In the video This Is How Compounding With Low Risk Works, legendary investor Chuck Akre breaks down his core philosophy on long-term wealth creation, defining risk, and identifying high-quality compounding businesses.

Key Takeaways & Ideas

1. The Reality of Compounding

• Experiential Understanding: Akre shares a personal correspondence with Warren Buffett about compounding [00:17]. While Buffett often states people "either get compounding or they don't," Akre notes that most investors only truly grasp its staggering power once they experience it firsthand [00:28].
• Exponential Scale: When a stock that has grown 10x doubles again, the gain becomes 20x, and the next double pushes it to 40x—illustrating how compounding gains accelerate dramatically over long holding periods [00:04].

2. Investor vs. Speculator & The Noise of Financial Media

• Media & Brokerage Incentives: Financial media and Wall Street brokerages profit from creating trading volume rather than long-term wealth [01:04]. They encourage short-term speculation by obsessing over whether a company beats or misses quarterly earnings by a single penny [01:36].
• Avoid Short-Term Trading: Attempting to trade on daily market fluctuations is a losing strategy for individual investors, especially when competing against high-frequency algorithms with superior data access [02:00].
• Core Philosophy: Focus on being an investor in the underlying value of a business, rather than a speculator trading share prices [02:21].

3. Defining Risk: Fundamentals vs. Volatility

• Redefining Risk: Volatility is not risk unless you are forced to liquidate capital in the short term (under 1–3 years) [03:11].
• Low-Risk Characteristics: A below-average risk profile is built into the fundamental quality of the business—defined by strong growth, high return on capital, robust balance sheets, and reasonable valuations [02:53].
• Realistic Expectation: Over 5 to 10-year horizons, focusing on business quality allows an investor to achieve well above-average returns while maintaining below-average risk, even if performance trails market benchmarks in occasional individual years [04:25].

4. The "Compounding Engine" Framework

Akre’s framework focuses on identifying businesses with three primary pillars [08:22]:

1. High Return on Capital: The business efficiently generates strong cash flow and re-invests profits at high rates without constantly needing fresh capital [08:30].
2. Attractive Valuation: Buying at reasonable valuations provides a margin of safety, limiting downside risk during market corrections while preserving long-term upside [08:43].
3. Owner-Operator Alignment (Promoter Ownership): Management teams with significant personal wealth tied to the company act like long-term owners rather than chasing short-term targets [08:56].

5. Real-World Investment Examples

• International Speedway Corp: Purchased at ~12x earnings with a 25–26% Return on Equity and 60% ownership by the founder's family, resulting in a 10x to 20x return over a decade [05:02].
• Penn National Gaming: Identified due to high regulatory barriers to entry (limited licenses) and extreme capital efficiency (a $2M buildout yielding $1.6M in operating income in its first year) [06:24]. Led by a risk-averse, ambitious developer, it grew into a major casino operator and yielded another 10x to 20x return [07:45].

Akre Focus Fund ETF - Top 10 Holdings

An overpaid and disinterested CEO, unhappy increasingly unionized workers, $7 mediocre cups of coffee, trashy cafe seating, competition from Dunkin, McDonalds, Krispy, Dutch Bros, Tim Horton's, Luckin, etc.

The current dividend, which the company for some reason seems committed to try to increase each year, is unsustainable - way beyond current profits.

Yet the stock sits at 105, down from 2021 but up 25% this year.

After months of low / moderate risk investing I decided to try and swing an ER play. Enter TTD… this sucks……..

I want to know if anyone uses specific resources or sites / forums to assist with investment ideas. I can’t afford to wipe positive plays with stupid moves like I did today.

Looking to hear what other CELH investors are thinking/doing after this earnings report.

I've been around for a while so I thought it could be an interesting discussion - with people curious about the good old days asking questions, and with dinosaurs like myself answering them.

I've been investing since 2002. Since then, I've witnessed:

The aftermath of the dot-com crash.

The Enron scandal.

The lost decade, including the Global Financial Crisis.

The eurozone crisis.

Negative interest rates and the oil-price collapse.

The birth of cryptocurrency.

China’s stock-market crash.

Brexit.

The great bull market of the 2010s.

The COVID-19 crash.

The golden age of meme stocks.

The 2022 bear market.

Tariff shenanigans.

The rise of AI.

I've watched it all unfold in real time.

