Belief 1: 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 2: 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 3: Paradoxical Truths
We believe that new markets are generated by founders who have discovered a novel paradoxical truth with great commercial potential. We devote substantial resources to identifying paradoxical truths that other investors may have overlooked. These variant perceptions form the basis for identifying high-conviction investment opportunities and companies we find attractive. We believe the greatest investment opportunities emerge when a paradoxical truth transitions from impossibility to inevitability, but before the market fully appreciates its consequences.
Belief 4: Intelligence Amplification
We view artificial intelligence as a force multiplier for human judgment rather than a substitute for it. By combining domain expertise, first-principles reasoning, and machine intelligence, we seek to absorb more information, identify non-obvious relationships, and update our views faster than the market. Our objective is not to automate investment decisions, but to improve the quality, speed, and depth of decision-making in environments defined by complexity, uncertainty, and change.
Belief 5: Tactical 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 