1. Focused. We run a concentrated portfolio and commit substantial percentages of capital when we think the risk/reward characteristics are in our favor. We believe excessive investment diversification can only lead to average, market performance. (After fees, excessive diversification will lead to index or market underperformance.)

2. Tactical. Risk can sometimes be mitigated and superior performance (i.e. alpha) may be achieved by varying market and asset class exposure. Therefore, we continually adjust overall market exposure (i.e. beta) based on valuations and market sentiment. Client accounts vary from 50% to 150% long exposure to the equity markets and non-US Treasury bonds (i.e bonds with “credit” risk). We believe broad equity market exposure performs poorly when valuations are high and market sentiment is poor (and vice versa). The same is true for all asset classes.

3. Growth-Oriented. The objective of our strategy is capital appreciation. However, this does not mean we are only focused on achieving capital gains. Coupons and dividends are perfectly acceptable forms of investment returns. That being said, the strategy is geared to protecting and growing capital, not generating income.

The high-growth, concentrated portfolio is comprised of (primarily founder-led) high growth companies with large addressable markets. Will look for dominant businesses with a special sauce (“moat”) which allows them to compound their revenues, cash flows and earnings for an extended period of time (1-3 years).

Usually (but not always), such disruptive businesses operate in the technology sector and they are led by visionary founders with skin in the game. As technology transcends the boundaries of normal IV’s, secondary and tertiary served served by prospective companies will be considered in measuring sector concentration risk (see CLASS definitions page).

Short term trades, “rentals” or swing plays will be avoided and highly scrutinized, with stops no greater than 10% in place immediately upon acquisition; when investing in this fund it is always with the intention of holding indefinitely, but the hyper volatility in this fund’s primary focus must remain at the fore. In reality, average holding period is expected at no greater than 3 years.

When to sell? -

(i) When a company's rev. growth < 15% pa

(ii) When the mgt. deteriorates

(iii) When the 'moat' has been invaded

(iv) When a new opportunity is spotted or freed up cash needed

Apart from the above scenarios, I expect to remain invested in the companies and allow them to compound over time.

On macro, market timing, forecasts -

How does the market measure quality companies, how do I identify quality companies, and how will optics differ between the two? Forecasting performance against measuring quality companies develops a dangerous level of dissonance. I started investing in my preteens, purchasing companies like $25 $FCX and $35 $TSLA with the money I was gifted at my birthday parties. $FCX at the time had solid all around fundamentals, whereas $TSLA was an exciting company but CNBC laughingstock. I learned much from my first two investments - I have yet to come across an individual who has accurately and consistently timed the economy and/or the stock market. What is known is that the investment business is cyclical; markets go up and they go down. Fortunately, with the way the system is set up, the stock market goes up over time and upswings trend longer than downtrends/contractions. This is why the portfolio will be built upon the notion of quality companies; no matter the situation, over time, quality businesses bounce back; fundamentals can right themselves over time, poor value propositions and leadership cannot.

How to handle volatility -

In order to reduce the drawdowns of high-beta, growth portfolio, hedge the book by shorting various ETFs to offset geographical exposure. For example, to hedge US/int'l exposure, short $IWO, or to hedge China exposure, short a Chinese ETF.

Such hedging marginally reduces returns during strong uptrends but provides cash and a good night's sleep during severe bear-markets. It is worth mentioning that hedging doesn't always work; especially if only the high-growth/high-beta stocks are under pressure. When this happens, I grit my teeth and embrace the pain.

On stock selection -

When selecting any potential stock, evaluate the underlying business, the competitive landscape, quality of the management, optionality and the size of the total addressable market.

Fundamental analysis and “moat” value proposition research are the primary weapons, and the secondary weapons are the review of price charts. The chart may be viewed in this portfolio as the amalgamation of all known information, and reflects the true supply/demand for any company's shares.

Will often review opportunities to add to positions on breakouts or channel break.