Scalability: A Predictive Attribute for Outperformance

[giofranchi]

Horizon Kinetics on Oaktree Capital & Others.

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence. One’s knowledge and experience is definitely limited and there are seldom more than two or three enterprises at any given time which I personally feel myself entitled to put full confidence.” - John Maynard Keynes

Scalablility_Mar2013.pdf

[Guest hellsten]

Thank you. Very educational as usual.

 

I added APO to my watchlist:

In addition to the scalability of their business models, the companies discussed above are all owner-operators. Senior management at the companies includes renowned investors such as Henry Kravis (KKR), Leon Black (Apollo), and Howard Marks (Oaktree). These are individuals with records of success and deep networks that lend them an information advantage and often times favorable terms-of-trades: they are considered desirable partners, and therefore are likely to be approached first with investment opportunities.

 

 

[Guest hellsten]

Has anyone here looked at APO in detail? APO seems cheap when comparing economic net income to OAK and KKR. Blackstone and Oaktree seem the most expensive…