We practice real-time active money management through a long/short strategy. On the long side, we teach and believe in a bottom-up, fundamental analysis value philosophy. We seek to gain a competitive advantage by focusing on small-cap companies with less analyst coverage and more opportunities for deep mispricing with a significant margin of safety..
On the short side, we look to take a contrarian position and look for companies that meet several of our specific requirements:
Significant exposure to technological obsolescence
Weakening moats coupled with high amounts of debt and risk of default
Hard catalyst that will occur within 12 months of our initial investment
Accounting fraud or significant deception in accounting techniques
With these disciplines, we hope to find investments with a favorable risk/reward profile so that we may preserve our capital and diversify our portfolio. Our short positions never make up more than 1-2% of our portfolio and no position makes up more than 7-8% of the fund. Our members are divided into eight industry sectors and become experts through focusing on industry trends and the underlying business models within their sector.