At Polen Capital, continuous learning is a way of life. We believe that intellectual curiosity and humility are essential traits of lifelong learners and successful investors. Here, our Small Company Growth investment team shares what they have been learning together so far this year and what they plan to read over the summer.
The Nomad Investment Partnership Letters
During the first half of 2023, the Small Company Growth Team studied the Nomad Investment Partnership, which produced one of the most outstanding track records in the history of investing. We read 25 investor letters by Nick Sleep and Qais Zakaria from September 2001 through the end of 2013, at which point the pair retired to pursue charitable causes.1 Over that stretch, they returned to their investors approximately ten times the original capital invested with them in 2001. The letters document their thinking across diverse market environments, including the Global Financial Crisis2, and demonstrate a deep understanding of the attributes required to generate long-term returns.
Across six sessions, we discussed our interpretations of Nomad’s views on business quality, behavioral biases, and the investment management industry. We challenged ourselves to seek areas where we could improve our investment process. While there are clear differences between the Nomad and Polen approaches, we also found many similarities. We aim to uncover the highest-quality businesses in the global small-cap universe that we can hold for many years. The readings left our team with improved frameworks to analyze business models and an even greater appreciation for the behavioral biases that can impact our decision-making.
The trick, it seems to us, if one is to be a successful long-term investor, is to recognize the sources of enduring business success, get in early and own enough to make a difference.
The Small Company Growth Team’s Summer Reading Picks
Explore the top ten books our team members are reading over the next few months.
Think Again: The Power of Knowing What You Don’t Know
by Adam Grant
Grant examines the critical art of rethinking: learning to question your opinions and open other people’s minds, which can position you for excellence at work and wisdom in life.
Influence: The Psychology of Persuasion
by Robert B. Cialdini
Using memorable stories and relatable examples, Cialdini explains the psychology of why people say yes and how to apply these insights ethically in business and everyday settings.
The Human Cosmos: Civilization and the Stars
by Jo Marchant
Marchant charts the history of humanity’s fascination with the night sky. She explores the way the stars have shaped art, faith, science, and society, and what our modern disconnect from the stars has cost us.
Alchemy: The Surprising Power of Ideas that Don’t Make Sense
by Rory Sutherland
Sutherland blends cutting-edge behavioral science, jaw-dropping stories, and a touch of branding magic to explain why the big problems we face might well be solved by letting go of logic and embracing the irrational.
Humble Inquiry: The Gentle Art of Asking Instead of Telling
by Edgar H. Schien and Peter A. Schien
This worldwide bestseller offers simple guidance for building the kind of open and trusting relationships vital for tackling global systemic challenges and developing adaptive, innovative organizations.
The Kissing Bug: A True Story of a Family, an Insect, and a Nation’s Neglect of a Deadly Disease
by Daisy Hernández
A riveting and nuanced investigation into racial politics and for-profit healthcare in the United States, The Kissing Bug reveals the intimate history of a marginalized disease and connects us to the lives at the center of it all.
Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration
by Ed Catmull
Creativity, Inc. is a manual for anyone who strives for originality. It dives into the nerve center of Pixar Animation—into the meetings, postmortems, and “Braintrust” sessions where some of the most successful films in history are made.
Quit: The Power of Knowing When to Walk Away
by Annie Duke
Drawing on stories from elite athletes, company founders, and top entertainers, Duke explains why quitting is integral to success, and shares strategies that will save you time, energy, and money.
Spineless: The Science of Jellyfish and the Art of Growing a Backbone
by Juli Berwald
Gracefully blending personal memoir with crystal-clear distillations of science, Spineless is the story of how Berwald learned to navigate and ultimately embrace her ambition, her curiosity, and her passion for the natural world.
Discipline Is Destiny: The Power of Self-Control
by Ryan Holiday
To master anything, we must first master our emotions, thoughts, and actions. Through engaging historical examples, Holiday teaches the power of self-discipline and balance, and warns against the perils of extravagance and hedonism.
1 The full collection of Nomad Investment Partnership letters is available here: https://igyfoundation.org.uk/wp-content/uploads/2021/03/Full_Collection_Nomad_Letters_.pdf
2 The Global Financial Crisis was a period of extreme stress in global financial markets and banking systems between mid-2007 and early 2009. During this period, the S&P 500 peaked in Oct-2007 and bottomed in March 2009.
This information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of March 2023 may involve a number of assumptions and estimates which are not guaranteed and are subject to change without notice or update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. This document does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction.
The information in this document has been prepared without taking into account individual objectives, financial situations or needs. It should not be relied upon as a substitute for financial or other specialist advice. This document is provided on a confidential basis for informational purposes only and may not be reproduced in any form or transmitted to any person without authorization from Polen Capital.