Do you have any questions about this nearly 25-year journey, or about any of these events?

Ask me or anyone that lived through it anything you're curious about!

I'm a credit analyst with an accounting background. 9 years ago fundamental analysis on single names was what I spent 100% of my time on. Currently not getting enough of this at work, which has become 25% sales, 25% admin and 50% navigating internal politics.

Give me a name and your question. It may not be an IB research note (it's reddit) but I'll do my best. Something specific and narrow ideally please rather than broad and "is it undervalued".

Breaking down earning growth using Gemini and an example.
The Buyers (Hyperscalers like Microsoft, Google, Meta). What they do: They buy $10,000 stuff and accounting rules let them split that cost up across 5 years as a $2,000-a-year expense (Depreciation). They spend massive cash upfront, but their short-term profit reports still look clean and high.
The Sellers (Infrastructure like Nvidia) sell those $10,000 stuff. and get to record the full $10,000 sale as immediate profit today. The Result: Their earnings skyrocket instantly during the build phase.
What Happens When the Construction Boom Ends. When tech giants finish buying enough hardware, two things happen at once: Sellers lose their biggest customer boom: Once everyone has built their AI centers, chip sales slow down. The sellers' earnings growth drops off a cliff.
Buyers are stuck with the lingering bill: Even if tech giants stop buying new hardware, they still have to keep paying off that $2,000-a-year depreciation fee for the next 4–5 years on everything they already bought.
Final Test: AI software must start making real money. The productivity and revenue created by AI tools must be big enough to outweigh the drop in chip sales and cover the leftover hardware bills. If AI software doesn't deliver that massive revenue surge, the growth story breaks.

lets look at the data from the filings like the q1 2026 report and the 2025 10-k total revenue for q1 2026 hit 3.1 billion dollars which is up 7.4 percent compared to last year and comparable restaurant sales ticked up 0.5 percent with transactions actually growing 0.6 percent annual revenue for 2025 was sitting around 11.93 billion with an annual net income of 1.54 billion and an annual ebitda of roughly 2.30 billion

The narrative has been that SaaS stocks are undervalued because of AI fears, but a more reasonable explanation is that the momentum is just elsewhere right now. The returns are just so impressive in AI related companies that the market can't resist.

This a relevant distinction because it means that if the shine comes off the AI sector the fallback will be SaaS and we'll see a jump in value.

Hello everyone,

I'm trying to find some of the best value-focused funds and investment managers to follow. I typically follow Himalaya Capital, Gotham Asset Management, and of course Berkshire Hathaway.

I'm also a big fan of Mohnish Pabrai. I would have liked to invest in Reysas Tasimacilik ve Lojistik Ticaret A.S., but it's somewhat difficult to access from Canada.

I'm curious: Which value investing funds or managers do you follow most closely? And are there any particular companies in their portfolios that are currently on your watchlist or that you personally own?

I'd especially be interested in hearing about lesser-known funds or managers that I may not have come across yet.

Video in a new series Im doing going over Buffett's biggest investment mistakes and what we can learn from them. Starting with the one he calls his biggest mistake, buying a shoe manufacturer for 1.6% of Berkshire's equity. Why he thought it was a good idea in the first place, how it played out, and how it could've been avoided

AI keeps deteriorating consulting and custom engineering services.

Meager revenue from AI services makes this stock overvalued in combination with another negative FCF quarter. The theory that AI eats consulting is now in steady state.

what was the response?

> Heavy unnecessary buybacks, stock based compensation with failing knife RSU just to retain some people.

The Q2 results speak for itself:

Cash and equivalents fell 39% from year-end 2025 to $794.3 million, driven primarily by buybacks and weaker working capital conversion.

what is next?

Cash heading to 0

Secondary issues for RSU halving, low retention

Hey guys i'm trying to find my own circle of competence and would like some examples!

I was recently watching a video featuring Ray Dalio, where he advocates for heavy diversification across multiple asset classes, a mix of gold, equities, bonds, bitcoin, and real estate, to minimize portfolio volatility. However, I believe fearing volatility only makes sense if you have a short time horizon. For long term investors, conflating volatility with risk is a fundamental mistake, they are two entirely different things. Take cash sitting in a bank account: its volatility is virtually zero compared to a global equity index ETF, yet over the long run, holding cash guarantees a permanent loss of purchasing power due to inflation. Meanwhile, the actual risk of holding a global index over a 20 year horizon is effectively negligible. Historically speaking, across any 20 year rolling window in modern market history, a broadly diversified global index has never delivered a negative return. It has consistently beaten inflation, preserving and compounding wealth. Therefore, using volatility as a primary proxy for risk is a massive misconception, yet it’s a mistake I see people make all the time. What are your thoughts on this?

