Belief 1: Paradoxical Truths
We believe that new markets are generated by founders who have discovered a novel paradoxical truth with great commercial potential. We spend an exorbitant amount of time researching and discovering paradoxical truths that other investors may have not realized. These variant perceptions are the basis for identifying high conviction narratives and companies we find attractive.
Belief 2: AI-Augmented Framework
We employ data science and machine learning techniques to rigorously validate investment theses and trading signals prior to implementation. Beyond traditional quantitative and fundamental frameworks, we leverage AI models to uncover non-linear and meaningful latent relationships within high-dimension and unstructured datasets.
Belief 3: Concentrated Portfolio
We believe in concentration over diversification. After constructing a portfolio of high conviction stocks, where being wrong on any single decision 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 4: Intrinsic Value
We a 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 5: 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 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 