🎙️Interview Shreekkanth Viswanathan
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Do you know Shreekkanth Viswanathan?
He’s a great quality investor who founded SVN Capital in 2020.
Some of his positions? Heico, Hermès, Old Dominion Freight, KKR, and Dino Polska.
Shreekkanth ("Shree") Viswanathan is the founder of SVN Capital. After growing up in Chennai (then called Madras) in South India, he came to the US to pursue graduate studies in Accounting. Shree founded SVN Capital Fund in 2020, managing a concentrated, global equity portfolio.
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🎙️ Interview Shreekkanth Viswanathan
Compounding Quality: Nice to meet you, Shree. How would you define yourself as an investor?
Shreekkanth Viswanathan: I would describe myself as a quality investor.
However, I don’t like these predefined definitions in general. Many people would describe Benjamin Graham as a value investor and Terry Smith as a quality investor...
… But in the end, all intelligent investing is value investing: you try to buy companies for less than what they are worth. And that’s exactly what I try to do as well.
Compounding Quality: What is quality according to you?
Shreekkanth Viswanathan: To me, quality falls into two buckets:
Qualitative: think about the company’s moat and management team
Quantitative: the fundamentals of the business
As a quality investor, I only want to invest in companies with a sustainable competitive advantage or moat.
Furthermore, I want these companies to have plenty of reinvestment opportunities.
Companies with a moat that can reinvest all their free cash flow in future growth are quite rare. It’s the golden goose for investors. Today, I own 2 companies that can reinvest all their free cash flow in organic growth: Copart and Dino Polska.
Compounding Quality: How would you define your investment process?
Shreekkanth Viswanathan: I always ask myself four questions before I even consider investing in a company.
Is it a business I understand?
Is it a high-quality business, defined qualitatively and quantitatively?
Is the company run by honest and competent managers with skin in the game?"
Is it available at reasonable valuation levels?
All four criteria should be met before I consider investing in a business.
Compounding Quality: What’s the best investment decision you’ve ever made?
Shreekkanth Viswanathan: My best investment ever is probably the Polish company Dino Polska.
Dino Polska focuses on offering a wide range of grocery and non-food products from stores in rural and small towns of Poland. The company has skin in the game as the founder Tomasz Biernacki still owns more than 50% of the business.
And what makes it even more unique is that Dino Polska reinvests all its free cash flow in future growth.
Currently, Dino Polska has around 2,400 stores and I think they can grow to around 5,300 stores in Poland. This means the company can roughly double in size from today’s levels.
Compounding Quality: What’s the worst investment decision you’ve ever made?
Shreekkanth Viswanathan: During my career, I made plenty of terrible investment mistakes.
The most important lesson is that my worst mistakes have always been mistakes of omission (the stocks I didn’t buy while I knew they were great businesses).
Back in 1993, Willis Johnson (the founder of Copart) made the strategic decision to own the land on which they built their junkyards instead of leasing it.
And guess when I was looking at the company? Amid the Financial Crisis in 2008 when Copart was trading at $1.6 per share.
Everything related to real estate suffered during the Financial Crisis and this was not different for Copart. While I knew that Copart was trading at very cheap valuation levels back then, I did not buy the company.
Fast forward to today and Copart is trading at $48.5. I would have 30x’ed my money when I would have bought this excellent Owner-Operator company.
Luckily, I got the opportunity to correct my mistake in 2020 during the COVID crisis.
I think that Copart will continue to do well in the years to come.
Compounding Quality: What’s an important characteristic great investors should have?
Shreekkanth Viswanathan: Don’t trade too much. Costs harm your investment results.
In the excellent book The Money Game, Adam Smith states that the first thing you need to know is yourself. I couldn’t agree more. Know yourself as an investor and watch yourself like an observer.
Act like an investor, and not as a speculator. I try to select a few high-quality businesses and remain invested in them for a very long time.
Compounding Quality: If you were obliged to invest all your investable assets with one person and couldn’t choose Warren Buffett, who would you pick?
Shreekkanth Viswanathan: That’s an easy question for me. I’d invest all my money with Chris Mayer from Woodlock House Family Capital.
Chris is a great friend of mine and we almost talk daily. We have the same investment philosophy as we both try to invest in great companies with skin in the game.
Here’s what Chris Mayer’s portfolio looks like:
We already interviewed Chris Mayer in the past. You can read the interview here.
Compounding Quality: Which books would you recommend to our readers?
Shreekkanth Viswanathan: I love to read. Here are some books I think your audience will enjoy:
The Inner Game of Tennis by Timothy Gallwey
Replace the word ‘tennis’ with investing and you’ll get some great insights
Factfullness by Hans Rosling
Working from Robert Caro
The Mind of Wall Street by Leon Levy
PS Did you know that Compounding Quality will publish the book ‘The Art Of Quality Investing’ on the 1st of May? Sign up here and make sure you don’t miss out:
Compounding Quality: Thank you very much, Shree. It was an honor to have you.
Shreekkanth Viswanathan: The honor was all mine.
Shree’s Portfolio
Shree has a lot of great quality businesses with skin in the game in his Portfolio.
Think about Heico, Hermès, Old Dominion Freight, KKR, and Dino Polska.
Soon, we’ll analyze some of the businesses he owns.
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Email any questions to compoundingquality@gmail.com.
Pieter (Compounding Quality)
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Finchat: Financial data
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