💼 THP 01/25: Catching Opportunities, Building Conviction & Lowball Wins
Why patience and automated purchase offers landed us crazy prices for existing and new positions
Welcome back dear fellow 🧙♂️ Hermits 👋
ICYMI:
💼 The Hermit Portfolio: December (previous) Update
If you haven’t yet, subscribe to get access to this post, and every new post
Index
Briefing
In this eighth installment, we dive into the art of continuous learning, smart position sizing, and the power of contrarian positioning. TBH, we had SO MUCH to cover that we ran over 20 minutes and had to cut out a section on screenings. But don’t worry, we’ll be sharing it with you in the near future!
First up, we’ll explore how events like the RV Capital gathering create powerful opportunities by surrounding ourselves with people who challenge us and inspire us to think bigger. It’s all about learning from those who are a few steps (or leaps) ahead.
Next, we’ll examine our portfolio in depth. We’ll discuss A LOT of recent changes, their reasoning, how our companies evolve in real time, together with a large number of insights.
Oh, and we’ll give you a massive update on our Argentinian positions.
We’ve also included details on SEVEN carefully vetted companies from our watchlist. We'll explore them further over the next two to six months.
While there’s still more work to do, these companies are, a priori, excellent candidates.
Please note that this portfolio faithfully reflects the author’s personal seven-figure investment portfolio.
This publication is confidential and intended solely for the use of the person or entity to whom it is given or sent. It may not be reproduced, distributed, or transmitted without the author's prior written consent. By accepting to receive the full post as a 🧙♂️ Hermit Premium member, the recipient agrees to be bound by the foregoing limitations.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
⚖️ RV Capital Recap
Let me just say that I absolutely love my job. It gives me incredible opportunities to connect with extraordinary people, and I feel beyond blessed for it.
So, before I dive into my usual ramblings, I want to take a moment to sincerely thank everyone who’s been around me for their patience, kindness, and generosity.
January marks the beginning of what promises to be an unforgettable year. And what better way to kick things off than in Engelberg, surrounded by a few hundred people who are, without question, way smarter than we are?
Engelberg is renowned for hosting the annual gathering of a prominent and highly regarded money manager.
If you’re unfamiliar with RV Capital, it’s a company managed by Rob Vinall and Andreas Lechner. Rob exclusively manages the Business Owner Fund, which has been operating since 2006 and has delivered an impressive +1,109.5% return since inception - equivalent to an average annual compounded growth rate of 16.6%.
This year has been particularly outstanding. The BO Fund achieved a remarkable 57.9% return in 2024 and closed the year with approximately $434 million in assets under management (AUM).
Note that Andreas, a relatively recent addition as co-manager (joining in 2022/23), has had a significant influence over Rob for decades. However, effectively, they each manage their accounts independently.
We’re unsure if we can publicly share the full fact sheet for the fund, but feel free to DM me if you’d like more details. Just to be clear, this isn’t a sponsored post. We haven’t received any payment or incentives to share this information.
We’ll discuss two extraordinary highlights related to the fund’s gathering: Carvana and William Thorndike.
Let’s start with Carvana - what an absolute beast. On a personal note, we held this position through 2023 and early 2024, at an average cost of around $8. We sold it in late February/early March for $75.
Meanwhile, a few outstanding investors have continued to ride the wave, and the stock now sits at an impressive $250. RV Capital is among them, and Carvana remains one of their largest positions.
Here’s their latest filing:
This is undoubtedly a lesson worth learning: holding on to your winners is crucial. Some investors truly have nerves (and balls) of steel when it comes to maintaining positions like this.
A prime example is Cliff Sosin, whose position in Carvana once accounted for an astounding 85% of his portfolio at its peak. Hopefully, we’ll one day get closer to becoming like these guys.
Here’s his latest filing:
The second point is related to the fact that these guys (Rob and Andreas) manage to get the freaking best speakers of all time. This year, we had a few celebrities in attendance, but the star of the show was none other than William Thorndike, the author of The Outsiders (this is not an affiliate link).
Not to be confused with Susan E. Hinton’s rebel group of teenage rebelling outsiders, The Outsiders by W. Thorndike is a playbook for CEOs.
In the book, the author tracks eight CEOs who, instead of chasing hype or obsessing over growth, focused on what really matters: smart capital allocation. Each chapter is dedicated to one of the following:
Warren Buffett (Berkshire Hathaway)
Tom Murphy (Capital Cities Broadcasting)
John Malone (TCI)
Bill Anders (General Dynamics)
Henry Singleton (Teledyne)
Katharine Graham (The Washington Post Company)
Dick Smith (General Cinema)
Bill Stiritz (Ralston Purina)
Their action paid off big for shareholders in the most unconventional ways. Thorndike dives into their stories, showing how discipline, independent thinking, and a long-term game plan can totally rewrite what it means to be a great leader.
Thorndike is also well-known for his contributions to the search fund world. He approaches backing the next standout CEO with the same cool-headed, systematic mindset he’d use for investing in passive index ETFs. In essence, he walks the talk - an admirable virtue, to say the least.
If you get the chance, definitely grab a copy. You won’t regret it.
We’d also recommend you listen to Rob and Andreas’s Q&A. (posted below)
Just out of sheer curiosity, your humble narrator (yours truly) threw a question into the void at precisely 22:10 - a masterpiece of annoyance, if I do say so myself.
Naturally, it was met with a vague response that could rival a politician dodging a direct answer. (We’re being sarcastic; please, Rob & Andreas, don’t ban us from your incredible event).
For the full cinematic experience (and perhaps to share in my bemusement), here are a few references to enrich your understanding of the question:
Thank you very much for organizing this event, and thank you Rob for completing your trilogy with the moat chat last year. I have a question for each of you.
Rob, Ernie Garcia trader extraordinaire (We’re talking about Carvana). How do you position yourself with a stock that, within 24 months, trades from $4 to $250. How do you rebalance a position like that?
For you Andreas, you’re famous for a position in Bijou Bridgette (yes, yes I messed up the name, of course I did), I’m very curious about your take on jewelry and luxury goods. Can you talk about the theme of it, the demand in china and the positioning of independent producers vs larger player like Richemont or LVMH
After the meeting and whilst dining, we had an incredibly interesting chat with Andreas about nuclear energy. We (mostly Andreas) ran some quick numbers on demand and supply and agreed that my understanding of it all was spot on 🤣 (his exact words were approximately right, but I’ll take the W).
His main concern was kWh costs; we reassured him that they are primarily OPEX-driven. Fuel only accounts for about 10-15% of the cost, and it’s determined by 20+ year long-term contracts (so super stable). Plus, with the initial CAPEX amortized over 60 years, you end up with an ultra-low unit cost of just $0.03–$0.04 per kWh.
For context, we were discussing exactly this.
By the end of our chat, Andreas had requested the full report and signed up, so please join me in welcoming him to our Hermit community!
It’s always an honor when a bona fide genius requests your work.
Once you’ve read the full post, please come back here. I’m eager to hear your thoughts on our latest company write-up and this portfolio update!
Specifically, we want to know what you think is a fair price for access to our quality content annually.
Your perspective means a lot 😊