investment Committee as a Portfolio Manager responsible for leading primary fund, co-investment and secondary transactions focused on special situations globally and North American buyouts. Prior to AIP, Jeff advised and traded equity options and futures with U.S. hedge funds in Morgan Stanley’s Equity Derivatives Group in New York. Prior to Morgan Stanley, Jeff was on the investment team at Petra Capital Partners, where he was responsible for screening, researching, structuring and monitoring private equity investments in health care and information services companies. Prior to Petra Capital, Jeff was an investment banker at Robertson Stephens, where he executed a variety of public and private equity, debt and convertible offerings along with mergers and acquisitions in financial services, health care, and business services.

Ryan Dobratz stops by to discuss various aspects of the real estate market, primarily focusing on Freddie Mac and Fannie Mae. The discussion touches on the political implications surrounding Freddie and Fannie, as well as trends in the residential housing market and manufactured housing policies. Weaved into the conversation is interest rates, CPI, and the impact of AI on industrial real estate.

Takeaways

• The real estate market is currently experiencing a divergence in performance across different sectors.
• Interest rates and CPI are critical factors influencing the real estate market.
• AI is expected to drive efficiencies in industrial real estate logistics.
• Freddie and Fannie are facing political and market pressures as they consider exiting conservatorship.
• Preferred shares in Freddie and Fannie present a compelling investment opportunity despite capped returns.
• The residential housing market is showing signs of recovery, particularly in new home construction.
• Manufactured housing is gaining attention due to affordability concerns and potential policy changes.
• The timber market is facing challenges but has potential upside due to supply constraints.
• Investors should be cautious about the political landscape affecting Freddie and Fannie.
• Overall, the real estate sector offers various investment opportunities, but careful selection is necessary.

Stuart Loren, Managing Director at Fort Sheridan Advisors, stops by the show to discuss investing in The Age of Social Disruption (that hyperlinks to his presentation of the idea).

Stuart explores how economic, social, and political disaffection is reshaping investment opportunities and societal dynamics. He highlights the decline in geographic mobility, the housing crisis, and the rise of populism as key factors influencing current political landscapes. The discussion also touches on the impact of AI on economic growth and the challenges faced by local and federal governments in addressing these issues.

Stuart can be found on X and LinkedIn.

Takeaways

We're experiencing a period of social disaffection.

Geographic mobility has significantly decreased over the years.

The housing market is becoming increasingly unaffordable for many.

Political responses are shifting towards populism on both sides.

Economic mobility is declining, leading to frustration among younger generations.

Trust in government institutions is at an all-time low.

Social connections are weakening, leading to increased political polarization.

AI could play a crucial role in future economic productivity.

Local politics are becoming more important in addressing social issues.

Investors need to adapt to a changing political and economic landscape.

James Davolos stops by to discuss the emerging importance of water solutions in oil and gas production.

He shares insights on behavioral investing, the evolution of investment strategies at Horizon Kinetics, and the challenges and innovations in water management within the energy industry. The discussion also touches on market dynamics, competitive landscapes, and the future outlook for investment opportunities in this niche sector.

Takeaways

Water solutions in the oil and gas sector are becoming increasingly important due to rising water cuts in production.

The Permian Basin generates significant amounts of produced water, necessitating effective management solutions.

Market misunderstandings can create opportunities for companies specializing in water management.

The competitive landscape is shifting, with water management companies gaining leverage over traditional oil and gas firms.

Investment opportunities may exist in companies with strong water management capabilities and innovative technologies.

The future of energy will likely require a balance of traditional hydrocarbons and innovative water solutions.

Long-term investment strategies are essential for navigating the complexities of the energy sector.

Wes Gray returns to the show to discuss a potential solution for those with concentrated financial investments. Wes discusses a solution, via a Registered Investment Company, that enables investors to diversify their position while deferring taxes. We hope the episode is informative.

Find Wes at:

Twitter: https://x.com/alphaarchitect

RIA/blog/education: http://alphaarchitect.comETFs: http://funds.alphaarchitect.comWhite label ETF: http://etfarchitect.com

Andrew Freedman, Communications Analyst at Hedgeye Risk Management, stops by to discuss his experience integrating AI in his life. Bill contacted Andrew after Andrew tweeted "So many (very smart) people still can’t grasp the implications of AI…" This episode is premised on that tweet. It's a good one!

Follow Andrew on X at https://x.com/HedgeyeComm or connect with him on LinkedIn at https://www.linkedin.com/in/andrew-freedman-cfa/

Mary Meeker's AI Presentation/Deck - https://www.bondcap.com/report/tai/#view/0

Follow Bill on X at https://x.com/BillBrewsterTBB

The one and only John Huber stops by The Business Brew. John runs Saber Capital Management. Bill found John through Base Hit Investing back in the day. Today you can follow John's writing at Basehitinvesting.substack.com.

Bill admires John's mental flexibility, grit, and consistency. The Business Brew is happy to feature John this week!

🧠 What You’ll Learn in This Episode
📌 Strategic insights into value investing
📌 How to evaluate high-quality growth companies
📌 The risks of overpaying and the dangers of outsourcing your thinking
📌 Thoughts on Berkshire Hathaway’s future
📌 Portfolio management and balancing writing with fund operations
📌 Opportunities beyond the S&P 500

🕰️ Timestamps
00:00 – 👤 John Huber’s Introduction
03:10 – 📉 Berkshire & Market Reflections
06:22 – 💹 Investment Strategies & Market Insights
11:10 – 🚀 Evaluating Growth Engines in Quality Companies
17:02 – 🏢 Tech Giants & Capital Expenditure
26:30 – 🏦 Banking Sector & Investment Risks
34:48 – ⚠️ The Risk of Overpaying for Stocks
36:00 – 🔄 Adapting Investment Strategies
37:57 – 🧩 The Danger of Outsourcing Thinking
40:51 – 🌍 Opportunities Outside the S&P 500
47:24 – ✍️ Balancing Writing & Fund Management
01:00:22 – 🔮 The Future of Berkshire Hathaway
01:07:25 – 👋 Concluding Thoughts & Farewells