Bares Capital Management

“Unless that's an overt part of the plan, and we have underwritten as part of that plan the ability of the people to do M&A successfully, it's typically a red flag for us that this is not going to end well.”

“We have made certain attempts at trying to score these various things quantitatively, and every time I try to layer a quantitative element onto this qualitative process, it sort of backfires for us, and so we've stopped doing that.”

“If you look at the numbers, we're actually roughly about 30% turnover. So it's thinking in a 10 stock portfolio about three new positions per year.”

“We say 30% is our hard cap. And so nothing gets over 30% of the portfolio by weight will automatically start scaling it back.”

“I mean, 10 equity managers, each holding a hundred stocks, charging one percent, you're charging active fees and getting passive results. It's ridiculous. And so everybody should be concentrated.”

“Little known fact about my firm is for the first nine years, I didn't have an attorney. I was just so frugal that I didn't want to pay for one, which was, I do not recommend to people. I think it was completely reckless. Course of action. And now we have great…”

“I think a lot of endowments take the approach that we only invest with single strategy firms. And I get that, but I would argue vehemently against that. I think there's been huge benefits to us having the various strategies and the benefits are to both us and …”

“Whether it's something, 60 cents on the dollar, 80 cents, or even 120 cents on the dollar, if it's the right business run by the right people with great growth prospects, the default setting here is just to hang on to it.”

“Our batting average is like 65%. That's been a historical sort of win rate”

“We actually do, despite the quantitative aspects of my old firm and my math background, we do no computer screening or filtering. Like we started from A and went to Z and microcap. It took us eight years, but we did it.”

“The evidence is that after eight stocks, you're 80% diversified, right? So the 50th name in your portfolio is doing nothing to get you more of the free lunch, right? I mean, it's just a exercise in gathering assets to get more asset based fees for a manager.”

“And it is impacted my business life because I've had some business success and I haven't enjoyed it because I'm constantly thinking about the downside, the risk management or the future planning or the future optimization. So I know it's kind of an unusual ans…”

“So everything that we pre-qualify for purchase is done without any knowledge of what the stock price is or has been.”

“Over 20 years, we've never had a formal sales and marketing effort. We don't have any, you know, institutional sales people on staff or anything, and we closed one out of every three conversations we had with institutional allocators back in 2000”

“All the capital that was ever put into my firm is 21,000, but 195 dollars and 14 cents is all the paid in capital.”

“So we have a rotating stable of junior analysts. So we hire people and put them to work and then tell them in three years, I got to go find different employment. Part of that is because we have a capacity limited set of strategies and that capacity limitation …”