Apply Clayton Christensen’s framework for technology s-curves on public companies.
The fund tries to buy shares of rebels and misfits that challenge the status quo and that will be beneficiaries of extraordinary growth as soon as the tide turns in their favor. They have the potential to 10x our capital in 5 to 10 years.
When a company completes its s-curve by maturing to its full potential, the fund will initiate re-distribution to the next generation of under-the-radar companies. Ideal candidates typically
- communicate a visionary mission statement,
- are run with an exceptional management style,
- conquer a niche market to aim for mass market adoption,
- have competitive advantages that are difficult to replicate,
- have a loyal customer base as evangelists, and
- are misunderstood or ignored by most investment analysts.
Every market cycle offers its own distinct growth stories and it is the investor’s task to accurately detect the wind of change — its zeitgeist, if you will.
We’re not a proponent of a diversified portfolio. Quite the contrary: We firmly believe that there are at most a handful of companies that we need to be invested in at any given point in time.
While high returns are generally coupled with high risks, we rather believe that high risks solely emerge from a lack of understanding of what you do. Warren Buffett once said that it’s wise to “keep all your eggs in one basket, but watch that basket closely.” The genius of this capital allocation strategy is eternal patience.
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About Matthias Hagemann
Matthias Hagemann’s career spans over a series of financial institutions. Although he dabbled into stock trading at age 15 during the dot-com bubble, he only epitomized his passion at Deutsche Börse, operator of the Frankfurt Stock Exchange, by being exposed to Germany’s top investors and traders. During that time, he wrote his senior thesis on “The Pyschology of Financial Markets” which asserts that market participants cannot act perfectly rational due to their inherent behavioral biases.
He then became securities analyst at State Street where he modeled out his current investment framework. He quickly discovered that many of his colleagues and industry peers did not use a framework by which they navigated the stock market, and decided to create one.
Before turning to portfolio management full-time, he spent another few years at ION, where he automated investment decision-making for financial institutions, central banks and corporations.