Savneet Singh - The Berkshire of Software

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_3** (0:59)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
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**Patrick O'Shaughnessy** (1:23)
My guest this week is another in a recent series of people that makes me want to work harder, learn more and do more for others. His name is Savneet Singh and he has already accomplished a remarkable amount in the worlds of business and investing. He's preferred to keep a bit of a low profile, but I'm hoping for everyone's sake to change that a little bit. So see the show notes for where you can read him and follow him.
Savneet has invested in unique things like Spanish real estate, famous startups like Uber, cryptocurrencies before they were cool, and even websites. He founded and built a fintech company. And now he is both a partner at the wide ranging investment firm CoVenture, with my previous guest Ali Hamed, and the co-founder of Tera Holdings, which is trying to become the Berkshire Hathaway of software companies. To say this conversation is wide ranging is an understatement. What's neat is that my favorite parts aren't even on investing, but are instead on principles for living.
Savneet is one of the best people I've met on this journey. I've had several other conversations with him with shockingly low overlap with the one you were about to hear, a testament to his active and curious mind. I hope you enjoy learning from him as much as I have. Okay, so Savneet, we are going to, like my conversation with your partner Ali, range all over the place, but we're going to talk about a lot of interesting investing ideas, investing philosophy, your personal story. I thought a fun place to start would be Spanish real estate. How you started thinking about that and what you did in that area?

**Savneet Singh** (2:46)
Sure, I should preface that I am not a real estate expert by any means, but I'd say a year and a half ago, two years ago, I and a couple of friends, we bought a condo in Barcelona. And our thesis was that rates were really low, still in Europe.
And Barcelona was one of the few cities that was still very close to the 2009 bottom, where every other city had rebounded. And it was really that simple. And we traveled around on a vacation, went across Europe, and realized two things. The first was the Airbnb trend was incredibly unappreciated. And what we meant by that was the ecosystem around it had just not developed, and people were underestimating just how large it would be. And so we said, hey, let's figure out what city has mispriced Airbnb the greatest, and in what city it's legal.
And we ended up in Barcelona. And there was this really interesting legislation that happened, where the government passed tourist license in Barcelona, where if a property had a tourist license, you could legally put it up for short-term rentals.
And what we discovered was a property with a tourist license only sold for 10% more than a property with that one, yet the yield was 2 to 3x the price. And so we said, hey, let's go, this is just a personal investment, let's go buy a property. And overnight, we got rid of the tenants left, we put it all on Airbnb, and the yield was amazing. And fast forward a year, I had left the job I was working at, and I said, you know, this is working out really well, let's go build a business around it. And so we raised a bit of money and started, and sort of became the distressed buyer of condos in Barcelona. And so I think if you talk to any of the brokers in the area, we are the fastest to move, we lock in interest rates at less than two and a half percent for 20 year fixed, and we are buying at replacement cost. And it's been amazing to sort of see a cash flow profile of business from broker, and the next day be able to flip it to two and a half times that by putting on a short term rental site.