MEANING - MOAT - MANAGEMENT - MARGIN OF SAFETY
The objective is to maximize long-term purchasing power by finding beautiful companies with extreme right-tail outcomes. Volatility, drawdowns, and long periods of inactivity are accepted as the cost of asymmetric long-term compounding.
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Capital is allocated to a small number of high-conviction platform businesses, ecosystems, or structural bottlenecks with durable advantages and long runways. Decisions are grounded in fundamentals; concentration is intentional and inactivity acceptable.
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Investments must satisfy the 4M framework and explicit valuation criteria before capital is committed. Entry is typically executed via options rather than direct purchases, with deployment biased toward periods of uncertainty.
Learn more4M Works is the name of the investment selection framework and defines the minimum standard required for capital commitment. Meaning, Moat, Management, and Margin of Safety must all be present for a position to be initiated. The framework integrates qualitative business understanding with disciplined valuation, explicit downside analysis, and predefined thesis-break conditions. Failure on any single dimension disqualifies an investment, regardless of narrative appeal or apparent upside.
The business selected for investment must operate within a well defined circle of competence and create long-term value by solving real problems for customers in a clear and understandable way.
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The business must possess durable structural advantages that protect returns on capital over time, including scale, network effects, switching costs, or control over critical bottlenecks.
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Management should ideally be founder-led and demonstrate disciplined capital allocation, with consistent focus on returns on capital, prudent use of debt, and value-accretive share repurchases.
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Intrinsic value is estimated using multiple discounted FCF or EPS models with conservatively derived growth assumptions, and entry requires a minimum 30–50% discount to the resulting sticker price.
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