Chuck Akre - The Three Legged Stool - [Invest Like the Best, REPLAY]

Invest Like the Best with Patrick O'Shaughnessy

Today, we're running a replay of my 2019 conversation with legendary investor Chuck Akre. Chuck founded Akre Capital Management in 1989, which now manages approximately $14B dollars. We discuss his investing style and his “three-legged stool” for evaluating companies. Please enjoy this great conversation.

Listen to Founders Podcast

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

[00:00:00] Welcome to Invest Like the Best

[00:01:06] First Question – Advantage of being in Middleburg, Virginia

[00:02:11] What a day looks like for Chuck

[00:03:06] Why imagination is more important than knowledge

[00:03:38] Difference between curiosity and imagination

[00:04:38] The origins of the Nirvana Three-Legged Stool concept

[00:10:14] First leg of the stool, extraordinary business and ROE’s with a focus on Bandag

[00:14:36] How his evaluations of value have changed over the last 10-15 years

[00:16:10] A look at recent businesses that he’s bought and why they are interesting

[00:19:56] Why they keep things simple

[00:21:35] Second leg of the stool, the people involved and characteristics of managers he has invested in

[00:23:20] Role of capital allocation in the people he focuses on

[00:29:34] Third leg of the stool, reinvestment

[00:21:09] How does he think about diversifying across an investment area

[00:33:32] Great businesses wrapped in a bad balance sheet

[00:37:35] What would cause him to sell

[00:38:52] What does he look for in people

[00:43:27] How curiosity has impacted his interest in land conservation

[00:43:51] Advice for investors, especially younger ones

[00:46:14] Kindest thing anyone has done for him