Good Investing Talks - Why do you like Cardlytics stock, Alejandro Yela of The Hermit?

Episode Date: April 17, 2025

It was my true pleasure to welcome Alejandro Yela of The Hermit substack https://hrmt.substack.com/ and the Equity Focus FIL fund for a chat!

Dear viewers of good investing talks, it's great to have you back on the podcast and it's great to welcome the Hermit or Alejandroela from Spain, how he's called in real life. Where are you based right now? Well, right now, I'm actually in Ireland. I'm looking at a few companies over here and I came to a friend's place just for a few weeks. Lovely. I hope you enjoy it there. You're an emerging manager and also writing substack. How is the substack called?

The substack is called the hermit. And I essentially talk about microcaps that no one is looking at. So how did you come up with this quirky hermit name? What drove you to use it? Well, the hermit is actually a sort of nod to my brothers. I call my brothers enemies. And at the same time, it's also sort of a mythical figure of sorts that I try to emulate. I try to be, you know, a wise old man that is sort of isolated from the rest of society and that can think independently because of that.

And that's sort of the framing for the hermit. And I sort of took character out of it for both the money management front and the publication front because they are both talking about and using microcaps as a tool. Okay. I hope you don't have that much old man wipes in the depth of research. you do. I'm still young, ish. What do you do different with your investing approach? Well, first of, I look at very, very tiny companies. The range probably extends from about nine million Canadian dollars in market cap, which is very, very small, all the way up to like two billion-ish. But most of the investments I work with are around, let's say,

the 100 million dollar mark. There's multiple sites to it, but the real deal of it is that I do look extremely thoroughly at the filings, and I try to point out one or two short and medium-term catalysts that will allow for a fast re-rating of the companies. I do plan on holding them for a decade. The thesis of it is 10x in 10 years, I think. But the essence of microcaps, make it so that the catalyst are usually triggered, and then there's like an instant re-rating. So within like a day, for instance, on my companies last year, I had an 80% increase just in a single day. And within a week, I think it was like up 120 or 130%. And that pretty much makes it so that I need to cut and trim certain positions in order for them to

stay sustainable and not get something like cartiletics back in the day, which got up to like 60% of my portfolio. Please call me before they explode like this next time. No. I actually published it's on the Hermit. I published the report on PLC the exact day. It was re-rated. So I finished writing it up and within like one hour of me publishing it, it just went up.

But it's a complete coincidence. Like it had nothing to do with me. But yeah, this would be like a 40 minutes write-up. So you'll get bored enough by the end of it that you won't invest. in the company so fishing in the small cap space some companies have a reason why they stay small how do you avoid such companies which could also be seen as value trap that's a very good question i'd actually distinguish between the two types of smaller companies let's call them infinite scalers and then like limited scalers both of them usually operate in a niche or

in a monopolistic type environment and monopolistic oligopolistic if I'm looking at it. But some of them sort of get to this ceiling where the market isn't big enough or the players are getting bundled like they're bundling their services, so they don't really scare. If we're talking about the non-scalers,

you would have something in my portfolio like Redisred. Redisred is a company that processes paper and data for SMEs. And the thing is, it drives with a van, and it will go to your company and ask you for the data you want to sort of raise and eliminate from the world. And you give that to them. But there's a point, you know, when you exceed, let's say, a hundred million in revenue, where an Oracle of sorts will come to you. And they'll say, okay, we'll bundle that service with nine other services, and you won't have to really pay for it. So there is a limit to it.

There's a limit because there's only a number of companies between. like 100K and like 50 million in revenue that will use this service. But their strategy is inorganic. So there's a point where they can't really deploy this capital. They can't really buy other firms and that will sort of be the ceiling. Once again, this is the limited site. On the unlimited site, there are some companies that scale infinitely, but they are part of like a niche. These usually scale with both market share and inflation.

