New BHI Research Site

Posted on Posted in General Thoughts

My good friend and fellow investment manager Matt Brice and I have decided to start a subscription-based sister site that we are calling the BHI Members Site. I’ve known Matt for a number of years now, and he and I think similarly when it comes to our approach to investing, which is focused on making a few select investments in high-quality companies that produce attractive returns on capital and, by our estimation, can continue to compound value going forward. Matt is one of the best investors I know, and he has produced net returns of over 25% annually since 2011 when he founded his investment firm The Sova Group.

So What is the Members Site?

Basically, it’s going to be a database of our investment ideas. The site will include:

  • All of our watchlists on the stocks we follow in various categories
  • Our database of great businesses we follow (around 50 of our favorite companies)
  • Our research notes on actionable ideas
  • Our scratch notes from our investment journals (notes on companies we are reading about)
  • An education section that will include investment theory posts and case studies

We will also begin (and have already begun) populating posts on our own summaries and comments on the Buffett partnerships and the Berkshire Hathaway letters. In addition to the Buffett letter summaries and commentary, we’ll include some general investment philosophy and strategy talk.

But for the most part, the site will be a database for our own research notes that Matt and I can use as a way of organizing information, research, links to articles on companies we follow, brief thoughts on company developments, and lots of other things.

No Change at BaseHitInvesting.com 

The main site—Base Hit Investing—will continue providing content on investment thoughts. The Members Site will be more of an inside look at our research files, our real-time thinking, and scratch notes (i.e. notes that we write in our own personal investment journals as we are in the midst of conducting research on stocks). The Members Site will also discuss our positions and investment decisions, etc… basically our investment journals made public. We decided to put it behind a paywall for a few reasons:

  1. Writing helps improve the investment process—and having a subscriber base (even a small one) gives us not just a platform but an obligation to write high-quality, thought-clarifying work—which is a precursor to an improved investment process.
  2. We like the idea of sharing research and scratch notes. I think it helps clarify my thought process, as I’ve mentioned before.
  3. We like the idea of having a database of research that we can use to look back on.
  4. Certainly, like any good capitalist, we don’t mind reaping some rewards on the content we produce if anyone finds value in it.

One ground rule: My investment management firm (Saber Capital Management, LLC) and Matt’s investment firm (The Sova Group, LLC) will always be our first priority when it comes to investment ideas. Most of the stocks that we buy have plenty of liquidity, but in the rare cases where they don’t, we will either buy first before commenting anything, or reserve the right not to mention the stock at all. But in almost all cases, sharing ideas—especially with a relatively small group of potential subscribers—will not hurt our own buying ability nor those of our readers.

That said, we have both found that writing in public has helped our investment process, and has improved our skills as investors. So for us, it’s a win/win. Writing helps us become better investors, which benefits our clients who we manage capital for. Hopefully, by offering more insight into our investment process, serious-minded investors who choose to participate will also benefit.

A Quick Word on Matt Brice

I am lucky to know a number of really outstanding investors (many of them off-the-radar small investors with very bright futures ahead). Matt is at the top of this list in my view. He is one of the most independent thinkers I am aware of. He runs a strategy that is straightforward and logical, but he is one of the rare investors who truly does concentrate on his best ideas, a “punch card” approach that has worked out tremendously well for him thus far.

I am familiar with each major investment Matt has made, and in my opinion his returns have been achieved without taking on excess risk, at least not by my definition (risk being the chance of losing permanent capital). Matt has achieved his record by owning quality investments, as well as investing in a few opportunistic special situations, but one of the best qualities of his portfolio management is his ability to truly focus on his best ideas, owning just a handful of stocks at a time.

Matt is a close friend. We talk frequently about investing ideas that we are looking at and companies that we are reading about. We use each other as sounding boards for our research, which helps us gain honest, unbiased feedback. As Buffett has said, it helps to have a sounding board, and I’ve found it to be very valuable, especially when the sounding board isn’t afraid to tell you where you’re wrong.

Feel free to contact Matt at matt@thesovagroup.com. Also follow him on twitter: @thesovagroup.

Our Research

So what we thought we’d do is basically begin to share some of our research with our readers who are interested.

If this is something you’re interested in, click here to subscribe or to see more details on what we’re offering. Also: we are making it real simple so that I don’t have to spend any back office time worrying about this (again, we have a business to run which is first priority and time is valuable).

So in light of this, the subscription will be a yearly subscription with no prorations or refunds. You can simply buy the access to the site for $500 per year, or $50 per month. There will be no trials or refunds, as that alleviates a lot of back office headaches on our end.

The objective here is not really to maximize subscribers, although we’d love to get some subscribers! The idea here is to put together a database of information, share it with those who want to read or participate, and hopefully improve our collective investment skills.

Check it out if you’d like. If not, keep reading the main blog! And as always, thanks for reading!

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John Huber is the portfolio manager of Saber Capital Management, LLC, an investment firm that manages separate accounts for clients. Saber employs a value investing strategy with a primary goal of patiently compounding capital for the long-term.

John also writes about investing at the blog Base Hit Investing, and can be reached at john@sabercapitalmgt.com.

 

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