Rick Van Nostostrand is a Partner and Senior Portfolio Manager at Cornerstone Investment Partners. Cornerstone is an investment boutique in Atlanta, Georgia. The firm manages "mid $2Bn" across a number of value strategies. They have a qualitative approach with a quantitative model that guides them. See https://cornerstone-ip.com/.
Prior to Conerstone, Rick was a voting member of the investment committee at EARNEST Partners and served on the Fundamental Value product at Invesco Capital Management. Previously, he worked in management consulting where he served clients across industries at both McKinsey & Company and Accenture (the Anderson Consulting). Rick earned an MBA with a concentration in Finance from Wharton (U Penn), and holds a Bachelor of Science in Computer Science Engineering from Southern Methodist University.
This conversation covers:
~2:30 - Rick's Background
~3:53 - His consulting career at Accenture and McKinsey
~7:11 - College businesses, one of which could have been quite successful if Amazon existed
~13:57 - The theory that in the real world prices and value are seldom aligned
~ 16:23 - Need to develop an investment process and Cornerstone's philosophy
~ 22:21 - What Cornerstone's model told them about Microsoft that the market missed
~ 24:08 - Looking for high quality companies building value over time
~ 26:21 - ESG discussion
~29:36 - Risk subsidies driving valuation
~32:31 - Indexes and how they impact investment results and the market
~37:00 - What happened to certain stocks after the 1999 bubble burst
~38:00 - Investing in the late 90s
~43:00 - Buying the dip may not work forever
~45:00 - Avoiding financials in 2009
~50:50 - Real option theory in valuation
~54:05 - Where Wells Fargo erred in remediation
~ 57:19 - Why Citigroup was a palatable turnaround investment
~1:01:00 - The benefit of investing with a team
~ 1:05:00 - Avoiding groupthink as a team
~1:07:00 - How to have investment teams function well
~1:14:00 - Building teams to last and culture
~1:19:00 - Miscellaneous discussion