This article is excerpted from a letter by MOI Global instructor Michael Shearn, portfolio manager of Compound Money Fund, LP.
One of the biggest mistakes we made in 2017 was under-allocating to Shopify, Alibaba and Arista Networks. We knew they were bargains due to their growth prospects but were just not ready to pay high multiples. We allocated from 2.5-4 percent of the portfolio to each of these positions because our hope was that we could buy these holdings at lower prices in the future. This didn’t pan out and these positions went on to increase in price 2-4 times from our initial purchases.
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About The Author: Michael Shearn
Michael Shearn founded Time Value of Money, LP, a private investment firm, in 1996, to devote his attention to selecting and researching stocks and private investments. He launched the Compound Money Fund, LP, a concentrated value fund, in 2007. Shearn serves on the Investment Committee of Southwestern University, which oversees the school's $250 million endowment. He is also a member of the Advisory Board for the University of Texas MBA Investment Fund. Shearn graduated magna cum laude from Southwestern University, a small liberal arts college in Georgetown, Texas, with a BA in business, with an emphasis in accounting and finance. He lives with his wife and two daughters in Austin, Texas.
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