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First Quarter 2018 Letter: A Builder’s Approach to Public Markets

A Venture Capitalist 
A Private Equity
A Family 
A Founder

A Builder’s Approach to Public Markets

Our first quarter letter for 2018 explores how our approach to investing allows us to find assets that are systematically shunned by our peers, despite having very high-quality characteristics. Click here to read it.

Speed Read:

  • Our quarterly performance was decent (+8.7%) but we are not satisfied and have tweaked our portfolio to a very high aggregate risk-reward ratio;
  • Value-creation is similar to investing in that it requires a period of negative returns to generate future value. Very few public market investors are willing to underwrite value creation and we discuss the implications;
  • Our business builders-approach to public markets has given us a very uncrowded set of opportunities, often with the same attributes of a unicorn, but with highly attractive valuations;
  • We detail how our Coinvestment, TripAdvisor, Rolls-Royce, Bolloré and EXOR positions (well over half of our portfolio) are giving us outstanding businesses for either free or we are getting paid to take them.

First Quarter 2018 Letter to Investors


This article has been distributed for informational purposes only. Neither the information nor any opinions expressed constitute a recommendation to buy or sell the securities or assets mentioned, or to invest in any investment product or strategy related to such securities or assets. It is not intended to provide personal investment advice, and it does not take into account the specific investment objectives, financial situation or particular needs of any person or entity that may receive this article. Persons reading this article should seek professional financial advice regarding the appropriateness of investing in any securities or assets discussed in this article. The author’s opinions are subject to change without notice. Forecasts, estimates, and certain information contained herein are based upon proprietary research, and the information used in such process was obtained from publicly available sources. Information contained herein has been obtained from sources believed to be reliable, but such reliability is not guaranteed. Investment accounts managed by GreenWood Investors LLC and its affiliates may have a position in the securities or assets discussed in this article. GreenWood Investors LLC may re-evaluate its holdings in such positions and sell or cover certain positions without notice. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of GreenWood Investors LLC.

Past performance is no guarantee of future results.

This Post Has 3 Comments

  1. Hi Steven. I also think that the canadian housing market is at risk and maybe the peak of the cycle is already behind. I’m curious to know what you think about shorting the canadian banks to express that view?

    1. Hey Anthony! We included that analysis in our research, which we’re keeping just to our investors at this point given the sensitivity around the subject at hand. But we think there are limited book value impairments across the banking industry, which is how we looked at them as shorts – although the earnings will certainly be weakening. This is most likely to manifest in a substantially lower loony given interest rates are going to have to be lowered, rather than raised, so we’ve converted our Canadian dollars back to greenbacks. Hope that helps!

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