“Anyone can see the pinecones in the tree. None can see the trees, none can foresee the forest in the pinecone.”

— Mark Spitznagel, The Dao of Capital

What is a Quality Investing approach?

Quality Investing centers around the idea of investing in companies displaying superior business characteristics. While some characteristics may be financially driven such as the strength of the balance sheet, others might lean more qualitative such as management capabilities.

Although somewhat simplistic in its definition, in practice it is difficult to pin down. Accounting idiosyncrasies, market sentiment, unknown future economic headwinds, etc. all serve to make this anything but a simple endeavor. But, due to this, it is an approach that is not possible to automate and it remains a persistent area of the market where one can identify superior returns.

Additionally, we add a key tenant from Value Investing and look to invest in Quality businesses at prices below what we believe the intrinsic value to be. In short, we want highly attractive businesses at a great price.

Quality as a philosophy, not a methodology

Identifying opportunities selling below their intrinsic value, is the ultimate goal regardless of the investment vehicle under consideration.

While the calculation, form, or path to value may evolve over time its substance does not.

Accurately identifying where value may lie, quantifying how much and defining a path to acquiring or releasing it requires a lifelong learner philosophy rather than a static methodology.

Productive capital allocation, a core principle from Austrian Economics, underlies everything we do.

Although customer preferences may ebb and flow, technology may usher in a new paradigm shift or money may become easier or tighter depending on the decisions of central bankers, the constant or absolute law of progress hinges on the deployment of capital into productive uses.

Any prolonged malinvestment, or allocation towards unproductive uses, erodes progress and growth.

As we are ultimately long civilization, we look to find those areas where capital might be, and is being, deployed productively.

Temperament as an advantage. We do not subscribe to the idea that markets are efficient. They may be approximately, or nearly efficient, but not perfectly.

If this were the case the volatility of prices, which should reflect underlying earnings, would not be 10x the volatility of those earnings.

While equilibrium as a concept is constructive, so long as humans are involved it is something that the real world moves through but never settles on.

Human behavior may indeed be the only constant arbitrage.

The New West Capital Blog:

The goal of the blog and newsletter is to provide resources that will be helpful in formulating a deeper understanding of proper investing and life decisions.

Or, at the very least, be entertaining.

Topics range from broad thinking concepts, the investing approach, macro topics and beyond.

Kyle Tushaus - Managing General Partner

Kyle Tushaus manages New West Capital, which oversees investments in public securities modeled after the original Buffett Partnership fee structure and focuses on long term quality as well as corporate action investments.

Prior to founding New West Capital, Kyle spent time as an engineer in the energy industry before moving into acquisition roles for private family offices and real estate companies.

Having always been a student of the value and quality schools of investment thought, New West Capital was launched as a vehicle to pursue such investments in an incentive aligned manner while holding a long-term view without the influence of career risk.

Kyle graduated from the University of Kansas with bachelor degrees in Mechanical Engineering and Finance, is actively working towards a CFA designation and lives in Lisbon, Portugal with his wife and daughter.