Dorsey Asset Management

“The endowment and foundation community as one that not only doesn't fear concentration, but also is generally more willing to take a bet on people early in their careers because they realize often when you're smaller, that's when the best returns show up.”

“The biggest one is you can never set the bar too high in terms of the quality of the business or the quality of the management team. Most of our errors have come from compromising on one of those two, that either we thought this was an A business and it turned…”

“Our largest position right now is ASML, a monopoly in a key part of the semiconductor value chain.”

“Most of our sales have come because we got it wrong. The thesis was wrong. Management did something we didn't expect, or we thought they were better capital allocators than they turned out to be. The bulk of our sales have been driven by errors that we needed …”

“If you think about a luxury brand, that's more consensual. I'm not wearing a Rolex because it tells time better. It's because I want people to know I have money. I'm signaling something, but that signal value is only useful if everybody else agrees that a Role…”

“You can never be too transparent. That's the biggest lesson. I've met investors who won't write about positions. You have to pry information out of them about the companies that they own. Clients don't like that. Somebody investing with you as a manager, they …”

“When Dorsey Asset launched in 2014, I was probably 60, 70 moat and 30 management. So you want to weight things, and I'm probably the reverse today. That's largely because I've seen just how poorly people can behave and how much damage they can do to even a gre…”

“We tend to do a lot of offline Q&A on memos because I find that it makes the meeting more robust and more discursive and more of a back and forth because you're not asking, oh, I didn't see what segment margins are for that thing. What was that write off in 20…”

“Our max size is 15. There's no magic to that number. That means that maxed out, we'd be about eight stocks. We've historically owned between 10 and 15. Fifteen's a hard number, one in, one out.”

“If managers talk about the company as if it's them, as if they own the company, instead of owning a half a percent of it via options, which is usually the case, that's usually a bad sign, because that means they're more aligned with themselves than with extern…”

“Sometimes it's the personal comfort level, because at the end of the day, when the numbers are flashing red and the news is bad, I've got to make a decision. That's my job. If I don't have a good feeling about the business, if there's something nagging at me a…”

“B to B businesses, you can talk to a dozen customers, and if you get a similar story about the value of the product or service, you can be confident that you're going down the right track. Consumers, you would need to do larger surveys, larger sample sets, and…”

“The CEO in that case was successful, but for a founder, he largely had sold stock along the way, so he didn't retain a large ownership stake in the company. If all that spend and competing with Zillow didn't work out, shareholders were probably going to suffer…”

“If I've got a choice between company A, that is constantly giving me back the money, and then I need to go reinvest it in a super competitive public equity market, or company B, which can plow it back into a 20% return capital internal project, the math is obv…”

“Today, we Tend to use multiples as our primary touchstone and do a three-stage DCF as a backup to see where there are differences.”