What is The Gorilla Game?

Apologies for the spam but I've recently revamped the page on what The Gorilla Game actually is. Along with this, I will be sending out a series of articles on investment philosophy and process.

Who am I?

I'm a former buyside analyst. I've spent over 10 years as both a generalist and sector specialist looking at companies in all sectors in all market cap ranges all over the world.

I got into investing reading Ben Graham, Buffett, Munger, Klarman, and Greenblatt, and all the other suspects and spending my nights and weekends researching stocks.

My first analyst job was at a large asset manager, and on reflection, it gave me two big advantages for which I'm very grateful.

1. First, I had great corporate access and was allowed to do hundreds of "reps" meeting management teams at our office, at their office, and at conferences (this was before all the virtual meetings we see today). This was an amazing learning opportunity. I had the opportunity to ask a lot of "dumb" questions which helped me develop frameworks and mental models for understanding companies, industries, moats, and risks. You'd be surprised what you can learn asking a CEO "what is so great about your product" or "which competitors suck and why?".
2. Second, I sat on a floor with dozens of different PMs and Analysts allowing me to see different analytical styles, investment philosophies, and even different ways of interviewing management. Seeing this allowed me to develop my own style based on what works for my temperament, my strengths, and my interests.

I've since worked at big and small shops as a generalist and specialist but due to my desire to 1) be purely focused on analysis , 2) live outside major financial centres and 3) have flexibility in my life, I've decided to become an independent analyst.

My target audience are serious individual investors or professional investors looking for independent research that is different from the sell-side.

Contact me at hunter@thegorillagame.com or find me on twitter @the_gorillagame

What is The Gorilla Game?

The Gorilla Game is my investment journal. In this journal, I do deep dives on companies that interest me. I spend at least a month and usually longer diving deep to see if the company passes all of my filters of potentially being a great investment. In many cases, I like the business but not the valuation, so I put it on a watchlist and patiently wait. While I wait, I closely follow the industry and monitor developments.

In The Gorilla Game, I publish my insights. Writing is a core part of my investment process and something I've done on all of my investments. Writing out my thesis helps me analyze gaps in my rationale or makes it obvious when there are areas where I lack understanding. With The Gorilla Game, I'm sharing my thoughts and analysis on all the companies that interest me.

What can you expect?

The Gorilla Game is meant for investors that are looking to buy and hold a business for 5, 10, or even 20 years. While some of my ideas will be actionable right away, in most cases, my goal is for the end-investor to gain a deep understanding of a business and why it is special providing the foundational knowledge to act in size and with conviction should the business become cheap.

• Expect 8 to 10 Deep Dives of potential compounders every year.
• Expect a Monthly "Note" summarizing news or articles
• Expect Annual Refreshes of Valuations or more often if merited
• Expect coverage of any major events impacting the covered companies
• Expect the occasional industry primer

What is my investment philosophy?

Simplistically, I am a value investor. I'm trying to buy assets for far less than their intrinsic value. More practically, I am a "core" investors looking for compounders. You can read about my thoughts on "core investing" here.

What is my search process?

I used to go through stocks A to Z, randomly listen to investor presentations, and take meetings with any company I could. Over time, I developed a bigger watchlist as well as network of like-minded investors who gave me ideas to dig into.

Today, my search process is grounded in a few mental models and frameworks. I have a few "types" of businesses that I like and if a company come across my desk that fits into these frameworks, I start following them.

For example, I have a mental model around "people businesses" with unique cultures. This might involve a very distinct way of compensating employees or a unique way of organizing business units. I felt that Globant's "studio model" was unique in the IT services industry so I dug-in. Companies like Reply have a unique organizational model. EPAM has a unique approach to training and promotion.

Serial acquirers are another obvious example of a mental model. There is a lot of subjective analysis when it comes to analyzing them, but for companies like Judges Scientific, HEICO and Diploma that have had a consistent approach to capital allocation for multiple decades, you can analyze their track records and understand the end-markets they compete in.

Another example might be "low cost/price disruptors" where the company is satisfied earning a very thin margin and othewises makes herculean efforts to give back as much price to the end-customer as possible. There value proposition is very clear. Here, you have your typical suspects like Costco but I've stumbled on companies like 3i's Action, Japan's Pan Pacific, and Floor & Decor.

I always look for companies that have customer evangelists. These products are so good that their end-customers actively try to recruit their friends and family. Peloton had this attribute. Normally, the product is extremely compelling or the company provides an unusually high level of customer service.

What is my research process?

There is no magic here. I read all the public filings and transcripts of the company and its competitors, suppliers, and customers. I try to get my hands on expert network transcripts, and , I try and find someone in my own network I can talk to. I try to find relevant trade publications to get a sense of what is happening on the ground and I dig into employer review sites and forums.

While harder today, I try my best to talk to management. While I've historically been quantitatively oriented, my modelling has gotten simpler and simpler over time. Most of my time is spent on trying to qualitatively understand the moat, the customer value proposition, how management thinks, and what could go wrong.

In this article, I talk about whether pros have structural advantages over individuals.

At the end of the day, there is no "single truth". Every company has things that are getting better and getting worse. A software company's moat may be wide but there are always individual modules where a better point solution is emerging or pockets of the market where customers are starting to feel like the software is overpriced.

Once I have a good grasp of the business, I write everything down. This writing process normally takes several weeks as it uncovers areas where I lack understanding or areas where my logic may not be sound, forcing me to re-assess and re-evaluate.