In short: One of two new TCI positions reported for Q2, funded by the Microsoft exit. Described, not rated: one of "the two largest produces of aggregates (things like gravel, crushed stone, and sand) in the U.S." The moat argument is Lynch's: "Rocks, sand, and gravel are cheap commodities on their own… The real moat for an aggregates business is its location. These companies are essentially local tollbooths." No Compounding Quality rating or valuation is attached.
Martin Marietta digs gravel, crushed stone and sand out of quarries. The reason a serious investor would swap a software giant for that is entirely about geography. The rock itself is worth only a few dollars a ton, so it cannot be shipped far before freight costs exceed its value — which means whoever owns the quarry nearest a construction site effectively owns that site's business. Peter Lynch's phrase for it is a local tollbooth.
New quarries are close to impossible to permit, so the position cannot be competed away, and no software can replace crushed stone. That is the whole argument: a business with no technological risk at all, at a moment when technological risk is what the buyer was trying to escape. No Compounding Quality rating or valuation is attached — it appears here as somebody else's decision.
In short: One of Hohn's two new ~1.4% "watcher positions" — a starter stake, relayed by Carlson without a stance of his own. "MLM is not technically a monopoly, but it is very much like a controlling stake or a monopoly in many chemicals and materials in certain geographical areas. It is very difficult to disrupt." Fits Hohn's taste for physical businesses whose local market share and barriers to entry make them hard to replace.
Martin Marietta supplies construction materials — aggregates, cement, chemicals. It's one of two new starter stakes in Hohn's fund at roughly 1.4%, which Carlson labels a "watcher position": too small to be a conviction bet, big enough to signal interest.
Why it fits the moat screen: these materials are heavy and expensive to move, so whoever owns the quarry nearest a market effectively controls that market. "Not technically a monopoly, but… very much like a controlling stake or a monopoly in many chemicals and materials in certain geographical areas."
Carlson relays it as an example of the non-tech, hard-to-disrupt businesses worth studying in that portfolio, without taking a position himself.
15:20These are massive positions already. He's added slightly more to each of them, and he maintains his large Moody's position. He added two watcher positions. I call these watcher positions because they're at around a 1.4% weighting. One of them is Martin Marietta. This is MLM. Now, MLM is not technically a monopoly, but it is very much like a controlling stake or a monopoly in many chemicals and materials in certain geographical areas.
In short: Agreed to combine with limestone supplier Lhoist North America in a $13.5B deal (incl. debt), funded with $7B cash + ~$6.5B stock. A flagged corporate action, not a rated pick.
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