About the partnership

Our investments split into two categories: generally undervalued stocks (“generals”) and special situations.

1. Generals are undervalued stocks where we have no set timeline for price correction to intrinsic value. Generals can pay off quickly or take years. There’s no clear catalyst for gains, but their lack of buzz keeps them cheap, offering value and margin of safety. While our investment categories vary with opportunity set, this is typically our biggest category.
2. Special situations are tied to specific corporate actions, as opposed to market supply/demand. These typically have predictable timelines: we can reasonably forecast returns, timing, and risks. Examples include mergers, liquidations, reorganizations, and spin-offs. This group of investments delivers returns mostly independent of broader market swings. If we hold a big chunk of special situations during a market down year, we shine; in a big up year, we may lag.

We find our best opportunities in pockets of the market that larger pools of capital overlook. With a large investable universe and freedom to hunt for opportunities in niches with little to no price-setting competition, we have a great environment to maximize returns. We do things easy and seek not to play at the table with the smartest, most well-funded players.

Our investment portfolio is very different from that of the broader market, and our method of operation is substantially different from that of mutual funds. We’re not in the business of forecasting broad stock market or economic shifts. If you expect that from us or view it as vital to investing, the partnership is not for you.

While we cannot promise results to partners, what we can promise is that:

1. Our investments are based on value, not popularity.
2. Our focus is on outperforming the global market index by a wide margin on every five-year rolling period.
3. Our operation requires a wide margin of safety in every investment to avoid permanent capital loss.
4. Our communication with you is candid, rubbing our noses in mistakes.
5. The investment manager will have virtually all his net worth invested in the partnership.