Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for. If you know anyone who would be a good fit for the fund, feel free to forward on this letter. The fund is now firmly in its fourth year. Time has flown by and we are now starting to see the benefits of compounding. However, the real mind-bending math starts taking place after the 20 year mark so we certainly have a ways to go :)  As with the typical format, we’ll talk abo

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for.  Before diving in, I want to warn you that this will be the year where taxes rear their ugly head. In the first three calendar years of the fund, the net tax burden has been extremely small since we often tax-loss-harvest and tend to hold companies for long periods. However, we have opportunistically trimmed some large winners as the valuations became expensive. Further,

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for.  At the end of the day, good investing is about understanding reality. If you deeply understand a situation, you will know what to do. However, the future is unpredictable so understanding, alone, doesn’t guarantee success but rather informs probabilities. Our primary job is to find situations where the probabilities are extremely in our favor. One probability-tilting cha

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for.  This quarter, I want to talk a little bit about selling. The biggest mistakes for most investors tend to be mistakes of omission, meaning big winners they missed out on (or sold too soon). Truly great businesses continually execute. That’s why Peter Lynch said to not cut the flowers and water the weeds. Globally, there really aren’t that  many businesses that deserve to

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for. As we wrap up the year, I wanted to include a summarized section from our first quarterly letter: My goal is that Infuse would be the best-performing public equity fund over the next 50 years. I realize that sounds crazy but that’s the goal – long-term, world-class returns, not absolute assets under management. However, just making the claim that you want to be the best i

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for.  After two years of running the fund, I’d like to reflect on how things have progressed. Frankly, 2022 was embarrassing and we got off to a rough start. Digging out of a 35% hole at one point was very daunting. However, the one variable that mattered was the rate of improvement of our research process. Focus on that and the results would follow. Our strategy, in my opinio

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for. I didn’t receive a single worried call, text, or email despite a rough 2022 so I’m happy to share that we’ve clawed our way out of the hole. We are now neck and neck with the S&P 500 since inception, despite virtually zero attribution from large cap tech. But as I don’t like to dwell on the performance when we’re in a drawdown, I won’t get too excited about things turning

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for.  So far, we’ve written five letters detailing our strategy and diving into portfolio companies that rank highly across the growth, quality and valuation continuums. At the end of the day, everything is ultimately about valuation – it’s just that valuation is an art and a science. Time is the friend of the great business but the enemy of the terrible business. Therefore, t

Dear partners, Thank you for your continued trust and support; you are the best partners I could ask for.  As I reflect more on the past year, the more it becomes clear that the core tension in the art of investing is balancing humility and conviction. When a stock goes against you, do you double down, sit still, or cut it? How do you know you’re right? What if you’re wrong? But if you let the stock price do your thinking for you, that is a recipe for terrible results, especi

Dear partners, Thank you for your continued trust and support. As I reflect on the past year, I’ve been studying our biggest losers and have noticed these have been unprofitable companies that tend to be the smallest allocations in the portfolio. These are companies with substantial upside if everything goes well, but also more downside. To that end, we’ve cut all stakes in businesses without profits and have concentrated into the companies where we have the highest convictio

Dear partners, Thank you for your continued trust and support. Despite the lackluster performance start, every one of you has been supportive and you have no idea how much that means. Our investment process is improving daily, and it's only a matter of time before we start seeing things turn around. But enough about the short term, let's dive in! Last quarter, we discussed the qualitative checklist that we go through for every investment. This quarter, I thought it would be

In our opinion, the three legs of good investing are growth, quality, and valuation. Growth without any value capture/real cash flow is...

Dear partners, Thank you for your continued trust and support. I’m not happy with the fund’s performance over the first three quarters. Like we discussed last quarter, I’ve made too many mistakes. However, this quarter was truly a turning point in our investment process and I’ve never felt more excited for the future. I hesitate to dwell on short-term performance because we are truly focused on the long-term but I want you to know that it seriously weighs on me and I’m doing

Dear partners, Thank you for your trust and support. This is your hard-earned capital so I want to be frank with you – I’ve made a couple mistakes so far. First, I wasn’t as focused on current free cash flow as I should’ve been. For example, SentinelOne, was a detractor in the portfolio though I believe they are making progress on the bottom line. Even though it’s only been several months, I still believe it was a mistake to size it up in the portfolio initially. As rates hav

First ever quarterly letter -- Q3 2022 Infuse Partners