Pieter Slegers — Success Secrets of Buffett, Lynch & the Great Investors
"To me, investing is saying no as soon as possible." The Compounding Quality synthesis: a six-criteria quality checklist, three valuation methods, and the behavioural edge that lets retail beat the pros — with four named portfolio examples.
One-line take: A framework-first interview, not a hot-tips segment. Slegers screens ~156 names against six quality criteria (moat, founder skin-in-the-game, low capital intensity, capital allocation / ROIC >15%, >10% margins with >90% earnings-to-FCF conversion, >7% revenue / >9% FCF-per-share growth), then values with three methods (forward PE vs 10-yr average · an earnings-growth model · a reverse DCF) after haircutting analyst estimates 30–40%. His argued longs are Kinsale Capital ("GEICO 30–40 years ago" — E&S insurer, one-platform tech edge, founder-CEO), Medpace (founder August Troendle keeps $1.9B of a $2B net worth in it; a biotech-trials CRO that gets paid win-or-lose; reverse-DCF implies ~11% FCF growth needed vs ~15% historical), and Dino Polska (the rare reinvest-everything compounder, founder >50%). Apple he admires but flags as too cash-rich to reinvest (hence buybacks); LVMH he cites only as a name currently flashing his cheapest-in-10-years signal. His two admitted sells are Text S.A. (bought, then AI turned from tailwind to threat — sold −20%, since down another ~50%) and Ulta Beauty (beauty retail more competitive/fragmented than he'd modelled). Performance since Oct 2023: +40% vs S&P +24%, owning zero big tech. (The trailing ~32 min — from 52:40 — is the host's separate New Harbor Financial advisory segment with Mike Preston; those precious-metals/hedging names are NOT Slegers and are excluded from the table.)
1. Stocks & names mentioned
Stance reflects how each is framed in this interview. Research legend: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis. Foreign listings use their Yahoo symbol as the row id (Dino Polska DNP.WA · Text S.A. TXT.WA, both Warsaw) with research pointing at the US OTC line / home-exchange page. Only names Slegers himself discusses are listed — the trailing New Harbor advisory segment (gold/silver/GDX/GDXJ/SLV) is excluded.
| Ticker | Name | Research | View | What he said | At |
|---|
| KNSL | Kinsale Capital | QT · SA · STK · FA | Positive | "Really enthusiastic about right now." An E&S (excess & surplus) insurer that writes the risks traditional carriers won't, at much higher premiums; a one-platform tech edge gives it better data and pricing, so it's more profitable than peers. Founder-CEO Michael Kehoe; wants to double market share in 10 yrs. "Reminded me a lot of what Buffett said about GEICO 30, 40 years ago." | 33:31 |
| MEDP | Medpace Holdings | QT · SA · STK · FA | Positive | A CRO that runs small/mid biotech clinical trials — "gets paid no matter what" (not a zero-to-one biotech bet). Founder August Troendle (1992) is still CEO with $1.9B of a $2B net worth in the stock. Reverse DCF implies ~11% FCF growth needed for a 10% return vs ~15% historical — "too conservative… a great investment today." Tariff turmoil = a cheaper entry. | 36:46 |
| DNP.WA | Dino Polska | SA · STK | Positive | His example of the rare "golden goose" — a quality business that can reinvest almost all its free cash flow at a high return. A Polish grocery chain; founder Tomasz Biernacki still owns >50%; "phenomenal track record… growing at phenomenal rates." 2025 is the first year it won't reinvest 100% of FCF (getting bigger), but still a substantial portion. | 26:30 |
| AAPL | Apple | QT · SA · STK · FA | Neutral | "A phenomenal business, very profitable, high return on invested capital." But used as the counter-example to the golden goose: it's so cash-generative it can't reinvest it all — "one of the reasons they started buying back shares… they have too much cash and don't know what to do." Admired, not pitched as a buy here. | 25:59 |
| LVMUY | LVMH (ADR) | QT · SA | Neutral | Cited only to illustrate valuation method #1 (forward PE vs 10-yr average): LVMH is a name "today" trading at "the cheapest valuation over the past 10 years" — an interesting signal. No full thesis or stated position given. | 40:56 |
| MKL | Markel Group | QT · SA · STK · FA | Neutral | Named in passing as an "old-schooled" insurer comp — the kind of carrier that runs 10–15 separate platforms for different risks, contrasted against Kinsale's single-platform tech advantage. Not a stance on Markel itself. | 34:36 |
| ULTA | Ulta Beauty | QT · SA · STK · FA | Negative | Recently sold (one of only two sells since 2023). Thought it was a great business / clear US beauty-retail leader, but "the retail beauty space is way more competitive than I initially thought" and is becoming more fragmented (TikTok, influencer brands). A sell = an admitted mistake in the original case. | 48:56 |
| TXT.WA | Text S.A. (LiveChat) | SA · STK | Negative | The other sell. A live-chat / chatbot SaaS out of Poland. He initially thought AI would strengthen it; "after a few months it became clear it's more a threat than something that helps them." Sold early 2024 after 4–5 months at a −20% loss; since down "an extra 50%." Chatbots risk becoming a commoditized product. | 47:56 |
Stance = how each name is framed in this interview, not a price rating. The reusable process (the six criteria, the three valuation methods, the sell rule) lives on the actionable insights page.
