One Trick Pony or Multi-Dimensional?

By: Yale Bock

When I was in high school in the 1980’s, my favorite football team was the San Diego Chargers. Whenever they scored a touchdown, this fabulous song would come over the loudspeakers and blare, “San Diego Superchargers, San Diego Superchargers,” and the mascot would run around the field in his loud, lightning-bolt team garb. The team scored quite often, and the song blared incessantly. Led by a small, tough Oregon quarterback named Dan Fouts and offense-minded coach Don Coryell, the team put together an incredible scoring machine. It had great wide receivers with John Jefferson, Wes Chandler, and Charlie Joyner. It had a superb tight end in Kellen Winslow. They had diverse and dynamic running backs with Chuck Muncie and James Brooks. They were exceedingly difficult to stop for many years. Defensively, they had talented players up front, with linemen like Gary ‘Big Hands’ Johnson, Fred Dean, and Louis Kelcher, so they could pressure the opposing quarterbacks pretty consistently. However, the linebackers were a touch undersized and slow, and the secondary, well, let’s just say that Swiss cheese had fewer holes. 

The Chargers put together many seasons with winning records and division championships, even reaching two conference finals. In one game, the weather was a jillion degrees below zero as they played the Cincinnati Bengals. The Bengals ran the ball down their throats and took a quick lead, and with the climate making passing impossible, well, the Chargers didn’t have much of a shot. The other Super Bowl possibility was played on their home field against the Oakland Raiders. Again, the Raiders ran and passed at will against a porous San Diego defense. The San Diego offense kept it respectable, but in the end, the Raiders had too much. The San Diego Chargers wound up going to the Super Bowl many years later, but never saw one under Don Coryell. I mention this because it has an impact on how I think about investing. 

In many ways, businesses are like teams. They each have leadership and possess strengths and weaknesses. In different team sports, there are examples of franchises and organizations that have had incredible success. You can think of the New England Patriots, San Francisco 49ers, Pittsburgh Steelers, and Denver Broncos in professional football. In professional basketball, the Chicago Bulls, Boston Celtics, and Los Angeles Lakers stand out. In college football, Alabama, Ohio State, USC, and a few other schools typically reign supreme. In college basketball, it is Duke, Connecticut, UCLA, Kentucky, and, years ago, Indiana, which earned championships on the hardwood. These teams had top-notch leadership with strong coaches and few weaknesses. Typically, there were many outstanding individual players who contributed on both offense and defense to help the team win. Very rarely, if ever, was a championship group dependent on one player or were one dimensional.

In applying this observation to investing, we are looking for unique situations by owning businesses with excellent management teams that have multiple aspects contributing to the business model. Often, the revenues are either transactional and/or recurring in nature. You can think of commercial and community banks, investment banks, payment and payroll processing firms, billers, custodians, cable and wireless companies, and a few quick service restaurants. Conversely, I am not interested in one-product companies or enterprises that are trendy or seasonal in nature. Many clothing- or fashion-related companies fall into this categorization. Energy and utility entities can fall into either group. When I use the term unique, there is typically something rare that the business possesses. It is their brand, intellectual property, broad distribution, or possibly the location of the assets it owns, like real estate-related holdings. Regardless, it has multiple revenue streams to contribute to growing the enterprise value, and they are advantaged relative to the competition. Like sports, business and investing is extremely competitive, and it is particularly challenging to sustain long periods of success. However, by choosing entities with advantages on multiple different business dimensions, it gives our investors a higher probability of success.

Originally posted on September 1, 2026 on Y H & C newsletter/ blog

DISCLOSURES

Y H & C Investments may have positions in companies mentioned in this newsletter. Nothing in the newsletter should be taken as an offer to buy or sell individual securities. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives.