Stoic Investing

The Stoic M.A.H.I Investment Philosophy

"In the realm of investing, the obvious is obviously wrong.
Our edge lies in seeing the invisible and doubting the apparent."

1. Wolves in Sheep's Clothing

“A business built on deception is a castle in the sky – impressive from afar, but lethal to inhabit.”

We resist the allure of ‘optically’ cheap stocks, knowing that markets rarely reward businesses plagued by:

  1. Deteriorating industry dynamics
  2. Ethically compromised management
  3. Opaque corporate governance
  4. Discrepancies between reported and economic reality
  5. Fraudulent transactions masquerading as legitimate business

2. The Peril of Valuation Hubris

“Greatness at the wrong price is mediocrity; mediocrity at the right price is excellence”

We remain vigilant against the twin dangers of:

  • Overpaying for quality: Even stellar businesses can be poor investments at exorbitant prices
  • Overlooking value in mediocrity: Unremarkable businesses can yield exceptional returns when acquired at significant discounts

3. The Achilles Heel of Poor Portfolio Construction

We understand that stock picking prowess alone doesn’t guarantee success. Mismanaged allocation can cripple even a portfolio of winners. Our strategy integrates stock selection with sophisticated portfolio-level management to optimize returns.

“A collection of star players doesn’t guarantee a championship team. In investing, as in sports, victory belongs to those who master the art of collective synergistic performance.”

The Stoic Edge: Embracing Discomfort for Outsized Returns

Our edge lies not just in structure, process, analysis, and behavior, but in our capacity for informed contrarianism:

Expanding the Circle of Competence

“The edge of our competence is not a wall, but a frontier. Every day, we push it further.”
We reject the notion of a static ‘circle of competence’. When promising sectors emerge, we dive deep, expanding our knowledge base to capitalize on opportunities others might overlook due to self-imposed limitations.

Sector-Agnostic Opportunism

“We are not blind sectoral investors; we’re value hunters. Our territory is wherever mispricing roams.”

We don’t play favorites with sectors. While acknowledging that some industries offer more structural tailwinds, we follow the evidence, wherever it leads. Our flexibility allows us to capitalize on opportunities across the entire market spectrum.

Market Cap Flexibility

“Size doesn’t determine value; value determines our size preference.”
Our preference for mid and small caps doesn’t blind us to value elsewhere. When evidence points to superior opportunities in large caps, we pivot without hesitation, ensuring we capture value across the entire market capitalization spectrum.

The Power of Negative Thinking (Via Negativa)

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