Over the long-term, the price of a security will reflect the intrinsic value of that asset. However, today, many firms are only looking out next quarter or next year leading to long-term compounders often being undervalued by the stock market. In the world of value investing we call this “time arbitrage”.
Due to our structure as a boutique investment manager, we are able to invest in parts of the stock market that larger firms cannot touch due to size and liquidity constraints. By turning over these stones, we believe there’s a higher chance of stock market inefficiencies in this space.
We Eat Our Own Cooking
Granite State Capital Management invests alongside clients. We also put our clients ahead of us, meaning we buy last and sell last.
No Management Fees Option
For qualified investors, we offer the option of making money only from a performance fee.
We Despise Index-Hugging
Many large firms practice what is known as index-hugging by which they own a diversified basket of stocks that roughly mimics the index. A portfolio like this is almost surely to do average over time. However, these asset managers also charge a fee for something that can be done through a low cost ETF. At GSCM, we tend to be more concentrated and only invest in our best ideas. We believe this offers significantly higher risk-adjusted returns than owning a large over-diversified basket of stock.