Takeaway.com – August 2018

Takeaway.com

This month we will take a deeper look at our investment in Takeaway.com (“Takeaway”). Our thesis provides a good illustration of what Somar looks for in a long investment:

  • Order of magnitude growth opportunity driven by material improvements to the available customer value proposition
  • Highly attractive and defensible business model
  • Capable and strongly aligned management team
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Keys to Successfully implementing a short idea – July 2018

Keys to Successfully implementing a short idea

On its surface, successful shorting may seem like a simple mirror image from buying a stock: you find a company whose moat and financials are being impaired[1], short it at an unsustainably high valuation, wait and then cover your position at lower price to lock-in your profit.

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Incumbents, Disruption, and Short Opportunities – June 2018

Incumbents, Disruption and Short Opportunities

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction”
Bill Gates

“You can resist an invading army; you cannot resist an idea whose time has come”
Victor Hugo

“Your margin is my opportunity”
Jeff Bezos

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Somar Turns 2 Years Old – May 2018

Somar turns 2 years old!

The first two years have been an exciting journey for Somar. As we start our 3rd year we are very excited to continue to improve the quality of our portfolio, taking advantage of the large opportunities in front of us.

This month, we thought it would be good to hear from the team directly through a video. You can find it at: https://youtu.be/SyWZsbcJ6iU

Our Process to Evaluate Investment Opportunities – April 2018

Our Process to Evaluate Investment Opportunities

“You should never take more than you give
In the circle of life”

Elton John – Circle of Life, Lion King Soundtrack

 

The focus on creating more value than that which you capture is core to Somar. We believe we can deliver our investors a level of excess return vs. the risk they are taking that far exceeds the amount they pay us in fees. As an organization, we are focused on elevating and growing our employees to accelerate and upgrade their careers. As an investor, we partner with businesses that are creating more value for their customers than their competitors.

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Drawdown: Part II – March 2018

Drawdown – Part II

In March we didn’t protect the downside as well as we did in February. Most of our losses in the month came from our European long book. A lot of our high conviction names declined significantly amidst the volatility and the absence of news post earnings season. Our work during the month indicates the thesis is very much on track with substantially all our high conviction positions. Therefore, we remain very confident for the performance of our portfolio going forward.

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Drawdown – February 2018

Drawdown

The past few weeks have brought with them volatility that has not been seen for 2 years. With that, you may be wondering how your portfolio fared during this period. While the S&P 500 saw a drawdown of -10.44% between January 29th through February 8th and the Eurostoxx50 went down 7.43%, Somar’s performance was -3.07%. At no point was Somar’s performance negative for the year, unlike the S&P 500 which reverted back to November levels (please see the table below for more information.)

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Value Creation – January 2018

Value Creation

At Somar we believe the next few years will come to be known as the Golden Age of Investing (see June 2017 letter). Around the world, the current breadth of innovation compounded by accelerated consumer adoption is creating abundant opportunities for entrepreneurs to offer their customers a step-change improvement in value proposition. Entrepreneurs can then capture part of this value created. Somar investors will share in this too when we partner with the winning entrepreneurs at a sensible valuation.

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What to expect in 2018 – December 2017

What to expect in 2018

It’s tough to make predictions, especially about the future” Yogi Berra

I follow the Noah rule: predicting rain doesn’t count; building arks does” Warren Buffett

At Somar we are excited for 2018. Not because we can accurately predict how the year will unfold. But because throughout 2017 we have focused on what we can control.  In 2017, we set out to build an extremely high-quality portfolio for 2018 and beyond. We like our chances under a wide range of scenarios. In 2018, we will continue to relentlessly search for opportunities to upgrade our portfolio. We see a lot of innovation delivering step improvements in customer value propositions.

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Year in Review – November 2017

Year in Review

The end of a year marks a period of reflection for what has been accomplished, and preparation for what is to come. As we look back at 2017, we feel very good about the progress we have made. We have upgraded our portfolio, developed our team, launched new Data Science projects, reduced fund costs, and built strong constructive relationships with the management teams of our portfolio companies.

Some of the highlights of the year include:
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