And then there's usually a catalyst. So one of my positions, for instance, is Century Casinos. Century Casinos will just operate and sort of grab a little bit more market share in their existing casinos. But then they deploy this other strategy where they purchase other casinos or they purchase operations or they make very, very small bets, meaning that that capital can be reused in the same business, but the scale of it is extremely large. So even though there is an upper limit, the upper limit will be. be like, I don't know, 50 billion, and they're currently trading at like a billion in enterprise value.

If you take into account that there's a complex structure down there. But anyways, the scale of it is so large that by the time they get to that limit, it's already like super, super far away. And it would take 30 years. And I consider those sort of unlimited in terms of size. How would you define your circle of competence in the small cap space? It's an ever-expanding circle of competence, because I do try to learn, but there are certain things in my past that have enabled me to sort of get a quick grasp of certain things. For example, I've been looking at oil, particularly in oil and gas, particularly in Canada recently.

And that's only because my first boss back in like 2017, head of a family office, you know, trader since 1983 type person, he was completely obsessed with oil and gas. So I did a lot of research back in the day because I sort of did that, I can sort of pull that out of the hat whenever I need it. Same thing goes for cybersecurity. I used work for five years in cybersecurity. So that's fairly easy to sort of pull out. The same thing goes for like REITs or like real estate, which I am not very good at, but I still have a lot of experience in. And that can keep going, like I can keep going with those examples. There are sectors like ATTEC that take a lot of time to understand.

But yet again, if you're there for two to three years, you end up getting a grasp of who the players are, how certain things work, and whether certain things will work in the future. but once again that circle of competence is permanently expanding i am 28 years old so you know by the time i get 50 hopefully it'll be like a fairly large thing uh but it does come from experience and it comes from once again two or three years at least of moving through the tides of whatever sector we're looking at you already mentioned 50 so how long are you in the vesting game for so you want a retire with 50 or oh i love my job i love what i do Like, I literally can spend 24 hours a day doing what I do. It's so much fun.

Don't forget to sleep. It's also important. I know, I know. I do sometimes forget about that part. But I can do this until the day I die. I love it. It's sort of the game of games. And I'm constantly learning, which is extremely important to me and extremely fulfilling.

We talked a bit about your motivation, but you also have the motivation to manage other people's money? What kind of goal are you trying to achieve for people who trust you with their money? Well, I don't really have a set goal per se. There is an upper limit because of the strategy. So the upper limit is about 100 million. I think the exact number is 92 million with my strategy because of how you can only buy and sell companies for a certain number of days. I try to limit it to between 30 and 60 days of purchasing selling. And because of the liquidity of my microcaps, well, I can't really go over that mark. I don't want to get near to that market either because it can be a massive pain in the

end, especially in moments of stress where there's no market for these companies. Right now, my goal is to make money for my investors. I will try to expand it throughout Europe once I get the regulators on board because I can commercialize it in Spain, but it's still being processed for the EU acceptance. There's like an EU passport, essentially. me. And the way I do it is by sort of phasing out AUM fees and just focusing on performance fees. So I'm very, very, very aligned with the people that are trusting me with their money. These are also people who are either institutional, funnily enough, or my age. So they do have

a lot of patience and they have built a relationship with me. And that helps a lot with how I can purchase certain things that are illiquid. That's a good purpose in the long-term perspective you have there. Before we go a bit deeper in your research process, what are important things you have achieved outside of investing? Is there anything you would call outstanding? Well, I've done a lot of sports in my life, a lot of martial arts and a lot of skiing, actually competed at a very, very high level in that sense.

