Dave Waters of Alluvial Capital Management, LLC stops by The Business Brew to discuss how he approaches investing. You can find all his letters, partnership info, etc., at https://alluvialcapital.com/
Dave primarily focuses on investments that you probably haven't heard of. He invests in illiquid securities, foreign securities, companies coming out of bankruptcy, and more. His portfolio is as unique as his path to investing.
We hope you enjoy the conversation.
Sponsor Info:
Daloopa is founded by a former hedge fund analyst to bring simplicity into the investment process. Daloopa offers an AI driven single source for all company reported data, and allows for investment teams to make the most informed decisions in the shortest amount of time.
Daloopa scales the velocity of an investment team’s idea gen. Analysts spend less time locating and manually inputting meaningful disclosures into Excel and more time synthesizing in the minutes after the print. Daloopa captures data from all company reported sources, including from footnotes, MD&As, and investor presentations. Our data sheets include GAAP to non-GAAP adjustments, guidance, and all company specific KPIs. Each datapoint is auditable to the source for easy verification and accuracy. Daloopa’s Excel plugin can also update your existing models for the latest quarter in just a single click. Bulge-bracket banks and major multi-managers are trusting Daloopa for use in initiating coverage, building and maintaining industry dashboards, and keeping their models up to date.
Visit Daloopa.com/BusinessBrew to create a free account and learn more about how Daloopa can help increase your team’s speed to differentiated insight.
Detailed Show Notes:
6:45 – Why Dave likes to look at obscure areas of the market
10:30 – When Dave found P10 Holdings
15:30 – Why your threshold for buying needs to be higher in microcap
21:15 – Rebuttable presumptions against microcap companies and the need for cheapness
23:00 – How Dave got interested in Garrett Motion
35:30 – Assessing incentives
41:50 – Community Development Financial Institutions
43:40 – What got Dave interested in investing
54:00 – Are microcaps destined to underperform?
59:30 – Potential risks and rewards around international investing
1:08:00 – Using subsidies to your benefit
1:10:40 – SPV banter
1:19:00 – Where Dave sees himself in 10 years
