We are a couple living in sunny Southern California who are fortunate enough to work for some of the top firms in our respected industries as senior analyst and principal engineer.
During our personal time, we are doing some thesis driven investments in secondary market. We'd like to share some of our thesis here with you. To keep us honest as we refine our methods.
Thesis Driven Investment¶
Our investment process has three steps. First, we develop 3 to 5 years thesis based on our view of the world; second, since we believe alpha is a function of edge - we only take action when we believe our view is different from the consensus (what the market priced in) and has a high probability of being right; third, through careful financial modeling, we construct our portfolio according to our estimation of risk / reward ratio.
Large themes are hard to come by and even when they do, it usually takes years to fully play out. As a result, our typical investment horizon is 2 to 3 years. While we might discuss macro, industries or names we thought interesting from time to time. The bar to enter our portfolio is very high - focus and concentration are at the core of our beliefs.