I have gone through faces, particularly after COVID. My weight went from like 75, 80 kilos to like 110. So getting back from that is already a challenge in it of itself. But yeah, I don't think I've done anything extraordinary right now, but I am building a legacy of something extraordinary through this fund. Like my average returns are really good. And because of the scale and how I'm sort of framing the entire operation, this could be a very, very, very interesting company that right now is a fund,

but can eventually become a hold call. I can eventually assemble a team to sort of do multiple things at the same time. Investing in listed equities, for instance, doesn't really scale with people. So you can be managing a billion by yourself. But there are a lot of other things that I've been, you know, involved with uh i've been involved with people should it's actually it's actually more than me being directly involved i've been involved with people that are very very good at it and because of that the scale of this operation can be very large and i do see it becoming you know something very

very tangible and that will hopefully change a lot of people's lives is there anything outside of the investing world uh that keeps you pushing even harder to achieve success in the investing world? That's actually, that's actually a funny question because right now I'm dealing with, I'm going to call it love. I am managing a relationship that has been going on for more than half a decade. And it pushes me to become a better person. It teaches me a lot how to deal with frustration.

evolution, it makes me mature, and at the same time, it keeps me rooted in reality. A lot of times you end up dreaming what things can be, but being pulled back to reality, particularly with investing, but with most things in life, it's a very, very good thing. So building a life project is sort of the way I would frame it. And that has been a recent development in my life. And it's extremely positive. I love it. That's great to hear. Let's jump to the research topic.

Where do you get your investing ideas from? I actually funnel them through three places. One would probably be substack. You know, other substack writers are very willing to share, very willing to talk ideas out. And that's a community I very much appreciate. the second would definitely be quantitative slash qualitative filters where I just go through like, I don't know, like 5,000 companies a year or some. I was talking about this with a colleague yesterday.

I think I went over 40 or 50 companies yesterday alone, and I found nothing. But if you insist, if you persist in that search, you end up finding one or two very, very interesting companies. Very interesting and executable. Because very interesting, you'll probably find like 10 or 20 in a year. And the third method, which is probably the most time-saving method, is other investors. So I'll go to, I recently was in the RV Capital meeting, for example, and that's full of other investors and allocators. And they each have their own ideas, their own ways of doing things. But because they've processed them so much, because they've sort of, you know, synthesize the idea into a very simple thesis. And because they're overall

extremely smart, you can get really, really good ideas, maybe not executable because they'll sell you on their wins. But sometimes you do get, you know, glimpses of something that I can invest in that sort of matches my criteria and that will make a lot of money for a lot of people. So if you have an idea on a table to do more work on, it. What aspect do you spend the most time on in your research process? Well, there's a preliminary filter that I have to go through, you know, typical quantitative filter. So looking at their numbers, looking at the business model and understanding that framing it,

framing it in comparison to other things I've done in the past. Let's say, for example, oil and gas, oil and gas will have a bigillion different sub-sectors. But the thing I'm looking at right now is maintenance of oil and gas. and like decommissioning, that has its own, you know, little quirks, and you have to really understand what those are. That, once again, the preliminary phase is very, very important, and that's usually what I do most, but only because it's sort of part of the volume, and because I do that for 100 companies. But out of those 100 companies, I'll really look into 10, and that's, I'd say where the bulk of the work is.

Because when I really look into those 10, I do what is known as Scuttlebot. So I'll interview everyone involved. I'll interview clients. I'll interview suppliers. I'll interview former employees, hopefully those that have exited the company, you know, willingly because you get a mix of people. And then by the end of it, oh, I'll interview investors sometimes, depending on the company, but investors sometimes.

And at the very end of it, I'll interview management. and I'll ask them for their takes on, you know, XYC. By the time I interview management, I already have a very, very complete idea of what the company does and how it will sort of evolve into the future, but I do want their take of their vision because execution is everything. And that's why I do the whole interview process

of all these stakeholders. Hey, Timon here. It's great that you've made it that far into the video and I think it shows a certain passion for investing you're having. If you want to dive deeper and go further down the rapid hole, you're invited to apply to my community Good Investing Plus. It's a place that's very helpful to people who are ambitious about investing. It's helpful to investment talent as well as Experian fund managers. So if you're interested, please click on the link below.

