WCM Investment Management

“Since I've been here, we have never had a five-year plan. We have sales targets and we have some projects we're trying to complete every year, but we don't have a business plan for the next one, two, three, four or five years.”

“So our thing is the own equity. We'll continue to pay your dividend. You participate in the profitability of the firm for seven years. After that, you give your equity back at book value, which at an investment management firm is nothing.”

“We had some outside consultants that told us it was going to take, I don't know, Two years to get migrated and all the relational connections between the data. He did it with very little help in less than two and a half or three months.”

“We've almost blown up at least three times that I know of, but because it is a high margin business with good recurring revenue, you can afford to pay people.”

“We have a thing called Sherpa, which is this internal AI research assistant. It's built by the investment team, and it's a data scientist and an AI guy we brought in. It does deep research on earnings transcript, expert data networks, aggregating colossal amou…”

“Anybody who wants to take on a project with a tool that they have access to on an AI side, they can just jump in and do it without question, without permission, without any bureaucracy.”

“We say we have a saying that you do that sooner, not louder, before you build up a story about it. You give the person feedback before it's expanded into a narrative that's a fiction as much as it is the truth.”

“You need a dedicated person building into the culture, reminding people of good relationship habits, helping people interact in ways that reduce friction, that encourage connection and collaboration, and that's Matt's job. It probably would have been useful at…”

“When you expand that scope out to the whole firm, you essentially turn your compliance team of five to six to a compliance team of a hundred. You have everybody looking out for the firm in the same way. And because they know they're not going to come to me and…”

“When you Treat mistakes like that. You tell people that they're survivable. And then when they believe that, they tell you the truth. They tell you it earlier. And then when they tell you the truth about anything, we just solve problems faster and better.”

“Our view is have a really big field with really right fences and let people run. This weird thing happens where People know where the fences are. 95% of the time, they don't have to check. They know. And when they don't know, that five percent of the time wher…”

“The second you write something down, you give yourself an excuse not to do anything else. And I think that's what's the hard part about our culture is it requires a lot more work Than just putting these concepts on a piece of paper. It's acting on those concep…”

“Kurt, who's now retired, owned 90% of the firm. When he retired three years ago, he owned 24% of the firm, a firm that was hundreds of times larger than it was when he started, and he handed the rest of that equity to the rest of the employees at virtually no …”

“We're running one hundred and twenty billion dollars globally.”

“We want to overtrust people before they're ready, put them in roles before they've proven they can do them. That's our whole mantra. And then we pay them really, really generously.”

“I'm retiring in two years, and he's taking over my job.”

“The number of people that have left WCM voluntarily in that time span, it's less than three or four.”

“There's a layer of nepotism here that's worked incredibly well. Because people are pre-vetted, and if you're hiring not for credentials, but for self-awareness for the whole person, that's the whole ballgame for us.”

“When I came on board, they were running billions of dollars and hadn't had a single in-house counsel doing anything.”

“Every incentive today is to Enter preservation mode, become benchmark hog, coast on the brand, and now it's really about staying true to who we are, and being different, and getting better, and serving others.”

“That question is very well-intentioned, but it effectively puts the burden on the receiver. So then you have to think through this person in their shoes with their context they have, with their skill set, how can they help me? Versus this notion of there are p…”

“You can have two, three, five companies that talk about the exact same behaviors, whether it's lean or the Danaher business system. All these companies are talking about the exact same behaviors, but maybe they don't have the right social reinforcement mechani…”

“Fast forward, we got an amazing opportunity to co-lead two rounds with Databricks. We were just involved with the Anthropic raised.”

“Our first investment was in Andrel at an eight billion dollar valuation. We were also the first crossover fund to invest in Andrel.”

“We're building tools to really codify mode trajectory and culture into a model. How do you diagnose change in the company's mode? Look at it today. Put all this data in there, whether it's SEC filings, transcripts, sell-side reports, expert transcripts, and lo…”

“Creativity is shockingly hard to find in the investment community. People who can Truly live a few years in the future and envision how today's fundamentals and narrative can evolve. There's just such a reflexive tendency to drag current or recent results forw…”

“I think that we still believe that there's pretty significant tailwind to go, and it's, these trades are far from done.”

“What was happening is collaboration was tipping into coordination. It started to feel bureaucratic. This was a very low lift way of making a light touch collaboration, which is important without meeting creep.”

“There was a moment years ago when we were trying to go all in on this concept of mode trajectory and pattern recognition. And several of the analysts at the time were questioning whether this was the right thing to do. And most of the people in the room said, …”

“During those months that what we had sold was snapping back, you'd get email chatter internally. We'd do client calls and be like, are you sure you guys made the right moves here? These software stocks, for instance, are up 40% in the last month. You just sold…”

“I mean, you're selling names like Louis Vuitton and Costco and buying names like Rolls Royce and Siemens Energy.”

“And coming out of that period, we basically created a hundred different categories across about 700 companies.”