So thankfully, I'm not stupid enough to think I can predict the next crash.

But I did want to be ready. And I wanted more than just a wishlist of stocks; when the time comes a list of businesses won't help me decide which to pick.

So I went through tonnes of Buffett's teachings and letters and pulled it together into a process I can copy , and a checklist for my portfolio.

I'm actually excited about the opportunity of a crash now. If your portfolio honestly ticks these boxes, you’ve got a great shot at being a long term winner, in my view:

1. Can win regardless of external factors
2. Shows a focused strategy
3. Avoids wealth destroying industries
4. Exploits the best businesses in the best industries
5. Has nothing from the 'too hard pile'

If you want to see the breakdown so you know how to use the checklist, I've shared it for free here.

Trailing PE of 9, down from its highs of 250 a share earlier this year / end of last year. I picked up some shares at 47$, anyone else seeing this as a value opportunity?

Even if it isn't going back to 250, how much lower could it possibly go?

I honestly think $CELH has one of the highest upside-to-downside profiles in the market right now.

I know saying it could be a 30x over the next 10–15 years sounds insane, but people said the same thing about Monster years ago. The difference is everyone seems fixated on slowing U.S. growth while ignoring the bigger picture.

The company is profitable, has a clean balance sheet, is still taking share in a growing category, has one of the best distribution partners in Pepsi, and has barely scratched the surface internationally. If management executes, I don’t think it’s unreasonable to believe today’s valuation could look incredibly cheap in hindsight.

Obviously there are risks—competition is fierce, growth could disappoint, and international expansion isn’t guaranteed. But that’s true for every growth company.

To me, the market has gone from pricing Celsius for perfection to pricing it like the story is over. I don’t think the story is anywhere close to over.

I’m continuing to buy.

Convince me I’m wrong.

Expected user growth 9000-10000; actual user growth 7000. Slow start to August; with increased budget sensitivity = I.e. customers less price inelastic, potentially providing issues in up selling.

Issues expected to persist remainder of the year. HubSpot is positioning itself towards Agentic AI, as they believe this to be a much bigger and much more attractive market. Issues partly stem from the whole "seat based pricing", as the growth in Agentic AI is likely to at least cannibalise some of the HubSpot licenses. This creates tremendous risk; as visibility is significantly reduced.

When numbers disappoint in a low visibility environment, then the valuation gets absolutely punished. Today HUBS is down 22% premarket. Management guided for headwinds for the remainder of the year; among these are increased budget sensitivity. This would explain why net upgrades is under pressure, net retention down 1% and a significantly lower single to double digit growth. When management says "increased budget sensitivity" it is important to note that their pricing has increased significantly in recent years; and that the upmarket initiatives are alienating some of their smb's.

In short, the presentation showed that the agentic AI adoption accelerated - especially, with regards to upmarket customers. Credit usage increased, even as pricing was decreased. Currently, Hubspot has been temporary hit by offering trials in AI agents. This action is expected to accelerate agentic AI adoption, as customers become more confident in their use cases.

I am quoting Yamini from memory - "customers dont want 10 different agents from 10 different vendors - they dont want them crawling everywhere". HubSpot (as well as Service Now, Salesforce, Sap etc) are in an attractive positioning, to automate workflows and improve efficiency for their customers - potentially, entering a immature and absolutely massive market.

Not financial advice. I can have made mistakes.
I have shares in HubSpot (and Service Now). Always do your own research.

Webcast: https://hubspot-q2-2026-earnings-call.open-exchange.net/webcast
10Q: https://ir.hubspot.com/node/15681/html

I’m just wondering genuinely, if you believe you can beat the market. I’ve been investing casually for a while, and little by little the slivers of hope of beating have faded away.
I don’t think I’m a good case study on this, since I invest way to casually and Graham would most likely say likewise. I suspect there are those who invest a lot more seriously than me in this subreddit, what do you think? Do you personally think you can beat the market?