And now, without further ado, enjoy the conversation. How important is liquidity for you in the positions you've been? build? It depends on the holding period, but it is very important that I look closely at it. The liquidity in itself can be a risk, but it's more about how you frame it. For example, I've done trades in very, very liquid stocks, but where I buy a block with an option to resell that same block to the person. So illiquidity in that sense doesn't really matter. It's all about me being able to, you know, enter and exit with set conditions. That being said, if I'm buying out of the open market, I usually limit my bias to 20% of volume for about 20, 30 days, 20% of volume

or 10% of volume 60 days. These would be working days. So, you know, like it's more than two months. It'll be like three months. That being said, I am currently out. having a lot of trouble exiting one of my positions. It's a company based in Spain, and they basically have zero liquidity. If that is the case, and if I want to exit, what I either do is try to sell a block or in the case of this one in particular, it's called Al-Qiber in case you guys want to check it out. Very, very good company. There's a bunch of things that don't sort of meet my criteria, and it became a very, very big position.

So I'm cutting it from about 12% of my portfolio to about 5%. And selling it will potentially take up to three months because I have to keep on selling very, very, very small stakes. But because in the short term, it has very positive catalyst, I don't really care. I'll just, you know, let it right. If it takes more than like a year to sell it, then obviously it would be a concern. But right now, because things are very, very positive, I am just. trimming it very, very slowly. And we're talking like 0.05% per day, like slowly, like very, very sorry.

I hope that answers the question. It does. Which free investment mistakes have improved your research process the most? Well, I don't know about three. The biggest one is looking at TAM and being like, oh, this market is really, really big. A company can do whatever, even though it's trading at like 10 times revenues. that's obviously a very stupid way of investing that i invested with in the past uh the mentality of time is useful but it really only matters if they're like the market leaders so if your time is

like a hundred million i'm making this up and you own currently i don't know if you're like the market leader with 60 percent then sure time is very very important but unless that's the case, and that's not usually the case for most companies. It's not as, it doesn't predict how your success will unfold. The second thing I'd say is some of the parts. Some of the parts I suck at it. I was involved with a number of real estate deals with one American brief in particular that were very, very bad because I was sort of adding everything individually, so every single asset, every single building they had, and trying to sum them all up, some of the parts, once again, and get a final number. But that final number, especially when you're in liquidation

or where you're in a fire sale, or when you take a very long time to sell, because you have ongoing expenses, doesn't really equate to reality. So if you sum them up and you get, let's say three. The reality of it is if liquidation takes long enough, that number can be closer to zero than you can actually imagine. And a third mistake, a third mistake would probably be blindly trusting a mentor, especially when you're younger in age. Sometimes you don't understand something fully. And instead of saying no, you just say yes because you trust the other person. But in reality, you're the person who has to build conviction. Like if you don't build conviction into your positions

and things go south, you will panic. And it'll cost you sleep. And it'll probably cost you some sanity as well because you'll feel, you know, like you're a failure when in reality the mistake was not doing the work or not doing the entire work. Or even if you've done the work, sometimes you just don't know or you don't know enough.

So you should just say no. so the work around with the mentors is to always do your own work now yes 100% even if you blindly trust someone you know where you like would i don't like kill for them type trust uh you should do the work because in the end if you're the one making the decision to buy you are probably also making the decision to sell and buying is very easy buying is you know something is underpriced you buy that's the only reason you buy but selling has like way too many options just for you to to blindly jump into the stock or asset or you know whatever you're buying we also want to talk about one stock here and it's catalytics we've picked

where did you get the idea for investing in catalytic catalytic catalytic from oh cartilics uh it's been it's been a right i i found correlatics in like a screener super random screener back in 2018 and I bought a few shares in 2019 just out of luck I think at like 20 bucks ish a little bit under 20 bucks anyways it was like a tracking position for me and I just built conviction over time as they were signing more and more banks to the point where there were you know moments where I started buying Carlytics I did coincide at one point with with its main investor, who's Cliff Soshen, a guy I admire profoundly, mostly because of his

brains, but also because of his ability to sort of project certain things into the future. I still don't know how he does it, but he can get things very, very right, even when everyone tells him he's wrong. He's very famous for Carbana, which I think is like 80% of his portfolio right now, not because he bought a lot, but because he just didn't sell and the stock like 40x. or 30x or something like that within like a year and yeah my most of my purchases of carlytics were between three and six back in 2023 about a year ago actually and i think it was march twenty twenty three i did go bananas buying it i think it got to i'd purchase something like forty percent of my personal portfolio i can't do that with managed money and i think for

