In his latest Q2 2021 Market Commentary, Connor Haley explains why Alta Fox is creating a “Wall of Fame” that will include ultra-successful value creators. Here’s an excerpt from the commentary:
Another common theme among our less successful investments to date has been investing alongside management teams that lacked sound capital allocation judgment. While past performance may not be indicative of future results, we have found a management team’s history of value creation in the public markets and prior endeavors to be highly correlated with future stock price performance.
While it is always possible that a management team with a history of mediocre to poor capital allocation will suddenly improve its strategic decision-making, we have found this outcome much harder to predict.
At Alta Fox, we have dedicated a significant amount of time to studying greatness in public markets—the extreme outliers. Last year, we released our “Makings of a Multibagger” research, which studied some of the best-performing stocks over the five-year period from June 2015 to June 2020.
More recently, we have allocated our case study time researching perennial value creators: CEOs that simply seem to succeed everywhere they go and create value well above their cost of capital and industry peers.
We are in the process of creating a “Wall of Fame” in our office that will highlight some ultra-successful value creators.
The display will serve as a reminder of the importance of management quality and will inspire our team to carefully be on the lookout for the next CEO worthy of a place on “The Wall.” We look forward to revealing some of the CEOs we are invested alongside that have earned Alta Fox “Wall of Fame” status through future letters and shared research.
You can read the entire commentary here:
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