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Portfolio Composition

The core of our investment portfolio is common stocks of small companies. We avoid intensely followed companies and those over $5B in market cap. Our work around small companies routinely results in identifying information that is either unknown or not reflected in share prices.

As a rule of thumb, our position sizes are 1%, 3%, 6%, and 9% fed by our conviction levels, valuation discount, and the timing of future catalysts. The mah works out to an average of ~25 names but the list can expand to 50 and shrink to 10 if conditions demand.

We try and remain “macro aware” but in general find that using options to limit risk on a position-by-position basis is just as effective.

Our investments are confined mostly to North America but we have found ways to incorporate geographic (i.e. Japan) or resource themes (i.e. metals) into our portfolio with US companies that have exposure.

Private investments are not a major focus but we maintain 10-15% of our assets in private companies. These are mostly relationship-driven so we don’t look at many new investments unless they come from someone in our existing network.