Random Ramblings March 2025: the market sell off, relationships with management teams, corp gov

·32 min·3 clips

Andrew Walker admits his worst trait is not cutting losses when a stock thesis breaks.

The episode begins with a sponsor ad for Dilupa, a tool for post-earnings analysis. Andrew Walker introduces the show as a random ramblings episode recorded on March 15, 2025. He opens with a disclaimer that nothing is investment advice. The first topic is the market sell-off, where Walker describes the past six weeks as brutal, especially for the Russell 2000, down 10% over the past month. He argues that dislocation feels worse than indices show, citing examples like Shift4 down 30% and Exponential Fitness down 57% after bad earnings. Walker advises investors to look dispassionately at their portfolios and consider swapping into more dislocated opportunities. He notes that many companies have stronger balance sheets post-COVID, reducing bankruptcy risk. The second topic is relationships with management teams. Walker admits his biggest flaw is being slow to sell when a thesis breaks, calling it 'thumb sucking.' He shares that his investments have performed worse when he forms good relationships with management, speculating that friendships can lead to outsourced judgment. He references Bill Ackman's email to Valeant's CEO as an example and warns that CEOs are often skilled salespeople. The third topic is activism and corporate governance. Walker talks about the 'dark arts' of corporate governance and how it becomes addictive to spot issues. He discloses a long position in Sage and mentions using his podcast to highlight governance problems in small-cap companies, where boards may lack stock ownership and overpay themselves. He invites listeners to reach out with similar situations. The final topic is a personal reflection on moving from New York due to taxes and cost of living. Walker wonders where a young Warren Buffett would live today, suggesting possibilities like Asia for boots-on-the-ground investing in fast-growing economies. He ends by promoting the Micro Cap in Las Vegas conference in April and encourages attendance. The episode closes with a reprise of the Dilupa ad and a standard disclaimer.

As heard by us

A balance-sheet reset changes what a market sell-off can actually mean.

An investing discussion reframes a market sell-off as a test of balance-sheet durability. The host argues that many companies used the post-COVID cash-flow surge to repair their finances, then turns to U.S.

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Want to hear why a 50% stock drop can mean something different after a company has rebuilt its balance sheet?

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