for management, it got to like 10%, which is still a very, very large position. But with my personal portfolio, I did buy a lot of it back in 2023. So, excuse me, I said one year ago, it would be two years ago. And it was the main cost of my returns, which were, you know, triple digit returns in 2020. They were also, it was also the main cause of my poor performance in 2024. And it subtracted overall about 15%. I think it's 17% from my overall performance. So if my overall performance would have been, I think,

from my managed accounts, like 32%, I ended up with like 15% just because of Carlitex. What kind of problem does Cartlutic solve for the customers? And who are the customers? Well, Carlytics really has one customer, and that would be the bank. but the bank ultimately has its own customers, which are the people with an account in the bank. You could argue that the ultimate customer is, you know, the client, the bank's client.

But in terms of real client, I'd say it's the bank. Why the bank? Because the bank is getting essentially loyalty or loyalty buildup from Carlytics. And Carlytics just optimize the whole process of getting offers to clients. In the past, banks used to get a bunch of interchange fees from like Visa and MasterCard. Every time you make a transaction, your bank gets, you know, a percentage of that. And they used to get that money and just give it back to people in the form of cashback offers. So they would give you like 1% on your groceries, 2% on your groceries.

What Carlytics does is instead of using those interchange fees, they went directly to advertisers. and they were like, advertiser X, like Panera, Panera, do you want to advertise directly in a bank? We'll get very, very good data from the bank on the people you're advertising to, so we can target it perfectly. We can also measure it perfectly. And you can essentially have a controlled budget. Then we can spend, you know, within a certain time frame.

To the point where some companies like Starbucks, for instance, were spending, you know, a few years ago, they were spending like 25 minutes. million alone within this bank Carlitics ecosystem. So you do get those three parties, the advertisers, the banks, and the consumers, and between those three, you essentially have a win-win-win scenario. In addition to that, you have Carlitics, which takes like a little piece of the pie, perhaps not that little. They take about a third, but it still makes the other guys win in terms of, you know, making

you money and like loyalty in the terms of the client and the client saving a bunch of money that they were not saving before what is your investment thesis for the stock for me carlytics has three stages they have stage number one which is convincing banks to sign them up they are done is i mean it's always going to be an ongoing process but for instance right now they're onboarding American Express. They've already got J.P. Morgan, Bank of America, Wells Fargo, U.S. Bank Corp. They have a bunch of stuff in the UK as well. But the point is they have to onboard the banks. They have to convince the banks for them to share their data in order for the targeting to happen. That's stage one. Stage two is automation of it all. So there's a point where you can

make it so that the targeting doesn't require a really, really. big team, then instead that it's automated, and then you get a set amount of returns for each one, so like a standardized product that is also at the same time a white level for the banks. And then stage three is self-service. Self-service is where Carlytics makes a lot of money, like a lot of money. And that's where instead of targeting major advertisers, they can target Tony's Pizzeria from downstairs, and they can enable them to make an offer through the bank to a very, very select audience through this really, really perfect targeting.

And this self-service is a platform in itself that allows perhaps at the beginning aggregators, so people that bundle place like Tony Speeteria, but in the end, Tony Speetzeria itself to sort of advertise when they have certain conditions. So you can make it extremely automated. There's a very good example that Cliff Soson gave in one of their interviews,

from one of his interviews, where, for example, in a ski resort, through Carlitics, you could offer a permanent campaign whereby every time it rains, you get like a 30% discount of your, like, day pass. So you meet a condition through the self-service, you execute that, and you essentially get clients that you would have never gotten otherwise. And that can be the case through, for example, a POS, a point-of-sale type thing with Tony Speeteria, where if Tony's pizzeria has extra stock, they'll be like, okay, I'll activate the offer. So, you know, the next 20 pizzas that we sell are going to have this offer. And then, you know, we accelerate the inventory turnover. Even though we don't make 20% margin, we'll make 15% or 10% margin. And we'll finance

