Jeremy Deal – Use Differentiated Insight to Evaluate an Investment

BIO: Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally.STORY: In 2012, Jeremy bought Tesla for about $2 a share and sold it eight months later for 50% more. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was of mediocre quality initially.LEARNING: Use differentiated insight to evaluate an investment. When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is. “My mistake was not having any insight into the business other than why I think the OEM contracts made this business look relatively cheap.”Jeremy Deal Guest profileJeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally. The fund makes multi-year investments in companies with substantial unrecognized earnings potential. Fund investment criteria are rooted in four basic tenets around business quality.Worst investment everIn 2012, Jeremy bought Tesla for roughly what would be about $2 a share today and sold it eight months later for 50% more. Looking back, Jeremy sold what would today be worth around $100 million for less than a million dollars.Jeremy didn’t understand how bad the competition was for Tesla at the time. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was mediocre to low quality initially and was falling apart.Lessons learnedUse differentiated insight to evaluate an investment.When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.Parting words “When you think about a business over multiple years, consider the intangibles. Think about the competitive advantage of the business and its ability to evolve. Think about the disruption risk in the business you’re competing with.”Jeremy Deal [spp-transcript] Connect with Jeremy DealLinkedInWebsiteBook recommendationAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master Class