“One of the conclusions was the portfolio was too correlated, but the root cause of that was the research pipeline had become too correlated.”

“When you go through a lawn bull market, like you did up to 20, 22, it's easy to focus your energy and resources around things that are doing really well. With the benefit of hindsight, after 10 years, you could maybe have looked back at the focus list and said…”

“We'd been through this ten-plus year period heading into the COVID bull market where backward and forward-looking quality and growth were highly correlated. Effectively, you could just keep owning the same thing and do well. Names like Louis Vuitton, they just…”

“Oftentimes playing the long game is the right strategy, the market's myopic, stick to your knitting, but there are occasions where long-termism is a lazy crutch.”

“I think you can borrow ideas, but once you develop your own voice on the topic and lean into your journey around it changes everything. Your disposition changes, your body language becomes much more engaging, meetings transform from a test or a conversation, a…”

“I think if you can't think of a solution to a problem, or at least a pathway to a solution, don't make your identity just constantly griping about the problem. Amplifying drama around it. I feel like a lot of young people especially get trapped in that identit…”

“If you want to build a high trust team, you've got to get all the noise out of the way, the frictions, the insecurities. And I think starting with vulnerabilities, at least I've found to be the best starting point.”

“We did an offsite several years ago where Mike Trigg and myself, we got up, and we just talked about every mistake we made over the last 10 years, and that was, it was like a fifty-point PowerPoint deck, and showing about these mental models that were just, yo…”

“We think about that a lot because we're not big strategic planners, five-year vision type of manager, because we think it can create blinders, right? You miss opportunities right in front of you.”

“I think we got a little bit lopsided in the types of names we were writing up. For a few years, and so that was a change we've made since.”

“Actually the worst possible outcome, in my view, is learning the right lesson at the wrong time. At least in the medium term, you'll end up compounding the mistake you just made and drag out a hundred performance for many years.”

“And one major initiative we actually completed recently to address this feedback quality problem in investing is building out a fully fledged proprietary journaling app that's custom made for investing. And so we've long here at WCM had a journaling culture to…”

“The problem in investing is that feedback quality is poor, at least for our flavor for investing. You're long-term, you're not making that many decisions, takes a long time to get the feedback, multiple years if you're right or wrong, and then there's just a t…”

“We own a company called Mercado Libre, which you probably know is like the Amazon slash PayPal in Latin America. And what we always loved about them was the level of candor they had about mistakes they made. And the level of external awareness.”

“I think a lot of people think about culture as touchy-feely, right? Are employees happy? And for us, that's not the question. It's more about alignment. Are employees behaving in a way that will help that company grow its moat?”

“We found historically a lot of outsourcing companies in various industries that can climb the value chain over time and evolve from low value outsource manufacturers, which is tend to be how outsourcing companies are born to high value outsourced R&D partners.…”

“We like long dialogues over, in some cases, years, where we exchange thoughts with a candidate.”

“If you have a culture where people optimize for themselves and their own career path, you really just introduce a bunch of Unspoken friction into the process that just bubbles underneath the surface and gets in the wake of judgment.”

“So one significant process tweak we made is replacing our, what was a generic risk section in our write-ups with now what we call a premortem section.”

“So right now, actually, we're doing a reflection week internally. We do it twice a year. We carve out a week, and you're turning off all your screens. You're not looking at stock quotes or news, and you're just reflecting in the spirit of getting better.”

“One is to save valuation for the end of the process. I think if you have a valuation-first mindset, it steers you towards value traps, effectively, companies that are becoming less good on the margin.”

“You can overpay for a great and improving company, but you'll recover over time. It might take a long time, but you'll recover. There's a pathway for recovery, whereas if you misvalue a bad business, there's no pathway to recovery.”

“As we think about mode frameworks, how to think about competitive advantage, that's another field of compounding knowledge. If you can build patterns around it, that's more evergreen, that's more scalable, and you can apply it to multiple judgment calls.”

“If you understand a company's culture, you can overlay that culture onto each of those judgment calls over a period of time. So maybe that boosts your batting average by a few percentage points, but that can compound significantly over time.”

“There's a gravitational pull towards expiring knowledge. There's so much noise out there, and if you don't build guardrails around how you spend your time, you're gonna fall into this notion of just gathering more information, having a reactive mindset, benchm…”

“The one thing I've learned is you would think an unconstrained environment leads to more creativity, but it's the old playground analogy. If you put a fence around a playground, the kids start to spread out and explore. If you take away the fence, everyone sta…”

“I think if you're greenlight a movie, it's kind of picking a stock. You often get described as having the magic touch. If that's how you're judged, it's natural that you're going to develop fixed mindset, especially if there's some luck and cause and effect qu…”

“I started to reframe that insecurity into an asset, thinking if I can understand why people have different opinions, and then maybe map out why those opinions will converge over time, why, how, and when, that would be an interesting approach, and it dovetails …”