that through essentially carlittics, but get the clients and sell those pizza. And I don't know if you know this, but about 80% of the revenues that meta makes, for example, come from advertising of these small players. The reason why is their price sensitivity is much lower. So Carlitics can get a massive chunk from that and it can essentially have infinite clients. How do you get confidence on this as you're European and they mostly or all of their business is done in the US? Well, you can't really apply this model in the EU because we have GDPR. And even in the U.S., it's still anonymized data, but you can use the data in itself. We here love regulation, and because that's the case, there is a minor way of following things through coupons, but targeting cannot be done.

The U.S. is very, very unlikely to change that model. And the reason why is lobbying. It just creates too much money for the people involved. particularly the banks and the banks are massive there. If you have very, very small banks, then it would probably be different. But because of the size of them, it's very, very difficult to that this, just to point it out, this, if Carlitics makes one buck, that means that JPMorgan is making one buck as well. And that one buck from Carlitics has a bunch of expenses.

It has zero expenses for J.B. Morgan. So right now with like 300 million in sales and J.P. Morgan being like 40 to 50%, that's call it 40%. That's, you know, 120 million in revenues for Carlitics, but 120 million, which goes directly to the EBIT for J.P. Morgan. Sure, 120 in the scope and size of J.P. Morgan is nothing, but it's literally free money for them. And it's also extremely good. for the loyalty programs. Why? Because they went from like 1, 2, 3, 4% cashback

to an average of almost 11% in cashback offers with Carletters. What makes you comfortable with the volatility or how do you manage the volatility in the stock? In your holding period, it tripled or, yeah, 5X, then it's back to the level you bought it. How do you go about this? And more than five or six. It went in just the two last years alone.

I think the range is under three bucks, like $2.90 all the way to like $21 or $22, which is ridiculous. Like the volatility is crazy. Because this is an infinite scalar, I don't really manage it. I will manage the position. if it gets out of whack, particularly for my clients. On my personal portfolio, not so much, because I'm comfortable like holding two stocks or three stocks.

But it is true that if it goes up, it does like a five-ex, I will have to do a little bit of rebalancing. Because the thesis is such a long-term play, and because of the scale is technically infinite, I don't really need to look at it as, you know, like this is going to grow up until 50 bucks or like, I don't know, like 5 billion, and then it's going to stop growing.

Like, if it goes down, if it goes up to like 2 billion in valuation, there's literally nothing impeding it from going to like 20 billion. There's no barrier there. So, yeah, other than trimming, not to like become a 50% position, I won't really adjust it. Let's move on to the portfolio construction because this is the topic I want to wrap up this interview and I think it fits well. How do you think about portfolio construction

and what is your framework there? Super, super simple. If I don't want to put 5% of my money into an idea, it's not worth it. And then I do 5% to 10% positions. In a very, very extreme case, I will add a little bit at cost if it's at 15, but that's extremely, extremely rare.

It has to be, you know, there has to be a very short-term catalyst. So I will put at least 5% of my money and up to 10% of my money into a single idea in a given time, which provides for like 10 to 20 companies in the portfolio. The 5% is usually by themselves, they'll scale or they will go down to, you know, whatever percentage. I do manage, for example, my portfolio right now. The highest loss is like 44% loss. And that's the opposition. that's about 4% of my portfolio so technically it was like 7% at the beginning and the highest

win which i recently cut is probably lemes which is 168% gain which i cut recently just because i needed some funding for for some other ideas but once again the range of it is very very very large. How does Cardlittics fit into this framework? And how will you handle it in the future if it's 7X with

one year? I wish that. Hopefully that'll happen. Carlitics is a barrier and it's called convertible debt. So if you get to, I think it's low 20s, like 23 or 24 bucks.

