👋Hello from the home office. No housekeeping today, so let’s get right into it.
Before we get started…
This article will do a lot of looking back. And it’s easy to say all of this was obvious in hindsight.
- In every annual report, companies state their future intentions (i.e. their future business plans).
- It’s our job as investors to assign a likelihood to those intentions. And figure out one, if they are realistic. And two, if they are realistic, why this company — and not their competitors — is in the best position to execute on those intentions.
💡The light bulb moment
I first heard the term “Apex Mountain” from The Rewatchables; a Ringer podcast. The podcast does deep dives on movies they deem “rewatchable.”
You know, those movies that suck you in when you’re flipping through channels. Movies that you can watch over and over.
They break up the podcast into different categories. Like most rewatchable scene, what’s aged the best, and is this an actor or director’s Apex Mountain? Meaning, is this their best work, the peak of their powers?
For example: Is Vince Vaughn’s Apex Mountain Old School or Wedding Crashers? I lean Wedding Crashers, but many would say Old School.
It got me thinking…
How could we apply the “Apex Mountain” framework to investing?
Most companies, whether young or mature, probably had one product that got them to where they are today. But will that same product lead their next leg up in market cap? Will it remain their Apex Mountain?