"My life is for itself and not for a spectacle." Qualitative small-cap value investor.

Why do the "smartest guys in the room" always blow up?
Analytics is easy; decision-making is hard. (Most of the mistakes I've ever made have usually been in the latter category.)

With that premise, I focus on making good decisions with the information I have rather than always trying to collect that incremental data point and consequently missing the forest for the trees. Epistemology and emotional awareness are keystones of my approach. How much do I actually know - how much CAN I actually know - and what conscious or unconscious biases are impacting how I am looking at this investment?

Many investors are attracted to complexity; I'm attracted to simplicity. There are plenty of investment ideas out there that sound attractive and look nice on a spreadsheet, but when you start to dig into the assumptions, you realize there are a lot of implicit bets - i.e., "commodity prices will remain X" or "regulators will do Y" or "management will continue to be able to increase prices at Z%/yr." You can try to predict those things, but you know what they say about making predictions - it's hard (especially when it comes to the future!)

I want to be able to make investments where I'm the dumbest guy in the room and that's okay - if I know very little and have limited confidence in that modicum of knowledge I do have, and yet an investment still seems to be very attractive, then it's likely to work out well.

Combining this philosophy with a very high hurdle rate (typically 20%, though I will sometimes relax/tighten it depending on the circumstances) and a focus on "quality" (good management, good products, good balance sheet) provides a substantial margin of safety - hopefully, even when (not if) I'm wrong, and when (not if) random bad things happen, I'll still deliver strong returns.

Don't interpret this the wrong way - I do plenty of deep research and am often told by management teams that I understand their business better than the majority of investors they interact with. I just always try to think about why, where, and how I could be wrong in my assumptions, and invest accordingly.

What makes the space that you're in so compelling for investors to look at?
I focus on small, illiquid, underfollowed securities because it's easier to build an edge. I don't have the resources or contacts to be on the phone with every semi fab in Taiwan in an attempt to triangulate how many iPhones Apple will ship next quarter.

On the other hand, if I tour an industrial company's manufacturing facility that only a handful of other investors have actually taken the time to visit in the past year - or if I watch a 90-minute presentation by a company's CEO to students at his alma mater that barely any of the shareholders have bothered sitting through - I can actually be one of the more knowledgeable participants in the market (with the caveat discussed above).

What makes your strategies so different versus your peers?
Beyond investment philosophy, I think it's important for investors to consider agency problems (i.e. conflicts of interest) between them and the investment managers they work with. A strategy is only as effective as its manager's ability and motivation to execute it. So I think knowing *why* someone is doing something is just as important as knowing *what* they're doing.

Everyone knows about alpha in small-caps; actually sticking around to achieve it is harder. I'm very transparent with my LPs about my objectives not just as an investor, but also as a fund manager: I want this to be a lifestyle business that allows me to do something I enjoy and am good at without sacrificing what's most important to me (being a great dad someday).

If I can scale to a mid-8 digit AUM (say $30 - $70 million), I'll have more cash flow than I know what to do with, and I'll have complete control over what I work on, as well as when, where, how, and why. If you had to draw up a dream job from scratch, it would look very much like that, no? Who wouldn't want to be their own boss making good money and working on something intellectually stimulating?

And yet the allure of management fees causes most managers to scale up so big that they can no longer execute the strategy they started with. You can invest in small, illiquid companies quite easily when you're running $50 million - but not so much with $500 million, and forget about $1B+. By making the decision to optimize for returns rather than AUM, and hopefully having the intellectual honesty to close my fund to new investors when I feel it's getting near the point where I can no longer do what I'm good at, I'm taking a different path than many managers.

More broadly, there's this quote from Ralph Waldo Emerson's Self-Reliance - "my life is for itself and not for a spectacle." That's me. I am who I am and I'm not going to pretend to be anyone else. I'm not going to do things "for show" if I don't believe in them. I'm never going to have an office (why waste the money?) I'm likely never going to short stocks on a regular basis (between more competitive markets, negative rebates, and the asymmetric risk/reward profile, there's very little alpha in that). I'm never going to manage volatility or not buy something because I think it might look bad for a few quarters. I'm never going to pretend to have some sophisticated, proprietary process when all I'm doing is the same thing anyone else is doing: trying to learn as much as I can and make the best decision I can with that information.

Selling honesty in an industry often built on its inverse is certainly the road less traveled. But I'd rather go to sleep at night knowing I created value for people (or tried my best) and did so in an honest way, rather than jetsetting around the world in a Gulfstream purchased with fees I didn't feel I deserved.

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