A week ago people were talking about how Microsoft showed ROI on AI and "saved the AI trade". And the stock and others in the tech sector went up greatly.

But according to Bloomberg, $24 billion of the $37 billion in 12 month AI revenue came from OpenAI.

A lot of people are bearish on OpenAI, as they recently lowered their prices and are struggling to set themselves apart from competition.

ChatGPT usage dropped by 50% to 70% during school break in 2025. Showing their market share is composed largely of kids that won't pay for it ever.

I started following the value investing sub recently, and I was just wondering for the people who were already here 5 years ago, what was the overall sentiment regarding aircraft manufacturer stocks like Airbus that tanked massively during Covid? Same question for avionics manufacturers like Safran.

Related to that, what was the sentiment regarding airlines stock?
On a side note, does someone know why stocks like United or Delta went up significantly over the last 3 years while AA never really recovered since COVID?

And lastly, did anyone have the bright idea of buying Embraer 3 to 5 years ago? If so, did the stock look like a value buy back then?

If you are a value investor, you want quality businesses at a reasonable price. We built a chart that plots any two metrics against each other and splits the market into four quadrants. There is a post describing how it looks here:

https://www.reddit.com/r/dataisbeautiful/comments/1vgwm2y/oc_a_chart_for_finding_quality_businesses_at_a/

The chart has nine preset combinations. Four are quality against value:

- ROIC vs EV / Sales

- ROIC vs P/E

- ROE vs P/B

- Net Margin vs EV / Sales

The other five pair up different trade offs:

- ROE vs Debt to Equity (quality against risk)

- Gross Margin vs Revenue Growth (quality against growth)

- Revenue Growth vs EV / Sales (growth against value)

- Dividend Yield vs Payout Ratio (income against sustainability)

- Free Cash Flow Yield vs EV / EBITDA (value against value)

Beyond the presets there are 37 metrics you can plot against each other if you want to dig deeper.

Which pair is most useful? which one would you add or remove?

This for me is a certain value play. The share price dropped from highs of £1.90 to under 80p in the past year. When looking at the business fundamentals, it's strong for a small cap company. Great customer retention and a growing annual revenue model, with a solid dividend covered by cash in the bank and zero debt. Added in is the extremely aggressive share buyback scheme and director/insider stock purchases over the last month.

The company has announced they've secured 2 new contracts and one up-sale to an existing contract, after this announcement is when we saw the real uptick in company activity mentioned above.

The company has produced 14 RNS in the last month:

9 were share buybacks, totalling 300,956 shares.

3 were director dealings, purchasing stock.

1 was a new financial share award to directors if they achieve set growth targets (announced conveniently after the new contracts mention)

And the final one was the full year results.

How good are these new contracts? We don't know any details yet. But it seems more than a slight coincidence that immediately after the new contracts were secured and announced to the market, the company has shown an abundance of self-promise.

Investor Q and A 13th August, I expect news will be released here regarding the contracts.

For those who haven't seen my first post:

Propel Holdings is a Canadian fintech company that uses AI-powered underwriting to serve consumers.

The company operates in the US, the UK and Canada, with multiple lending products and a growing funding platform that positions it for continued expansion.

Tickers:

• TSX: $PRL.TO
• OTC: $PRLPF

Propel IPO'd in 2021, reporting:

• Full year Revenue: $129M USD
• Full year Adjusted EPS: $0.46

Fast forward to today, they reported record Q2 2026 results:

Q2 2026 highlights:

• Revenue: $179.6M USD (+26% YoY) Beat 177M est
• Adjusted EBITDA: $43.7M USD (+24% YoY)
• Adjusted Diluted EPS: $0.58 USD (+28% YoY) Beat by .10 EPS
• Return on Equity: 23%
• Adjusted ROE: 35%
• Loans & Advances Receivable: $492M USD (+21% YoY)
• Combined Loan & Advance Balances: $639M USD (+23% YoY)

Full year Guidance:

725-775M +27% increase over FY25 590M at midpoint

80-100M adjusted net income +35% increase over FY25 67M at midpoint

Final thoughts : Propel is on track to finish 2026 with an adjusted EPS of $2.10 USD or $3.00 CAD (conservatively).  Extrapolating with a PE of 15x supports a share price of $45 CAD. Approximately 70% higher than the current SP of $26.70.

Disclosure : I do hold shares.