TIP781: My Portfolio & Current Market Conditions w/ Clay Finck & Stig Brodersen
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this reflective episode, Stig Brodersen sits down with Clay Finck to examine Clay's portfolio evolution and investment philosophy in 2025. Clay shares his recent additions of Meta, Interactive Brokers, and Booking Holdings, explaining how his thinking has matured from avoiding large-cap US companies to embracing quality businesses led by exceptional operators. (01:48) The conversation explores Clay's "sidecar investing" approach, where he partners with generational CEOs for long-term wealth building. (03:24)
- Main themes include portfolio diversification across geographies, the tension between market narratives and intrinsic value, and how value investing principles extend beyond stocks to career decisions and personal happiness.
Speakers
Stig Brodersen
Host of The Investors Podcast and co-host of We Study Billionaires since 2014. He has guided the show through more than 180 million downloads, focusing on studying the financial markets and books that influence self-made billionaires. Brodersen is known for his emphasis on anti-fragile portfolio construction and long-term value investing principles.
Clay Finck
Co-host of We Study Billionaires and investment analyst at The Investors Podcast. Clay made a career transition from actuarial work in insurance to podcasting, taking nearly a 50% pay cut to pursue meaningful work at TIP. He's built a concentrated portfolio focused on quality compounders and has developed expertise in interviewing successful investors and analyzing business fundamentals.
Key Takeaways
Embrace "Sidecar Investing" with Exceptional Leaders
Clay advocates for investing alongside generational CEOs who have proven track records of navigating different market environments and creating shareholder value. (03:24) Using Meta as an example, he highlights how Mark Zuckerberg successfully transitioned Facebook from desktop to mobile, executed transformational acquisitions like Instagram and WhatsApp, and built AI research capabilities since 2013. (04:49) This approach allows investors to outsource capital allocation decisions to some of the world's best operators, essentially investing in a "hedge fund" without paying management fees.
Prioritize Quality Growth Over Deep Value Opportunities
When forced to choose between 3% shareholder yield with 12% growth versus 12% yield with 3% growth, Clay consistently favors the higher-growth option. (39:45) This strategy reduces the frequency of buy-sell decisions since great companies can be held for years as they compound earnings. It also provides asymmetric upside potential - if one investment grows at 24% instead of the expected 12% over ten years, it delivers an 8X return that can significantly impact portfolio performance.
Apply Margin of Safety Beyond Investing to Life Decisions
Clay demonstrates how value investing principles extend to career choices and personal finance. (71:01) By avoiding lifestyle creep, maintaining no consumer debt, and living below his means, he created the financial flexibility to transition careers and take a 50% pay cut to join TIP. (72:09) This margin of safety in personal finances enabled him to make career decisions based on fulfillment rather than just financial necessity.
Geographic Diversification Provides Valuation Opportunities
International markets, particularly Poland and Japan, offer more attractive valuations compared to expensive US markets. (14:27) However, this comes with additional considerations including currency risk, different corporate governance standards, and varying levels of market participation. Clay suggests requiring higher expected returns (16% vs 12%) from international investments to compensate for currency volatility and other risks.
Focus on Intrinsic Value, Not Market Narratives
Stock prices can oscillate dramatically based on changing narratives while intrinsic value grows gradually over time. (19:37) Clay uses examples like Constellation Software and Alphabet to show how the same company can go from "unstoppable compounder" to "AI loser" in months, despite consistent business fundamentals. (20:54) Successful long-term investing requires focusing on business execution rather than getting caught up in short-term sentiment swings.
Statistics & Facts
- Over the past five years, Interactive Brokers has seen account growth of over 30% per year while maintaining some of the lowest marketing budgets among online brokers, demonstrating the power of organic growth through superior product offerings. (08:03)
- In 2025, Topicus deployed approximately €780 million in acquisitions compared to €150 million in 2024, representing more than a 5x increase in capital deployment year-over-year. (23:13)
- The top 10 companies in the S&P 500 now account for 40% of the index's market value, making it increasingly concentrated on the continued success of mega-cap technology companies. (12:48)
