6 Core Beliefs
Belief 1: Paradoxical Truth
We believe outsized returns are generated by discovering a novel paradoxical truth that remains unrecognized by the consensus. Our process differentiates between fundamental validity – the scientific and mathematical reality of a thesis – and market recognition, the inevitable point when the consensus realizes its mispricing. We understand that alpha is not merely the result of possessing an accurate variant perception, but of timing the convergence of objective reality and market momentum. We do not invest in isolated truths; we invest in the inflection points of discovery.
Belief 2: Market Dynamics and Execution
Our edge comes from combining hard data with an understanding of human behavior. We use AI to find latent patterns in complex, unstructured data that traditional financial models miss. By mapping these system-level insights against market sentiment and reflexive feedback loops, we seek to identify moments when emotional trading creates significant price gaps for re-ratings. This provides an indicator for us to enter and exit into high-conviction positions exactly when the market’s perception inevitably begins to collide with reality.
Belief 3: Intrinsic Value
We believe a stock’s worth is best determined by the underlying business’s long-term economics, not by what others are willing to pay in the short-term.
Belief 4: Rational and Disciplined Execution
We believe the market misprices securities for behavioral reasons. These arise due to market participants reacting to developments emotionally, rather than rationally, and to some market participants’ misaligned incentives. By remaining rational and disciplined in managing our portfolio, we can take advantage of the market’s mistakes while guarding against mistakes of our own.
Belief 5: Concentrated Portfolio
We believe in concentration over diversification. After constructing a portfolio of high conviction stocks where being wrong on any single judgment should not result in a material loss of principal for the portfolio as a whole, additional diversification is more likely to increase, rather than reduce, risk by forcing the inclusion of increasingly inferior investments.
Belief 6: Tactical Downside Convexity
We believe markets are inherently fragile. Periods of calm conceal the buildup of hidden risks that surface abruptly. Rather than holding permanent tail hedges, we seek tactical downside convexity – selective, asymmetric positions that gain disproportionately during episodes of dislocation. By periodically acquiring protection when complacency is high and prices for downside convexity is low, we preserve both capital and optionality without the constant drag of permanent insurance.
Jude Christensen 