Clay talks with Joseph Shaposhnik about his new ETF, Rainwater Equity (RW), launched on June 18th, 2025. The fund targets recurring revenue businesses and aims for above-average capital growth. Joseph's previous fund had a 16.7% return since 2015, surpassing the S&P 500. Learn more about Rainwater Equity: https://rainwateretf.com What you'll learn here: 00:00:00 - Intro 00:01:08 - Meeting with Peter Lynch 00:02:49 - Lynch's wide investment spectrum: small caps, turnarounds, and growth 00:05:18 - Restaurant investing with Peter Lynch: Korean BBQ and Mediterranean food 00:07:14 - Lynch's contrarian view: investing before fundamentals turn 00:09:10 - Why IPOs are overlooked goldmines 00:11:30 - Why Joseph left TCW despite top-tier performance 00:12:30 - How benchmark obsession leads to underperformance 00:14:48 - The Nvidia case: Why forecasting is so hard even for insiders 00:17:20 - Why most investors overlook the importance of management 00:19:23 - Tax drag and performance erosion in mutual funds vs. ETFs 00:25:01 - The story behind Bill Miller's cornerstone investment in RW 00:27:34 - Why recurring revenue is the ultimate business model 00:32:30 - The 'magic' trio: recurring revenue, aligned incentives, smart reinvestment 00:33:51 - 50% of all stocks underperform, how RW avoids blow-ups 00:37:59 - Recurring revenue isn't boring: Broadcom, AI, and global growth potential 00:40:10 - Do any of the Magnificent Seven fit the RW strategy? 00:42:02 - AI adoption, Google's threat, and why Broadcom fits 00:44:43 - What RW doesn't do: no market timing, no performance fees, no benchmark hugging 00:46:52 - Addressing valuation concerns with a real-world Constellation Software case 00:52:21 - Joseph’s top stock pick for the next 20 years 00:58:13 - Why recurring revenue businesses are more resilient in an uncertain macro environment 01:00:10 - Aerospace aftermarket thesis: Loar, TransDigm, Heico 01:05:42 - Why the ETF structure is superior for investors 01:08:31 - Why RW has a 20-stock portfolio and how they size positions 01:10:48 - Key differences between RW and Joseph's TCW fund 01:13:10 - Learn more about the Rainwater Equity ETF Transcript & Guest Info: https://www.theinvestorspodcast.com/episodes/owning-best-in-class-businesses-w-joseph-shaposhnik/ Join our highly vetted community of value investors: https://www.theinvestorspodcast.com/mastermind/ 🤝 Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here: https://www.theinvestorspodcast.com/summit 💎 Explore a new business weekly and decide if it deserves a spot in your portfolio. https://www.theinvestorspodcast.com/intrinsic-value-podcast/ ▶️ Related Episodes: - Finding Certainty in an Uncertain World | Investing Excellence w/ Joseph Shaposhnik: https://youtu.be/yglw7oWw1t8 - Unconventional Wisdom From The Greatest Minds In Investing w/ Joseph Shaposhnik: https://youtu.be/xj5ESa0XTUU - Buying Exceptional Businesses & Ignoring the Noise w/ François Rochon: https://youtu.be/Me_mXNV3beI Listen to our episodes here: https://open.spotify.com/show/28RHOkXkuHuotUrkCdvlOP Visit our website: https://www.theinvestorspodcast.com/we-study-billionaires/ Free PDF: Investing for Beginners: 4 Principles of Stock-Picking: https://www.theinvestorspodcast.com/subscribe-youtube/ ⚠️ Disclaimer: This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting. #JosephShaposhnik, #ETF, #RainwaterEquity, #BestinClassBusinesses, #InvestmentStrategy