Episode 08Haren Bhakta, CFA

Haren Bhakta, CFA

Why the S&P Buys More of a Company After Its Founder Dies

Episode 08
About the Guest

Haren Bhakta, CFA.

Founder and CEO of Inside Ownership Index (OWN), built on the idea that companies with deep insider ownership outperform the market. A CFA charterholder who previously led product at Dapper Labs (NBA Top Shot, Flow blockchain).

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Key moments

1:58 The Berkshire meeting that sparked an ETFSitting at Warren Buffett's first meeting without Charlie Munger, the founder feared what happens to Berkshire when Buffett dies. 3:25 Why the S&P buys more of a stock as founders leaveFree-float adjusting means index funds buy MORE of a company after its owner-operator retires, sells, or dies—backwards from what investors should want. 10:30 IBM's fall: proof leadership departure kills dominanceIBM was 2.5x larger than its nearest competitor in 1984, but fell out of the top 10 within eight years of its owner-chairman retiring. 10:53 How ownership data was built from scratchNo data provider had insider ownership history, so he manually aggregated data from 20,000 proxy filings across 20 years of S&P 500 companies. 15:00 The 100-bagger secret: 19 of 21 shared one traitStudying every stock that returned 100x since 2000, 19 of 21 had insider ownership above 5% before their massive run-up. 19:36 Zoo lion vs. wild lion: the CEO metaphorA hired 'zoo lion' CEO gets paid regardless of performance, while an owner-operator 'wild lion' feels the pain of mistakes directly.