Applying the principles of advantaged betting to capital markets.
A concentrated, long-only portfolio of five to fifteen asymmetric investments, held for a multi-year period.
What we do:
- Apply the principles of advantaged betting to capital markets.
- Concentrate in 5-15 asymmetric investment opportunities.
- Target 15%+ annualized returns.
- Target 10% initial position sizes.
- Invest with a 3+ year time horizon.
- Measure risk as the impairment of business value.
- Sell based on opportunity cost.
- Invest 100% alongside our clients.
- Charge performance fees only when we outperform a low-cost alternative.
What we don’t do:
- Value assets based on what others are willing to pay.
- Trim positions based on concentration.
- Sector, factor, or market cap allocate.
- Seek catalysts.
- Measure risk as stock price volatility.
- Disclose current holdings.
- Charge clients asset-based fees.
Investment Strategy:
We run a concentrated, long-only portfolio of 5–15 asymmetric investment opportunities, using reverse-engineered DCFs to extract the expectations embedded in stock prices and investing only when those expectations are materially below our own.
We exploit time-horizon arbitrage by seeking opportunities where short-term uncertainty has depressed market expectations, yet long-term fundamentals remain attractive and predictable.
We explicitly seek out situations where there is no clear near-term catalyst or timeline for the intrinsic value gap to close, taking advantage of the tendency of most market participants to avoid these investments because they are beholden to short-term return expectations.
We invest with a 3+ year time horizon and only when the resulting valuation implies a 15%+ annualized return over our expected holding period.
What is our competitive advantage?
We do not possess an intellectual, informational, or speed advantage over other investors.
Our edge comes entirely from time-horizon arbitrage: we are willing to wait longer for our investment thesis to play out than most market participants.
Most stock prices reflect reasonable expectations for a company’s future cash flows. Mispricing tends to arise when uncertainty creates a mismatch between short- and long-term expectations.
Most professional investors are constrained by short-term performance benchmarking, making them less willing to own businesses when near-term results are uncertain — even when long-term fundamentals remain attractive.
We explicitly seek out these situations, often investing without a clear catalyst or timeline for when the uncertainty will subside.
Our willingness to endure short-term uncertainty and underperformance is what allows us to buy businesses at prices meaningfully below intrinsic value.
We seek clients who share our long-term horizon and understand the advantage of patience in a world driven by the relentless pursuit of short-term performance.
Start a conversation.
We work with a small number of clients who share our long-term horizon and understand the advantage of patience in a world driven by the relentless pursuit of short-term performance. If that sounds like you, write or call.
- ptinucci@sheepdogcm.com
- Telephone
- 303.304.7691