Thesis

The Ukraine war started a domino effect that will cause deglobalization. Manufacturing will move to North America, Europe’s manufacturing will be dead, global food shortages will increase, China will breakdown, and energy costs will be high. All while we deal with climate change and demographic collapse.

North America will be the largest beneficiary of this new world, and we are vested in its growth. America’s advanced manufacturing, healthcare research, and technological prowess, Canada’s natural resources, and Mexico’s mid-market manufacturing will lead to the largest industrial growth we have seen since World War 2. We invest in equities that have the capabilities to seize the immense opportunities that this will provide.

Strategy

We are value investors looking to follow in the footsteps of Warren Buffett, Charlie Munger, Peter Lynch, John Malone, and Mark Leonard. We make long term, buy and hold equity investments in cash flow generative businesses.

• Made, Refined, and Extracted in North America. North America will be the place to be in the 2020s. As other countries become debt burdened with aging populations, North America will still be growing.
• Free Cash Flow. We invest in businesses that generate meaningful free cash flow that is returned as share repurchases or dividends.
• Return on Equity. We look at how well a company reinvests its retained earnings to generate a meaningful return over a period of time.
• Debt to Equity / Return on Invested Capital (ROIC). We are in a period of high interest rates as inflation will be consistently high. Companies that are heavily leveraged will be at a disadvantage. We invest in companies that are have a low debt to equity ratio and are able to generate a high return on invested capital with that debt.
• 7 Powers. We invest in businesses that are price inelastic and have high competitive moats using the 7 Powers analysis.