Interview #75 : James Hollier (Silver Beech Capital)
Long-only high-conviction investors
For this issue we have the pleasure of interviewing James Hollier from Silver Beech Capital.
Silver Beech is a New York-based investment manager with a fundamental, intrinsic value-based approach to investing in publicly traded North American companies.
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Hi James, thanks so much for taking the time to do this interview.
Can you please tell readers about your background, and how you got involved in investing?
Jon, thank you for inviting me to participate in the Capital Employed newsletter. I have really enjoyed reading your manager interviews and listening to your podcast.
I live in New York, but I am originally from New Zealand. I came to the United States for college and have been here since then. I enjoyed an American liberal arts education where I also met my wife, made great friends, and was lucky to get a job in private equity at Morgan Stanley after graduating.
I’ve wanted to be an investor since I was 13 years old. One day in the library I randomly picked up Roger Lowenstein’s biography Buffett: The Making of an American Capitalist. Lowenstein is a beautiful writer and Buffett is an interesting fellow to write about and I was hooked.
The art of value investing immediately appealed to me because its foundational concepts are timeless: (1) common stocks represent fractional interests in businesses; (2) owners of common stock are therefore business owners, not paper shufflers; and (3), the value of a common stock is determined by the cash flow that the business will send back to its owners in the future.
After Lowenstein, I read and watched all the investing guides I could get my hands on.
Today, I particularly admire Joel Greenblatt’s writing and teaching notes, and a video of Li Lu teaching a class at Columbia Business School that is on YouTube.
Recently, Todd Combs also wrote an extremely thoughtful section in the new edition of Security Analysis that I really liked.
You launched Silver Beech Capital LP at the beginning of the year, congratulations.
What was the process like of setting up a fund, what is straightforward or difficult?
And what advice would you give others who aspire to launch their own investment business?
Thank you. Yes, my business partner, James Kovacs, and I launched Silver Beech in January 2023.
From an organizational, legal, and administrative perspective, setting up Silver Beech required a few months of hard work. These are not the most complex tasks, but it is important to get them right to build a robust foundation for the investment business.
From an investing perspective, I have been working on setting up Silver Beech since I first read Lowenstein’s Buffett biography at 13 years old and realized I wanted to be an investor.
In preparation for that goal, I have spent over a decade personally and professionally investing. Before starting Silver Beech, I had investing roles at Morgan Stanley and TPG, but truthfully, I think the best investors are self-taught.
I think being a self-taught investor probably means you enjoy the challenge of investing more than the money. Investing requires “hard skills” like accounting, business analysis, and valuation analysis, but I also think the sort of investing that I practice requires “soft skills” like patience and introspection.
An anecdote I like about starting out is when Bill Ackman asked Richard Rainewater whether he should start a fund. Ackman was pretty young having just graduated from business school. Rainewater responded “You don’t have to be old to be right.”