What we seek, and what we avoid:
1) WE SEEK OUT DISRUPTED VERTICALS
Currently our analytical work is focused on five disrupted verticals, and we’re looking to add more. It’s where the bulk of our capital is invested.
2) WE AVOID COMPANIES ENGAGED IN BUYBACKS
Buybacks do not create value for investors. We avoid investing in companies that have a lot of buyback activity.
Wealth-building opportunities abound
We can’t make any promises as to whether we’ll succeed or not, but the opportunity is easy to see. Entire industry groups are up for grabs in a fast changing, rapidly evolving business competition that is likely to last well into the 2020s.
Who will survive and thrive? And who will decline and ultimately perish?
This is what makes picking stocks in a disrupted environment so thoroughly engrossing and fun: We don’t know who will win in any given industry group. We can’t know. In most disrupted verticals, all of the players have yet to be identified. The competitive boundaries are still blurry. And the rules have yet to be written.
It means you have to be flexible, and prepared for the competition, armed with both compelling theory and a thorough process. We had a lot of excitement in our first five years. With change accelerating, we’re even more excited about what the next few years will bring.