Largely self-taught through voracious reading, Jonathan Tepper views investing as an extension of that process. Great investors are in a constant mode of self-education, digging deeply into new companies and industries. The ability to teach yourself is an ongoing, essential part of the job.
Jonathan Tepper wrote "The Myth of Capitalism" not to present a finished idea, but to clarify his own thinking on why corporate profits were persistently high. He uses writing as a tool for discovery, solidifying a complex investment thesis for himself before committing capital or persuading others.
Publicly defending a stock in investor letters can tie a manager's ego to the position, making it hard to admit a mistake and sell. Some great managers minimize their letters to avoid "painting themselves into a corner," retaining the flexibility to change their minds and seize better opportunities.
A key investment mistake was misjudging the length of the destocking cycle in the alcohol industry post-COVID. After a demand boom led the entire supply chain to over-order, the subsequent "hangover" period of working through excess inventory lasted much longer than anticipated, depressing prices and returns.
Fears of AI disintermediating platforms like Booking.com may be overblown. AI agents would need to replicate decades of user ratings, global payment infrastructure, and deep supplier relationships from scratch—a monumental task that makes it more likely incumbents will simply integrate AI themselves.
Jonathan Tepper's childhood, marked by poverty and loss, made him more serious and introverted. This forged a focus on a life of "quality over quantity," a trait that translates directly into a patient, long-term investing approach that seeks durable value rather than short-term gains.
Jonathan Tepper's fund targets companies with limited competition, favoring "natural monopolies" like Booking.com over regulated utilities. These platforms succeed by creating immense value for both consumers (choice, convenience) and suppliers (global reach, payment processing), building a durable, non-regulated moat.
Privat Capital holds a concentrated portfolio of 16-17 stocks. This strategy forces deep conviction in each position and ensures that winners have a meaningful impact on fund performance. Over-diversification can dilute both research focus and the potential returns from a fund's best ideas.
Jonathan Tepper views aggressive share buybacks during market downturns as a hallmark of a superior CEO. Unlike managers who buy back shares when things are good and the stock is high, great capital allocators like Booking.com's CEO seize moments of market fear to repurchase shares at a discount, creating significant long-term value.