Our investor letters are quick overviews of what we’re doing, how we’re evolving and how we are thinking about our opportunity set. Because we publish research on each individual security, those wanting a deeper dive in any name are encouraged to reach out to us for research access.
- We have re-allocated capital from behavioral graduates to those with more material improvement potential;
- There has rarely been a better time to allocate capital to Club Med & we are investing in companies with which we have built long relationships;
- We briefly discuss the profound transformations at our largest positions.
- Joining the board of CTT has been the honor of my career thus far;
- Most boards are very good at asking “why?” Our strategic discussions have instead often asked, “why not?”
- The combo of being both an investor & businessman is a winning one that we see in our results.
- With our focus shifting to offense at our 2 coinvestments, we made a defense mistake;
- Builders operate for the long-term and are more conscious than ESG;
- We discuss how we’re moving from Defense to Offense with great role models.
- We briefly discuss the psychological process of value creation;
- We evolved our framework to empathize with Mr. Market;
- We discuss why we love CTT and why customer satisfaction is the key to sustainability;
- We close by reflecting on the performance required for us to keep GreenWood alive.
- Reflections on differences between now & inception;
- Dissection of Covid-19 impacts, the indirect beneficiaries are the largest exposure we have;
- Discuss factor exposures & explain why we’re overweight Europe & smid cap;
- We end by detailing >¾ of exposure is driven by similar tailwinds as Big Tech.
- Perception Inflections are key to driving performance outside of just company fundamentals;
- Learning from a mistake this year, we’ve added a “Reflexivity Vulnerability” for every name;
- We’re putting a lot of time into ensuring CTT has first a fundamental then behavioral inflection point in the quarters ahead.
- Quarterly performance was driven by graduations in stock market narratives;
- We detail the very stark contrast in how we view CTT and how the market does;
- We explain why MSTR is a hedge against the worst-case scenario for value investors and what we’re doing to stay conservative in this circus market.
- We discuss our continued evolution encapsulated by new our tag lines, Global, Collaborative, Builders;
- We transformed a bureaucracy into an owner-operator this quarter;
- We discuss our roadmap for the year and why we are so excited.
- A new perspective on market irrationality and what we’re doing to benefit;
- Accelerating fundamental value growth is generating significant pent-up alpha;
- Hyperbolic discounting suggests the move should be strong when it comes.
- Dead money is a truism that is never true when skin in the game is involved (or Elkann);
- 2 business models encapsulated by a “pub” or “tourist” approach highlight longs and shorts in our portfolio;
- We recently shorted a “tourist” (BA) and repurchased a “pub” (LDO)
- Momentum in ETFs combines with terrible governance shifts that have been occurring;
- The intrinsic value of our portfolio grew faster than the fastest members of the S&P 500. The margin of safety and discount to this fair value widened considerably;
- We’ve continued to make process improvements detailed herein.
- Our Builder’s approach to public markets gives us uncrowded high-quality opportunities;
- Very few public market investors are willing to underwrite value creation;
- We own better businesses than their unicorn competitors for free.
- The expectations vs. reality roadmap ranking criteria has been the most important driver of returns;
- We discuss the processes that drive insight and value creation and how we endeavor to be at the center of efforts to accelerate both for all.
- It’s time to simplify our structure – we are closing Founders’ class at the end of the year in conjunction with slight changes to our offer;
- We briefly summarize research updates we’ve posted as well as give a preview to a presentation we’ll soon give to an international value conference.
- We discuss our newest team addition and our newest portfolio additions;
- An overview of our philosophy on shorting and our long-term goals;
- We detail updates to our ranking framework and 2 process updates in order to ensure we avoid mistakes and hit 100x as soon as possible.
- We’ve trimmed FCA and RACE, yet risk-reward looks good.
- New position in WFM- we are happy to partner with this pioneer of Conscious Capitalism.
- Process upgrades – the expectations vs. reality roadmap and the Conscious Capitalist lens.
- Investing returns can be broken up into two very simple drivers. We briefly discuss.
- WFM was taken out by Amazon in the quarter and we initiated positions in TRIP, OCDO LN & NYRT.
- We advocate for engagement with your capital. Engage & innovate.
- We explore the views of our counterparties in top 5 positions.
- Implications behind the robotization of counterparties & where we will always have advantages.
- Portfolio display now highlights the 2 continuums upon which we rank ideas.
- We launched our 1st constructivist coinvestment fund, increasing assets and taking our company engagement to a whole new level.
- We define areas where we continue to innovate and differentiate in an accelerating virtuous circle of continuous improvement.
- Volatility in the short-term and good long-term performance, or low-volatility in the short-term and long-term risk of permanent losses.
- Our initiated short will be the next major government bailout – equity is worthless under current operating conditions.
- Our presentation on EXOR was selected by the Ira Sohn foundation as a finalist in the stock-picking contest.
