Welcome to another edition of Guru Gems, where I study the world’s long‑term investing masters.
In today’s deep-dive:
Guru in the spotlight: Bryan Lawrence
The Lawrence Method unpacked
A closer look at Interactive Brokers and Lennar Corp
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Guru in the spotlight: Bryan Lawrence
Bryan Lawrence is a very successful investor who runs Oakcliff Capital, which he founded in 2004 with a clear vision: build a concentrated portfolio of exceptional businesses and hold them for the long term.
He's proven that focused, patient investing can generate exceptional returns: he has outperformed the S&P 500 by a wide margin since inception of his fund.
What is also impressive, is his alignment with investors: a significant amount of the capital managed by Oakcliff, is his own.
There are very few interviews available with Bryan Lawrence, but the ones I was able to find are of very high quality.
Here is a brilliant presentation he gave in Oct 2021 titled ‘A Stock Picker’s Two Challenges’
There are also two interviews on The Investor’s Podcast Network that I have linked to in the sections below.
The Lawrence method
Oakcliff’s strategy is to invest in great businesses at attractive valuations. To find those investments they will ask themselves a few questions about each business they look at:
1/ Is this a business we understand?
2/ Is it a good business with durable cash flows?
3/ Is it run by a management team that thinks like shareholders?
4/ Is it cheap?
5/ Why is it cheap?
6/ If we’re wrong, how much money will we lose?
Here is Bryan Lawrence sharing more details on each of these questions (this piece starts around 1:16:45 but the whole interview is worth listening to):
“What’s interesting to me is that there are not that many good ideas. And so necessarily this requires a concentrated portfolio because I don’t have an idea like this every six weeks. You may see us do nothing for a year.”
Oakcliff Capital portfolio
Here is an overview of the Oakcliff Capital portfolio on 31 March 2025:
With just 10 positions, this is a very concentrated portfolio.
The largest position is Interactive Brokers, a company they have had in portfolio since 2017.
They also have a 10% position in Alphabet, a company we find back in many Superinvestors’ portfolios as we’ve discussed before:
With the exception of Alphabet, none of the other stocks appear in the portfolios of the long-term gurus covered so far, so I am going to take a closer look at Lawrence’s largest position and his only new position in Q1.
I will use Lawrence’s framework to briefly analyze these two stocks:
1. Interactive Brokers Group Inc. (IBKR)
Interactive Brokers is a leading global electronic brokerage firm serving active traders, institutional investors, and hedge funds. It offers low-cost trading across a wide range of asset classes in over 150 markets worldwide.
1/ Business We Understand: ✅
IBKR operates a transactional brokerage model with clear revenue drivers: commissions, interest income on client balances, and technology services.
2/ Good Business with Durable Cash Flows: ✅
Highly scalable platform with recurring fee and interest income. Its low-cost edge and global footprint help sustain durable margins across market cycles.
3/ Shareholder-Aligned Management: ✅
Founder Thomas Peterffy remains involved and holds a large equity stake. The company emphasizes long-term growth over short-term metrics.
4/ Is it Cheap? ❔
Trades at a forward P/E in the mid-teens with strong returns on equity and cash generation. Potentially undervalued relative to its quality.
Elements to watch out for:
Competitive pricing pressures from newer fintech platforms.
Revenue exposure to volatile trading volumes and rate cycles.
2. Lennar Corp. (LEN)
Lennar is one of the largest U.S. homebuilders, operating across multiple states and catering primarily to first-time and move-up buyers.
1/ Business We Understand: ✅
Straightforward homebuilding model, with clearly identifiable revenue and cost drivers.
2/ Good Business with Durable Cash Flows: ⚠️
Cyclical by nature. While Lennar has become more capital-efficient, its cash flows are heavily tied to the housing cycle and interest rate environment.
3/ Shareholder-Aligned Management: ✅
Management emphasizes returns on capital and returning capital to shareholders through buybacks.
4/ Is it Cheap? ⚠️
While it trades at a low P/E, it is not obviously cheap given the macro uncertainty.
Elements to watch out for:
Interest rate sensitivity impacts affordability and new orders.
Exposure to cyclical swings in housing and labor/material cost inflation.
To buy or not to buy
I have decided to add these 2 stocks to my watchlist for the following reasons:
At first sight, these look like high quality companies;
However, I haven’t been able to do enough research yet on these stocks;
And lastly, there are currently no other Gurus I am yet familiar with who own these stocks.
With more research, also on the valuation side, and potential interest from other Gurus, I might eventually add these stocks to the Guru Gems portfolio.
That's it for this week's edition! As always, thank you for reading and following along on this journey.
I’ll be back next week with a monthly portfolio update.
Until next week!