Welcome | The Hermit's Protocol (Start Here)

The Research Exhaust of an Active Hedge Fund

Welcome to 🧙‍♂️ The Hermit.

You haven’t just subscribed to a newsletter. You have gained access to the research engine of Equity Focus FIL, an active investment vehicle.

Whether you found us via a friend, an algorithm, or pure luck, you are here because you suspect that Wall Street is looking in the wrong places. You are right.

Our Edge: The “Too Small” Advantage

We focus exclusively on extraordinary companies under $2 billion market cap. Why? Because big funds can’t buy them. They are structurally forbidden from owning these stocks due to liquidity rules. That leaves the field open for us. We exploit this information asymmetry to find mispriced monopolies, forgotten compounders, and deep-value assets.

The Process (The “10-Year Hold” Filter)

We don’t chase trends. We hunt for certainty. Our system demands patience. We only uncover 2 to 5 truly investable companies PER YEAR. But when we find one, we don’t hesitate. We go all in.

Every investment is the result of a 3–6 month due diligence process:

• 📊 Financials: We rebuild the statements from scratch.

• 📑 Filings: We read every footnote so you don’t have to.

• 🕵️ Scuttlebutt: We interview management, suppliers, and competitors.

• 📈 Technical: We respect price action for entry points.

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🗺️ Navigating The Hermit (Your Deliverables)

We publish heavily researched content twice a week. Here is how to use it:

1. The Institutional Deep Dive (Wednesdays)

• For Paid Subscribers

• A 50+ page thesis covering the business model, valuation, and risks. This is the core product

2. Priority Briefs (Wednesdays)

• For Inner Circle

• Full transparency. We share exactly what we are buying/selling in our regulated fund, with audited returns.

3. The Hermit Portfolio (Wednesdays)

• For Paid Subscribers

• Full transparency. We share exactly what we are buying/selling in our regulated fund, with audited returns

4. Pick of the Week (Saturdays)

• For Paid Subscribers

• A concise snapshot of a company on our radar. It focuses on one key angle: Asset Value, Backlog, or Margins

5. Our Investing Journey (Ad-hoc)

• For Everyone

• Essays on cognitive biases, the psychology of money, and the reality of running a fund

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🏆 Hall of Fame (Start With These)

If you are new, don’t start with today’s post. Start with our Hall of Fame.

These write-ups demonstrate exactly how we generate alpha.

The Monopolies (Our Bread & Butter)

• California Nanotechnologies: The US monopoly on advanced materials (SPS/Cryomilling). A deep dive from prototype to production

• Corticeira: [Free] The undisputed global king of cork (60% market share). A masterclass in analyzing a durable moat

• Limes Clinics: [Mostly Free] The world’s most exclusive mental health operator. High margins, high barriers to entry

The Compounders & Consolidators

• Atlas Engineered Products: A structural winner in the Canadian building market. “Truss(t)” the process of consolidation

• QXO: The “Brad Jacobs” Playbook. How a serial compounder is building the next construction giant

• Omni-Lite Industries: Inside a multi-division Aerospace & Defense powerhouse making precision components

The Special Situations

• Spartan Delta: An Oil & Gas consolidator with massive operational leverage. A masterclass in acquisition-driven value creation

• Century Casinos: A classic CAPEX cycle play. How they 10x’d capacity using creative financing

• BluMetric: The water-tech turnaround with a massive backlog of military contracts

The Mindset

• Why Bitcoin Is Going to Zero: A framework for valuing non-productive assets

• How to Invest When You’re Not a Full-Time Investor: The 3-step playbook

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🛠️ The Toolkit

We believe in open-sourcing our methods. Here are the tools we use daily:

• Valuation Tool: The simple model we use to sanity-check price targets

• The Scuttlebutt Guide: How to interview management like a journalist

• The All-Weather Portfolio: How to structure your capital for decades of survival

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🏛️ The Fund (Skin in the Game)

We are not just writers. We are capital allocators. Equity Focus FIL is our regulated European Hedge Fund. We share our wins and our losses openly. Our returns are audited.

• Official Page: Read our Prospectus & Philosophy.

Welcome to community!

- Alejandro Yela, Principal Advisor, Equity Focus FIL