2. Talking points
0:00 "Investing is saying no as soon as possible"
- ~60,000 listed stocks; nobody can analyse them all. He makes it a sport to find a reason to say no within 60 seconds — "in 98% of company examples you can."
2:29 The one essential: discipline
- "Multiple routes lead to Rome" — Lynch ran 100+ stocks at Magellan; Buffett concentrated in ~14. Pick the strategy that suits you and stick to it rigorously. His is quality investing at a fair price.
3:40 The two biggest investment mistakes
- Asks great investors their biggest mistake; the answer is always one of two: (1) selling winners too soon (one Starbucks/Apple held 20 yrs offsets all your losers), or (2) understanding a great business but never buying it (Buffett + Microsoft via Bill Gates).
4:57 Three advantages — retail's edge is behavioural
- Informational advantage is gone (everything's online); analytical advantage is hard vs armies of quants/PhDs/AI, especially on large caps. The one edge a retail investor keeps is behavioural: no clients to answer to, so you can underperform a quarter, sit in cash, and wait.
10:25 The yes / no / too-hard pile; Lynch's 6-of-10
- Munger's three piles — say no, and keep the option to wait. Lynch: if 6 of 10 do what you expect you'll be excellent. Typically 6 are mediocre, 2 bad (maybe bankrupt), but the 2 winners (a 10-bagger you don't trim) offset everything.
13:20 The six quality criteria
- (1) Moat; (2) skin in the game — founder-led, majority of wealth in the business (an HBR study: founder firms outperform ~3.9%/yr); (3) low capital intensity; (4) capital allocation; (5) high profitability; (6) attractive growth. Each on its own should beat the market long-term.
15:42 Profitability + earnings quality — the FCF-conversion test
- Profit margin ≥10%, but more important: ≥90% of earnings converted to free cash flow. "Earnings are an opinion; cash flow is a fact." Cites Jeremy Siegel's Stocks for the Long Run: the top FCF-conversion decile beat the bottom by ~18%.
17:28 Attractive growth — thresholds + margin of safety
- Wants >7% revenue and >9% FCF-per-share growth, past and expected. Analysts are too optimistic, so haircut by 30–40% (Graham margin of safety); management guidance beats analyst estimates (firms underpromise/overdeliver). Screen ends at ~156 qualifying names.
22:59 Most CEOs are terrible capital allocators
- CEOs rise as the best salesperson/marketer/technologist, then face capital allocation — their most important job — untrained, often with personal agendas (prestige M&A, revenue-linked bonuses). Measure the skill with ROIC >15% (NOPAT ÷ invested capital).
25:13 The Munger caveat — high ROIC only counts with a reinvestment runway
- Munger: a 20–30% ROIC business held 30 years does wonderfully even if you overpay. But the "golden goose" is a high-ROIC business that can reinvest everything at that rate — those are very rare, and that's how compounding machines are made.
25:59 Apple vs Dino Polska — cash you can't reinvest
- Apple is phenomenal but so cash-rich it can't reinvest it all → buybacks. Dino Polska is his rare counter-example: a Poland grocery chain, founder Biernacki >50%, still reinvesting nearly all FCF at high rates.
27:56 Compounding Quality — the product & the transparency
- ~500k Substack subscribers, ~1M followers across channels; all his investable assets are in the published portfolio (skin in the game). He announces buys/sells on Sunday so readers can trade before he does. Started anonymously (a Buffett cartoon → a cease-and-desist from Munger's firm → his own face).
33:31 Kinsale Capital — "GEICO 30, 40 years ago"
- E&S insurer writing the risks others won't, at far higher premiums; a single tech platform (vs peers' 10–15) gives better data → better pricing → higher profitability. Founder-CEO Michael Kehoe; three growth pillars (E&S growth, share gains — aim to double share in 10 yrs, and eventually bringing equity investing in-house from BlackRock).
36:46 Medpace — paid win-or-lose, founder all-in
- A CRO that executes small/mid biotech clinical trials — gets paid regardless of whether the drug works (not a binary biotech bet). Founder August Troendle (since 1992, still CEO) holds $1.9B of a $2B net worth in it. Healthy balance sheet, very profitable, attractive growth; tariff turmoil offers a cheaper entry.
40:17 Three valuation methods (kept brief)
- (1) Forward PE vs its own 10-yr average (naive but useful — LVMH now at its cheapest in 10 yrs). (2) Earnings-growth model: expected return = EPS growth + dividend yield ± multiple change (Kinsale ≈ 13% − 1% + 0% ≈ 12%/yr). (3) Reverse DCF — solve for the FCF growth the current price implies (Medpace implies ~11% vs ~15% historical → cheap).
