The firm prioritizes businesses with hard-to-replicate assets (tangible scarcity like a railroad) or moats (intangible scarcity like a brand). This focus on durable competitive advantages, which they term "scarcity," precedes a search for purely quantitative value metrics.
By seeding new positions at ~0.5% and rarely exceeding 1% at cost, the fund mitigates the behavioral risk of averaging down too aggressively into a failing investment. This disciplined approach prevents a small mistake from becoming a large portfolio loss.
Citing thinkers like Philip Tetlock, the firm believes forecasting accuracy doesn't increase with information, only confidence does. Their highly diversified portfolio is a structural guardrail against the "overconfidence bias" that leads to concentrated, high-risk bets.
The fund views its 10-15% gold allocation as a hedge that provides downside protection. They believe it offers a positive expected return over time, as money supply growth outpaces gold supply growth, unlike traditional insurance which carries a cost.
Rome’s expansion was a low-CAC "flywheel," as conquered peoples became soldiers for the next conquest. The empire declined as its "CAC" rose (fighting distant foes) and "churn" increased (relying on disloyal mercenaries), a timeless lesson for modern businesses on unit economics.
The fund owns Walmart de México (Walmex), accessing the same proven business model as the US parent but at an earlier growth stage and a much lower valuation (15x vs. 40x P/E). This is a clear play on geographic valuation arbitrage for a high-quality asset.
The fund's competitive edge is patience. They deliberately invest in companies facing short-term headwinds (e.g., regulatory scrutiny, COVID shutdowns) where they cannot predict the next quarter but are confident in the 3-5 year outlook, exploiting market short-termism.
Historically, tech giants spent ~20% of operating cash flow on CapEx. The AI buildout has pushed this to ~100%, fundamentally transforming their financial models. This move from capital-light to capital-intensive means future growth requires external funding, a major shift.
Inherited from founder Jean-Marie Heveillard, the firm's philosophy prioritizes capital preservation above all, famously expressed as preferring to "lose half of his clients than half of his clients' money." This attracts a loyal, patient capital base aligned with their long-term view.