Oct 26, 2026 · 44 min
Warren Robertson hunts durable earnings as markets grow expensive
Searching for predictability in an unpredictable market with Warryn Robertson
The episode examines how investors can distinguish genuinely resilient businesses from attractive stories when inflation, AI and valuation pressure challenge predictability.
- 1Predictable earnings depend on durable advantages, contractual protections and the ability to pass rising costs through.
- 2Infrastructure and franchise businesses can look ordinary yet retain powerful economic characteristics, from towers and Visa to H&R Block.
- 3Share prices can lag business performance, making patience and conservative valuation discipline central to investing through disappointment.
Don't miss
Robertson explains why H&R Block’s scale, seasonal workforce and highly variable cost base may support more resilient earnings than its ordinary image suggests.
The brief
Warren Robertson frames investing around a deceptively difficult question: which businesses can keep producing predictable earnings as markets become more volatile, expensive and vulnerable to disruption?
His infrastructure lens extends beyond physical assets. Communication towers, Visa and branded businesses can share the same appeal when regulation, scale or network effects protect earnings.
The discussion tests that framework against inflation, data centers, renewable energy, EV charging and waste facilities, where pricing power and contractual protections matter more than fashionable labels.
Robertson confronts underperformance through lottery holdings and the gap between business results and share prices, arguing that durable franchises can require patience before markets recognize them.
H&R Block becomes the clearest example: scale, seasonal labor and a variable-cost model may make this ordinary-looking business more resilient than investors assume.
What was said on this episode
42 statements · 24 positive · 14 negative · 1 mixed · 3 neutral
Investments that look too good to be true may be misleading or unsuitable.
“If it looks too good to be true, perhaps it is.”
Listen at 0:06
Inability to explain an investment role plainly is a warning sign for investors.
“If someone who's in my position and is doing the role that I'm doing cannot explain what it is that I do to a motor mechanic or a housewife, and they use a whole bunch of jumbo mumbo words and jargon to try and, I think, make themselves feel more important than who they are, I think that's the first red flag.”
Listen at 4:56
Some infrastructure assets generate predictable earnings and forecastable cash flows.
“there are certain assets within the infrastructure asset class which produce very predictable earnings, very forecastable cash flows, a beautiful return series.”
Listen at 8:07
Many preferred infrastructure assets have monopoly-like structures and inflation-linked returns.
“They're typically monopoly-like. They have inflation-linked returns either embedded in the regulatory arrangements or in the concession deeds or contractual terms that they have.”
Listen at 8:17
More predictable earnings and cash flows reduce investment decision difficulty.
“if I find assets that produce earnings and cash flows that are more easier to predict, that's half of my job made easy.”
Listen at 9:17
Concentrated portfolios of roughly 30–40 stocks are important.
“We'll own 30 to 40 stocks in both portfolios today because we think being concentrated is important.”
Listen at 11:07
Visa has infrastructure-like characteristics as a payment-system business.
“a great example of a non-infrastructure stock that is infrastructure-like is Visa”
Listen at 11:52
Visa is expected to deliver strong future earnings growth.
“we think good, strong earnings growth going into the future.”
Listen at 12:10
Visa produces an EBITDA margin of approximately 70%.
“it's one that produces a 70% EBITDA margin”
Listen at 12:37
Inflation will remain above central-bank target ranges for some time.
“you would see higher than target ranges for inflation that most central banks put out there for some time. It won't be forever, but it will be for some time.”
Listen at 13:46
Persistently elevated inflation benefits some infrastructure assets.
“that is a positive for a number of infrastructure assets.”
Listen at 13:56
Sharp US inflation increases are somewhat negative for US utilities.
“short, sharp jumps in inflation in the US are actually somewhat negative for US utilities”
Listen at 14:56
Data centers are too competitive for his infrastructure investment strategy.
“data centers no um too competitive”
Listen at 16:25
Data centers lack monopolistic characteristics.
“So it doesn't have monopolistic characteristics, so no.”
Listen at 16:52
Solar farms have uncertain investment suitability.
“For the solar farms, it's a question mark.”
Listen at 17:38
Some EV charging networks bear volume and price risk, making them unattractive investments.
“the ones that I have seen take both volume and price risk and therefore no.”
Listen at 17:46
Space infrastructure can be attractive when its economics are predictable.
