Joe Kaye - VALUE Quality Growth Investor

Global small-caps. Full time investor. Research at Joe Kaye Research. Podcast interview:

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

https://t.co/0HbKnDshzu

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@Tangible_Bruce 💯

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

A strategy can make sense on paper and still not suit the person running it.

Early on, I did a lot of special situations. The appeal was clear: an event with a date, a defined outcome and a return largely independent of the market.

The part that didn't work for me was turning over rocks all the time.

Whether the event happened or not, I'd sell, and then I had to find the next idea to recycle the cash into. Alongside my other commitments, that took up too much time.

So I moved towards value investing. I still hold some special situations, but they're no longer the core of what I do.

When you choose a strategy, do you judge it on its returns, or on whether you can keep running it with the time you actually have?

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@whiteoutzack Exactly

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

A conversation in Vienna made me reconsider how I think about position sizing.

An experienced investor described selling a large position after becoming worried about the news, then watching it roughly double over the following months. He thought he probably would have held it if the position had been smaller.

That explanation stayed with me. Perhaps the size had made the news harder to ignore.

Howard Marks wrote: “One of the critical elements in business or investment success is staying power.”

I like concentrated portfolios, so this is particularly relevant to me. A position can look sensible on the basis of the potential loss and still be large enough to affect my judgement.

Alongside how much capital I could lose, I need to consider whether the size itself makes a bad decision more likely.

I discussed this, and a few other ideas I brought back from Vienna, in my reflections on those conversations: https://t.co/mw2gdRwJTI.

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

The most interesting facts about a company are often the ones other investors have missed, each for a different reason.

1. A small addressable market. Many dismiss it, but a niche can be big enough for a specialist to earn attractive profits and too small for a giant to bother entering.

2. A company too small for large funds to buy. Few people are looking, so very small companies can lag what is happening in their industry.

3. A stock that has just jumped on good news. Many assume the move is done. If the news changes the value of the business by more than the price moved, the mispricing can still be there, because new buyers need time to find the company and build conviction.

4. A director selling shares. Many read it as a warning, but some sales follow plans agreed long before. A sale committed to 18 months ago tells you little about what they think now.

None of these is a reason to buy on its own. Each is a reason to keep looking when others stop.

Which of these do you still treat as an automatic pass?

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@whiteoutzack Fair point!

But I think one of the issues is that one can lose objectivity when under pressure

I don’t know the answer though

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

I still feel happier when my stocks go up and sadder when they go down, even day to day. I don’t think that’s particularly helpful.

Buffett put it well: “Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard.”

Price moves give me something immediate to react to. Whether I’m finding good ideas, holding with discipline and selling when I should is much harder to assess.

A falling share price should make me check my work. It doesn’t, by itself, tell me which part of the decision was wrong. Equally, a rising price doesn’t tell me that my original reasoning was good.

I’d rather judge the process against what’s happening in the business than let each day’s price change decide whether I’ve done a good job.

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@0xJaimeth This is the way

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

Howard Marks: “In order to outperform, your thinking has to be different and better.”

When I find a stock on 6x earnings, I want to understand why the market has put it there.

Sometimes the explanation is straightforward: poor returns on capital, unpredictable earnings or a business that’s gradually losing customers. A low multiple can be entirely reasonable.

The situations I find interesting are where something has changed but the valuation hasn’t caught up. Growth has accelerated, a larger share of revenue is recurring, or a significant risk has reduced.

I tend to think about multiples through growth, quality and durability, and risk. Saying a company deserves its valuation because “that’s where the sector trades” often skips over the economics that matter.

I’ve written more about what drives valuations and how I apply this in my research: https://t.co/rXOsYCUsZc.

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@themahmud5 💯

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@Fuertner Howard Marks is a living legend ☺️

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

I’m enjoying the iPhone Duo far more than I expected.

Running AI agents side by side makes it easy to work on an idea in one conversation while keeping another task moving.

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@Vienna13Capital Thank you! 🙏 it’s been a great birthday weekend ☺️

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

It’s a good time to be alive
🙏☺️

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@Monolith_Cap 💯 if you have a structural tailwind you have 🍀 on your side IMO

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

Everyone wants a huge addressable market.

I often prefer a small niche.

A market can be big enough for a specialist to earn attractive profits, but too small to justify a giant entering.

Sometimes the limited opportunity is part of the competitive advantage.

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@robsinghuk Thank you Robbie ☺️

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@Eddy23426893861 Thank you Eddy ☺️

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@RTelford_invest Thank you Ryan 🙏

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@MarkusEndl Thank you Markus. Have you read Breath? Think you might like it

[Joe Kaye - VALUE Quality Growth Investor @JoeValue]

@dunbelievable 😂