- Cornerstone of our “suggestivist” plan shared with Rolls Royce has been accomplished.
- Initiated new positions in TITR and AWDR.
- We talk about a new lens we’ve applied to our force-rank system.
- Rather than look for catalysts, we’re looking for mismatches in market expectations and actual probabilistic outcomes.
- Active management leads to better long-term returns and reduces opportunity cost risk.
- Our purpose is to always give investors a portfolio that is timely and right – actionable and attractive.
- Our portfolio’s risk-adjusted profile above 11x.
- Fiat, Renault and Finmeccanica remain the cheapest stocks in their industry despite the recent performance.
- The boom in biotech shares is resulting in big busts for negative Nancy’s in the industry.
- Describing our opportunity set – it’s never been better.
- Our pipeline is full with other very attractive opportunities.
- Rolls Royce has become a new core holding for us, and it’s our first effort to help guide the value-creation process at our holdings.
- Exceptional opportunity Ferrari has as it modestly increases the supply of vehicles to its customer base.
- Irrational sell-off in shares of Piaggio just as demand from consumers increases.
- Upcoming catalysts in Mast Therapeutics, MEI Pharma and Fiat-Chrysler.
- Trimmed or eliminated some illiquid and cyclical positions.
- We find a margin of safety in securities that price-in the worst case scenario.
- Mentioned by Five Star Professional to be in the top 99.8% percentile of New York-based investment management firms.
- After several years of preparation our investments began to strike.
- Maserati has quietly been delivering results that Tesla would kill to produce.
- Discuss out initiated positions in CNE LN and RHK GR.
- We correct the market irrationality that has been present in a few of our key positions.
- Our edges compared to rivals: long-term ability and ranking our opportunities.
- Discuss our initiated positions in UHAL and HRTX.
- Volatile markets create interesting opportunities for those willing to look through near-term mark-to-market risk.
- Global CAPE: Italy priced in line with much weaker and less developed countries.
- Discuss our initiated positions in TRGT and ADI FP.
- We’re avoiding over-valued US sectors like the plague.
- Our investments have largely outperformed their industries and sectors – particularly Europe, energy and small caps.
- The preconditions are fertile, but timing unknown, and the odds are stacked in our favor.
- Remembering Walter Carucci.
- AAPL: Valuation too compelling to pass up with customer churn rates any company would kill for.
- RESI: Participate in the unprecedented housing affordability with significant competitive advantages.
- Volatility isn’t risk unless we’re looking to use our capital in the near future – volatility doesn’t bother us, we actually welcome it in our investments.
- Recent volatility in MSTX has allowed us to purchase more shares.
- We discuss our latest position, Enzo Biochem (ENZ).
- We are contrarians to the core.
- Our new “Global Micro” strategy – low cash balances and no macro trades.
- Good long-term investments necessarily need good management teams, particularly at the valuations where we purchase companies.
- Current market sentiment is extremely optimistic – thankfully the same cannot be said of our investments.
- Many of our investments are still trading at very attractive valuations that don’t reflect current business operations, much less improving fundamentals.
- During periods of complacent-to-fundamentals market moves, we will diverge the most from major indices.
- By demanding a large risk-adjusted potential returns, we give ourselves margin for error in our estimates.
- Discuss our initiated position in LYV.
- Today’s opportunity set is fairly robust and we expect to continue adding new investments in the coming weeks and months.
- With nearly every investment, we deliberately take the rough road, as such untraveled roads often yield exceptional opportunities.
- We think this is a great environment to be hunting for companies that are able to wisely invest in their business and grow intrinsic value.
- Our portfolio has consistently gotten more aggressive throughout the year.
- New positions in NSPH and NKO discussed.
- We relish falling prices, as we can build bigger positions at better risk-adjusted return profiles.
- Initiated several new investments during the quarter.
- Largest driver of our future performance will be the availability of great investments that have a high absolute risk-adjusted return.
- We discuss the criteria required for us to make an investment.
- Leveraging our best ideas into more concentrated positions.
- Initiated four positions during the quarter – PCE CN and FMD are discussed in detail.
- Discuss the two circumstances under which we usually make new investments.
- Why we are not compelled to invest in trend or fad driven investments.
- Happy to stay where the competition is low and where mispriced investments are more common.
- Our strategy is set up to sing in a period of mildly negative or mildly positive equity returns over a multi‐year period.
- Made substantial progress finding mispriced securities to add to our portfolio.
- Initiated positions in TSPT, F, AEN CN and AREX.
- We won’t add investments at any price for the sake of performing similarly to stock indices.
- Discuss in-depth, our newly initiated positions in Sprint (S) and Fiat (F IM).
- Additionally, discuss our positions in Targacept (TRGT) and ADVENTRX Pharmaceuticals (ANX).