Behind the Balance Sheet · Stephen Clapham's Podcast on Value Investing | Stockmarket Analysis | Equities

#56 The Sculptor - Jonathan Tepper on 16 Stock Portfolios, Moats & Buying Oligopolies

·1 hr 3 min·4 clips

Tepper says the worst cases are "mergers to monopoly" in highly regulated industries.

1. Behind the Balance Sheet talks with Jonathan Tepper about childhood in Madrid, monopoly research, and building Privat Capital. 2. Steve Clapham hosts Jonathan Tepper, a friend, author of Shooting Up, founder of Variant Perception, and manager at Privat Capital. 3. The episode asks how Tepper's upbringing, reading, and research work shaped his investing in oligopolies and free-cash-flow businesses. 4. Tepper says his parents moved to Spain in 1983 as Christian missionaries and settled in San Blas, where heroin use and juvenile crime were high. 5. He says his parents began helping addicts because there were almost no rehab centers in Madrid, and the center started in 1985 with one addict. 6. Tepper says the program is now in 20 countries with over 2,000 addicts in the program and hundreds of thousands helped over the years. 7. He describes early addicts sharing needles, becoming HIV positive, and dying of AIDS, which made those losses personal for him and his brothers. 8. Tepper says grief made him more serious, more introverted, and more studious, and pushed him toward academic drive. 9. He recalls being aware that the family was poor, and says his father taught him economics and accounting on the back of napkins. 10. He cites the Big Mac Index, the strong dollar in 1985, and the peso move against the dollar as part of that early education. 11. Tepper says reading varied by year, from Dante's Inferno and St. Augustine to memoirs and industry histories tied to his fund's research. 12. He says he read about a hundred memoirs for Shooting Up and then felt overdosed on memoirs. 13. He says the line "schedules are the tyranny of small minds" captured his father's attitude toward time and church services. 14. He says he disliked the lack of punctuality as a child but later recognized that he also works in intense bursts rather than rigid schedules. 15. Tepper explains that he wrote Shooting Up years earlier in New York after reading Flying Over 96th Street in Barnes & Noble on the Upper West Side. 16. He says a mentor later urged him to publish it before his father passed, and that Little, Brown is publishing the book. 17. Tepper says his university path involved skipping almost two years through AP tests, writing two honors theses, and studying Ladino with a fellowship. 18. He says investing appealed to him after Oxford because hedge fund managers were traveling to Japan and learning about companies and industries all year. 19. The interview stays conversational and reflective, with Clapham pressing for specific examples about grief, education, research, and portfolio construction. 20. Listeners who like investing, memoirs, and concentrated portfolio strategy will get the most from it, while listeners seeking a fast market-news recap may skip it.

As heard by us

A clear look at moats, concentration, and the kinds of market power that can actually last.

Steve Clapham frames market concentration as a question of structure rather than appearance, weighing moats against the difference between businesses that seem dominant and those that can actually hold power over time.

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Why you'd press play

If you want to think harder about market power, mergers, and natural monopolies, this is your episode.

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