Investment Strategies with Austin Root

“Set it and forget it may work for infomercials, but it will not work for your portfolio.”

-Austin Root, Chief Investment Officer at Stansberry Asset Management

Austin Root has one of the best pedigrees possible in investing: a Stanford MBA along with stints at Blackstone, SAC Capital, and funding from Julian Robertson. But he dishes insight that’s as applicable to a new investor as it is to a billionaire like Robertson was. 

In this can’t-miss interview, we talk about both strategic and tactical investment decisions – tactical being what investments to buy and when (topics that probably get 95% of the airtime in investing media), and strategic being decisions around asset allocation and asset location – factors that arguably have a great long-term impact on an investor’s portfolio. 

Austin’s role at SAM is to straddle both, and says that all investors share the following three goals across their investing lifetimes: 

  1. Capital appreciation
  2. Capital preservation
  3. Generating income 

We discuss Austin’s criteria for identifying great businesses, which include: 

  1. Attractive margin profiles
  2. Nice returns on invested capital 
  3. Durable franchises
  4. Businesses that will be more profitable a decade from now

Then we pivot to Austin’s thoughts on fixed income. He’s not holding a lot of AAA and AA-rated corporate bonds in his portfolios these days. Instead, he’s targeting three bond buckets:

  1. Short-term US Treasuries (for holding dry powder)
  2. “Busted” convertible bonds that almost certainly can’t convert, but which, by virtue of being overlooked, offer attractive return profiels
  3. Private credit

On the equity front, Austin prefers mid-caps, and mentions ball-bearing company Timkin (NYSE: TKR) as one holding. 

It seems nearly obligatory to ask an investor like Austin about AI these days, so I did. He shared his four-pronged AI approach: 

  1. LLM model companies (e.g., Microsoft, Google)
  2. Picks-and-shovels plays like Nvidia (as well as HVAC companies supplying data centers)
  3. Security firms and data aggregator/data analysis firms
  4. Companies holding and leveraging proprietary data 

My interview with Austin is a wide-ranging interview you don’t want to miss. Click here or below to watch it.


Investment Strategies with Austin Root

This article is for informational purposes only and is neither investment advice nor a solicitation to buy or sell securities. All investment involves inherent risks, including the total loss of principal, and past performance is not a guarantee of future results. Always conduct thorough research or consult with a financial expert before making any investment decisions. Neither the author nor BBAE has a position in any investment mentioned.

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