“we do like space infrastructure”
Listen at 19:36
SES has long-term contracts, pricing power, and controls 75% of geostationary-orbit slots.
“SES, which is one that has good long-term contracts with governments, pay TV companies around the world, and some genuine pricing power, given it controls 75% of the slots in geostationary orbit, that's one that we do own.”
Listen at 19:49
Communication-tower stocks fell approximately two-thirds over three years.
“That sector, broadly speaking, over the last three years has fallen. by about two thirds in share price.”
Listen at 20:47
Three companies control nearly all US mobile-phone towers.
“there are basically three in the United States that control pretty much all of the mobile phone towers now.”
Listen at 21:28
Additional tower transmitters generate approximately 100% profit margins.
“So it's basically a 100% profit margin that drives straight to the bottom line.”
Listen at 21:54
Starlink complements rather than substitutes for terrestrial mobile towers and spectrum.
“Elon Musk himself has made those comments twice. over the last 18 months in various presentations. So he almost acknowledged that Starlink's a complement, not a substitute to the tower codes and the traditional terrestrial spectrum.”
Listen at 23:40
Communication-tower share prices have recently begun a dramatic recovery.
“we've seen those share prices start to turn around. dramatically in the last month and a half.”
Listen at 24:11
Anheuser-Busch is preferred to Heineken because of greater scale and profit per hectolitre.
“we prefer anheuser-busch over heineken not because the beer is any better because it's twice as big and it makes two times the amount of profit per hectolitre on the beer itself”
Listen at 26:54
Beer consumption is declining.
“beer is in decline.”
Listen at 27:59
Gen Z consumes less alcohol than previous generations.
“Gen Z is clearly consuming less than the generations before it.”
Listen at 28:11
Patient investors can be rewarded for holding durable franchise businesses long term.
“we think with the embedded quality of the franchise business that they have, those sources of... economic franchise to predictability burnings in the long run you are compensated for being patient”
Listen at 29:13
Patient investors can earn good returns over three to five years.
“you can hold that and move forward on the front foot to make good returns if you're patient over three to five years”
Listen at 29:45
Brightstar Lotteries and FDJ have continued growing revenue and earnings.
“These businesses have continued to do 2%, 3% revenue growth, 3%, 5% earnings growth, no problem whatsoever.”
Listen at 30:55
Brightstar Lotteries missed quarterly earnings only three times in ten years.
“if I take bright star lotteries for the last 10 years, it's only missed quarterly earnings three times. That's predictable.”
Listen at 31:23
Global equity markets remain expensive.
“We think markets are still genuinely expensive.”
Listen at 34:29
The portfolio currently holds relatively few stocks compared with its normal range.
“we're at the low end of the number of names that we would typically own.”
Listen at 35:03
Current market conditions offer limited opportunities for strong returns.
“there's limited opportunity to make good returns today.”
Listen at 35:19
Broad diversification is dangerous when some stocks are extremely expensive.
“today is fraught with a lot of danger because there are some genuinely very, very expensive stocks out there.”
Listen at 35:34
Concentrated holdings can be handsomely rewarded over three to five years.
“in on a three to five year view you will be handsomely rewarded”
Listen at 35:57
PayPal's uncertain future justified removing it from the investment universe.
“we just weren't confident about the future of it. So therefore, we removed it from our universe.”
Listen at 38:12
H&R Block has more US stores than Starbucks.
“There's actually more H&R Block stores than there are Starbucks in the United States.”
Listen at 39:00
H&R Block's entire cost base is variable.
“their entire cost base is variable.”
Listen at 39:13
H&R Block increased EPS 270% and dividends 200% over the stated period.
“It has increased earnings per share 270%. It has increased its dividend 200%.”
Listen at 40:00
H&R Block generates about $450 million annual free cash flow and returns capital to shareholders.
“It's a really strong little business that earns about $450 million in free cash flow a year and just buys back stock and pays a really nice dividend.”
Listen at 40:06
H&R Block's proprietary tax-return database may provide competitive advantage.
“that data-rich proprietary source of information, I think, is a competitive advantage for them.”
Listen at 42:06
H&R Block trades at roughly 7–9 times earnings and has no debt.
“it trades on seven, eight. Nine times earnings, got no debt.”
Listen at 42:18
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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