44:48 Roughly right beats exactly wrong; the track record
- "You should be able to value a stock on the back of a napkin. If you need Excel to decide, it's probably not interesting." Portfolio since Oct 2023: +40% vs S&P +24%, with zero big tech (he's skeptical of big tech).
46:25 When to sell — only when the case breaks
- Quality is buy-and-hold; never sell purely on valuation (his biggest winner is expensive but untrimmed and by far his largest position). Sell only when the investment case is no longer intact. The test: "would you still own it if the market closed for 10 years?"
47:56 The two sells — Text S.A. and Ulta Beauty
- Text S.A.: AI flipped from expected tailwind to threat; sold at −20% after 4–5 months, since down another ~50%. Ulta: beauty retail more competitive/fragmented than modelled (TikTok, influencer brands). Both = admitted errors in the original thesis.
52:40 [Not Slegers] New Harbor advisory follow-on
- From here the host talks markets with Mike Preston of New Harbor Financial — ~40% equity with tactical S&P hedges, and a precious-metals discussion (gold/silver ratio, GDX/GDXJ, SLV). A separate advisory segment, listed here only to mark the scope boundary; none of its names are Slegers's and none are in the table.
3. In plain English
A jargon-free summary of the thesis behind each argued name — what it is and why he holds the stance. (Renders on each name's consolidated page.)
KNSL — Kinsale Capital Positive
Kinsale is an "excess & surplus" (E&S) insurer — it writes the odd, hard-to-price risks that ordinary insurers refuse, and charges a lot more for taking them. Its edge is running everything on one in-house software platform while old-line rivals juggle 10–15 systems: more data, faster quotes, sharper pricing, and higher profits than peers. The founder still runs it, and it aims to double its market share over a decade. Slegers compares it to the young GEICO that made Buffett rich — a low-cost, fast-growing insurer with a long runway.
MEDP — Medpace Holdings Positive
Medpace is a contract research organisation (CRO): biotech companies pay it to run their clinical drug trials. The key point is that Medpace gets paid whether or not the drug ends up working — so you get exposure to biotech activity without the all-or-nothing risk of betting on one drug. The founder, who started it in 1992 and still runs it, keeps almost his entire net worth ($1.9B of $2B) in the stock, so his interests are aligned with shareholders. Running a "reverse DCF" (working backwards from today's price to the growth the market is assuming), Slegers finds the price only requires ~11% cash-flow growth to deliver a 10% return, versus the ~15% it has actually been growing — so he thinks the market is being too pessimistic and the stock is a good buy.
DNP.WA — Dino Polska Positive
Dino Polska is a fast-growing supermarket chain in Poland, still majority-owned by its founder. Slegers uses it as his example of the rarest and best kind of business — a "golden goose" that earns a high return on the money it invests and can plough almost all of its profits back in at that same high return, compounding for years. (Most highly profitable companies, like Apple, eventually generate more cash than they can reinvest and end up buying back stock instead.) Its US-listed line trades over-the-counter as DNOPY; the row uses its Warsaw ticker (DNP.WA) because the plain symbol "DNP" belongs to an unrelated US fund.
AAPL — Apple Neutral
Slegers admires Apple — hugely profitable, high returns on capital — but raises it as the limit of a great business, not a pick here. It throws off so much cash that it can't reinvest it all in the business, which is why it hands so much back through share buybacks. That makes it a fine company but not the compounding machine he prizes, where profits can be reinvested at a high rate for years.
LVMUY — LVMH Neutral
LVMH is the French luxury-goods giant (Louis Vuitton, Dior and others). Slegers mentions it only to demonstrate his simplest valuation check — comparing a stock's current forward price-to-earnings multiple to its own 10-year average. LVMH, he notes, is currently at its cheapest valuation on that measure in a decade, which he flags as an interesting signal. He does not lay out a full thesis or say he owns it.
ULTA — Ulta Beauty Negative
Ulta Beauty is the leading US beauty retailer, which Slegers bought and then recently sold — one of only two sales he's made since 2023, and he treats every sale as an admission the original decision was a mistake. He'd thought its market leadership made it a durable quality business, but concluded the beauty-retail space is more competitive and more fragmented than he'd assumed, as TikTok creators and influencers launch their own beauty and fragrance brands. So the moat wasn't as wide as his thesis required.
TXT.WA — Text S.A. (LiveChat) Negative
Text S.A. (formerly LiveChat Software) is a Polish company that makes the little chat and chatbot windows that pop up to help you on websites. Slegers bought it expecting AI to make its product stronger, but within a few months decided AI is more of a threat than a help — advanced chatbots risk becoming a cheap, commoditised product that competes its business away. He sold after only 4–5 months at a 20% loss; the stock has since fallen roughly another 50%. It's his cautionary tale about owning a business whose future is hard to predict. The row uses the Warsaw ticker (TXT.WA) because plain "TXT" is the US ticker for Textron; its US over-the-counter line is LCHTF.
Summary & timestamps derived from the public YouTube video (transcript in transcript.txt) for personal study. Not investment advice. © Thoughtful Money & Pieter Slegers / Compounding Quality for source material.