Frequently Asked Questions (FAQ)
What is deep value investing?
Deep value investing focuses on buying stocks that trade at a large discount to conservative intrinsic value, often measured by tangible book value, liquidation value, or normalized cash flows. The strategy emphasizes margin of safety, downside protection, and asymmetric upside rather than forecasting growth or market timing.
How is deep value different from traditional value investing?
Traditional value investing may focus on fair value and quality at reasonable prices. Deep value goes further by targeting extreme mispricings, often in obscure, neglected, or distressed situations where pessimism is excessive and prices already reflect worst-case assumptions.
A more detailed description of how I view deep value investing can be found in this section.
Is deep value investing still relevant today?
Yes. Deep value continues to work because markets remain inefficient - especially in microcaps, illiquid stocks, special situations, and underfollowed markets. Institutional constraints, forced selling, complexity, and behavioral biases still create mispricing.
What did the early Buffett partnerships focus on?
In his early partnerships, Warren Buffett focused heavily on deep value and special situations (also called work-outs), often buying stocks at large discounts to book value or liquidation value. Buffett has stated that returns of 50%+ were achievable at small scale due to abundant inefficiencies - conditions that still exist today in obscure markets.
Do you only invest in “dirt cheap” stocks?
No. While I actively invest in asset-backed bargains, net nets, and statistically cheap stocks, my approach has evolved to also include mispriced quality businesses and compounders when the price offers sufficient margin of safety. Price always matters, but quality increasingly does too.
You might want to read more about my investment philosophy here.
What role do special situations play in your process?
Special situations are a core part of my strategy. These include spinoffs, rights offerings, restructurings, post-bankruptcy equities, tender offers, and thrift conversions. Such cases often involve catalysts that can unlock value independently of market sentiment.
Why focus on obscure and thinly traded stocks?
Obscure and thinly traded stocks are often ignored by analysts and institutions due to size, liquidity, or complexity. This neglect allows mispricings to persist longer, creating opportunities for patient, independent investors willing to do their own work.
Isn’t illiquidity risky?
Illiquidity can increase short-term volatility, but for long-term investors it can actually reduce competition and improve returns. Real risk is permanent capital loss - not price volatility. Illiquidity is often the price paid for accessing true inefficiencies.
How do you think about risk?
I define risk as the probability of permanent capital loss, not volatility. I focus on balance sheets, asset coverage, cash flow resilience, and margin of safety. This is closer to how a private business owner thinks about risk than how markets measure it.
Do you try to time the market or macro conditions?
No. I do not attempt to forecast interest rates, macroeconomic cycles, or short-term market movements. My edge lies in valuation discipline, patience, and independence, not prediction.
Where do your ideas come from?
Ideas are sourced globally from obscure exchanges, microcaps, corporate actions, forced selling situations, and neglected balance sheets. Many of the best opportunities exist where information is available but ignored.
Who is this newsletter for?
This newsletter is for investors interested in deep value stocks, special situations, early Buffett-style investing, and overlooked opportunities - and who are comfortable thinking independently, being early, and holding unpopular positions, but securing ones principal and aim for high double-digit returns. You can read more about what the newsletter is for here in my ‘‘About’’.
Are the investments discussed financial advice?
No. All content is for educational and informational purposes only and reflects my personal research and opinions. Readers should conduct their own due diligence before making investment decisions.
Do you share your portfolio or give specific investment advice?
I’m always happy to discuss ideas, frameworks, and answer questions in the comments or chat. That said, I generally avoid telling people exactly what to buy or sell. Everyone’s situation, risk tolerance, and time horizon are different - and I’m not a registered investment adviser.
The goal is to help readers think independently and improve their own decision-making, not to outsource it, although I might go for a full partnership one day.
Who are you and what is your background?
I’ve worked professionally in finance, including roles within the financial industry, private equity, and as a Big Four auditor. I’m also a member of Micro Cap Club, a community known for deep fundamental research and disciplined value investing.
My writing is influenced by classic value investors such as Benjamin Graham, Warren Buffett (early partnerships), Seth Klarman, Joel Greenblatt, and Peter Lynch, with a focus on deep value, special situations, and underfollowed stocks.
I recommend also reading my more detailed background.
How often do you publish and what’s your approach to content?
I prioritize quality over quantity. I don’t publish on a fixed schedule, and I won’t post simply to feed an algorithm or create activity. I write when I have something meaningful to say - not because I feel pressured by hidden incentives or engagement metrics.
The same applies to investment ideas. I won’t share a long list of mediocre ideas just to appear active. If an idea doesn’t have real substance, downside protection, and genuine upside (“hair on it”), it doesn’t belong here.
I view subscribers as a long-term partners, not an audience. That means being selective, transparent, and honest about what I find compelling - and just as importantly, about what I don’t.