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Fourth Quarter 2018 Letter: Race to 100x

Click here to read our brief 4.25-pager letter to investors reviewing the past year as well as the year ahead.

Speed Read:

  • We had a frustrating fourth quarter and ended the year flat. We outline major contributors to alpha;
  • In order to alleviate our capacity constraints on our pipeline of opportunities, Chris Torino joined the group in the quarter – his first new position is already in the portfolio;
  • Brief outline of a new investment in Criteo;
  • We provide an example of where we ignored the expectations gap and three where we managed these gap changes well;
  • We’ve updated our ranking framework with two new criteria and two new process interventions to prevent mistakes made in the year from recurring;
  • In a race to generate returns of 100x as soon as possible, we will never optimize for size and only performance, which is why we closed our Founders’ class. Our portfolio’s risk-reward, quality, and expectations gap have never been better;
  • We are particularly excited 2019 will be the first year we add gamma to our portfolio through our coinvestment.

Fourth 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 7 Comments

  1. Hi Steven,

    Did you reanalyze TI as other names in your portfolio?. It looks like more drama and cut guidance will not be good for alpha.


    1. Hey there – yes we have and did revise lower our objectives for the upside potential – but not by a material amount. We cut the position in half in December because the expectations gap once again narrowed very considerably. Vivendi trying to re-assert its influence could delay an agreement to separate the network and we believe the market is missing this. Now with expectations reset, and Gubitosi having a heavy incentive to promise the moon over the next 3-year plan (in order to keep his job and try to convince investors), we will be looking to repurchase our shares once our 30-day waiting period ends (in order to keep the tax loss sale).

  2. Dear Stevan
    I am an accredited investor and I have read of you on Valuewalk.
    I would like to receive more information on your fund and your company, if possible in the form of a presentation.
    Thank you.
    Best regards.

  3. What is your take on recent drop of CRTO due to Google ad tool changes? The ad tool changes are very disruptive to CRTO business model, right? Thanks

    1. Hey Dee – as we communicated to our investors, the risk-reward changed dramatically with the Google scoop last Friday so we preferred to sell our position and wait on the sidelines. Certainly getting more interesting at current levels, but would prefer to let a bit of dust settle first. Good luck.

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