Hi Everyone,
This is just a quick update that I have decided to change the name of the Substack to “hurdle rate”. The reasoning behind this is because this substack extends beyond professional services and the name did not seem appropriate. This also allows for more unbound research where I could potentially cover companies on the fringes of my circle of competency rather than the middle.
If you have been aware of my substack in the past, you will notice that this is the same name as it was previously. In my process I have a strict application and belief of high and fixed hurdle rates as a strong correlation with performance. But I won’t let myself convince you, Mark Leonard of Constellation Software states the below from some selected investor questions in early 2019.
We’ve noticed that when we increase or drop the hurdle rate, all of the expected returns on our new acquisitions seem to increase or drop, respectively, in lock step with the new hurdle rates. We summarise this with the phrase “hurdle rates are magnetic”.
~ Mark Leonard
Obviously, Constellation has more control over their acquired companies, although this does not mean it is all for naught in regards to us as public market investors. We may only try our best to attempt to forecast relatively accurate scenarios. It helps to have an edge of some form, which as you’d realise I was trying to foster my edge in professional services, and still am.
Lastly, the schedule below still remains, the next write up will be on the 26th of March 2023 on a LSE Consulting firm. Further to that in the following week I will be releasing a deeper dive on an ASX Accounting firm. I expect these deeper dives to be ~5x the length of the one page stock pitches, or roughly 2,000-3,000 words.
Thank you for reading
Kind regards
Tristan
Catchy name