I can remember the exact number right now. It triggers the convertible loan, and it'll lead to dilution for the company. So there's sort of like a ceiling at 24. Once it goes beyond 24 or 23, you don't really have a ceiling. Let's call it a pit stop of sorts. So if it gets around that mark, I will probably sell a little bit just because I know there's going to be short-term dilution. Other than that, I won't really touch it.

In my personal portfolio, I think it's like 17% in my client's portfolio, it's a little under 10% right now. Hopefully, it'll, you know, once again, seven X would be marvelous. And I will have to face that challenge. But it's one of those challenges like paying taxes. You know, it's something you want to do because it means that you want. How is your portfolio construction framework different to other things you found at the marketplace and how it adds value to you as a,

a small cap manager? Managers, particularly managers in small caps, they tend to build indexes, essentially. So you have people managing like 100 stocks. Other than Peter Lynch, I haven't really seen anyone manage that amount of shares. I think we each got like to a thousand stocks, actually, which is crazy. I haven't really seen anyone actually manage that. and perform differently from the market within a very, very small range. The idea of concentration and the idea of having certain clients that enable me to

hold on for relatively long periods of time is that we don't only benefit from short-term catalyst because the positions are substantial, but we also benefit from having the ability to hold on. So holding on plus short-term catalyst usually equate to multiple X returns. So the highest thing, for instance, that I recently sold. Well, the two best examples are probably Expell and then Carvana. Carvana I held for a fairly long time and it was about the 10x for me. Expell I held from 15 all the way to like, I think the average sale price was like 75. And those two were really good examples of short-term catalyst plus long waiting periods. Why?

Because, for example, for Expel, the stock rose a little bit. It barely did nothing for like a year, a year and a half because of COVID and all that good stuff. It moved up and we were winning. But the real catalyst made it so that it went from like 100% return in a few days to like a 700% return. And that's sort of how I frame it. 700% return when you have a 1% bit or like a 0.5% bit can mean nothing or can mean a very, very tiny alpha.

But if your bet is 5 to 10%, it is very substantial. I'm done with my questions. Do you want to add anything for the end of the interview? We haven't discussed. Well, I love to sort of give the opportunity for everyone listening to check out all of this stuff. I publish mainly two things in The Hermit. And those are updates on the portfolio where I give about a 20-minute rundown of everything that has happened in the past month, every change I've made, the reasoning why. If I bring up a new company, I'll give you like a meaning thesis.

And by mini thesis, I mean at least 10 minutes of me pointing out the data and why I'm doing certain things. And the second thing I do is write-ups. I do write-ups that are at the very least 30 minutes. It goes all the way up to 50 minutes in some cases that include like CEO interviews, CFO interviews, things that are out there in most of these cases. but people just don't pay attention to, and they're extremely, extremely interesting. I'll give you a very, a very pressing example, which I've recently invested in, a company called DACO. DACO is a Chinese company listed in the New York Stock Exchange, and just for the sake of bare

information, they're trading at, I think, a market cap of $1.3 billion, and they have about $2.3 billion in cash. So it's, I'm not going to say it's a free stock. But, you know, you're paying below cash in the billions and in a listed, in a listed company in the U.S. You, of course, needs to understand the industry. You do need to understand polysilicon and how that works, both in terms of demand and supply. And there's complexities to it, but I lay it all out in very, very simple terms. I will lay it out at least in, I think, early March, the first week of March.

And that sort of situation, which doesn't happen frequently, it is worth your time. because that company can 10x in the next 10 years. Thank you very much. I'm happy to link your substack. Thank you very much. In the YouTube video and transcript. And then thank you for your time. And bye-bye to the audience.

Bye-bye. Thank you very much, guys. I really hoped you enjoyed this conversation. If you did, please leave a like and a comment and for sure subscribe to my channel. Traditionally, I want to close this conversation with the disclaimer. So here you can find the disclaimer. It says, please do your own work. This is no recommendation.

What we are doing here is just a qualified talk that helps you, but it's no recommendation. Please always do your own work. Thank you and hope to see you in the next episode. Bye bye.