Market Timing Strategy

Andrew Wilkinson shares his investment philosophy, heavily influenced by Henry Singleton's approach to capital allocation and market timing. He emphasizes the importance of being patient and strategic with investments, particularly during overvalued markets.

• Market Timing Strategy:

  • Buy when markets are undervalued
  • Issue/sell stock when markets are overvalued
  • Buy back company stock during undervalued periods

• Current Market Perspective (as of recording):

  • Describes it as a "crazy sellers market"
  • Seeing "absolutely insane" valuations in venture capital
  • First-time founders raising at $40M pre-money valuations
  • Most investments are "bid up like crazy"

• Investment Response to Overvalued Markets:

  • Sitting on hands and waiting for opportunities
  • Building up cash
  • Looking for "hidden value" in companies
  • Getting creative with M&A using stock
  • Focusing on bolt-on acquisitions

• Managing Inactivity During Waiting Periods:

  • Distracts himself with small "hobby businesses"
  • Invests $10-20K in small projects
  • Previously used sports and social activities pre-COVID
  • Uses these activities to avoid making impulsive larger investments

• Personal Investment Example:

  • Invested $5M in Bill Ackman's holding company
  • Bought when stock was trading at $0.65 on the dollar
  • Investment tripled in value over 5-6 years
  • Focused on blue-chip businesses (Lowe's, Howard Hughes Corp, Chipotle)

• Investment Philosophy:

  • Values capital allocation skills over pure innovation
  • Looks for opportunities in niche, technical fields
  • Seeks dominant market positions
  • Emphasizes patience and timing over constant activity