Get Your Weekly Digest

Receive the best podcast summaries and insights delivered to your inbox every week.

We respect your privacy. Unsubscribe anytime.

We Study Billionaires - The Investor’s Podcast Network

TIP755: My Process for Finding Great Investments w/ Kyle Grieve

Published September 21, 2025
Visit Podcast Website

About This Episode

Host Kyle Grieve shares his personal investing philosophy, tracing how early speculative losses in cryptocurrencies led him toward disciplined value investing in equities. He explains his return goals, focus on absolute rather than relative performance, a two-bucket framework (quality compounders and microcap inflection-point stocks), detailed criteria for evaluating management and capital efficiency, and his sell and portfolio management rules. Kyle also covers concepts like circle of competence, behavioral biases, environment design for inaction, and reflects candidly on mistakes of commission and omission to illustrate how he continues refining his process.

Topics Covered

Investing Value investing Compounding Return on invested capital (ROIC) Serial acquirers Decision making Behavioral economics Circle of competence Capital allocation Microcap investing

Disclaimer: We provide independent summaries of podcasts and are not affiliated with or endorsed in any way by any podcast or creator. All podcast names and content are the property of their respective owners. The views and opinions expressed within the podcasts belong solely to the original hosts and guests and do not reflect the views or positions of Summapod.

Quick Takeaways

  • Kyle aims to double his capital every five years, focusing on absolute performance rather than beating any specific index, and uses this aggressive hurdle to filter for potential multi-baggers.
  • His framework splits holdings into two buckets: high-quality compounders with durable moats and strong ROIC, and microcap inflection-point businesses showing rapid revenue and earnings growth.
  • Management integrity is a non-negotiable factor; if he questions honesty or alignment, he sells rather than hold a company he would never be comfortable adding to.
  • He sells for only three reasons: a clearly better opportunity, the price running five to ten years ahead of fundamentals, or a broken thesis (often identified by persistent fundamental deterioration).
  • Portfolio management emphasizes concentrated positions, averaging up into winners, and allowing outstanding holdings to grow beyond 20% without trimming solely for size.
  • Kyle uses owner's earnings and operating results, not short-term price moves, as his primary metric for tracking the performance of his businesses.
  • He actively engineers his environment to reduce noise and impulsive action, avoiding financial TV and filtering social media, while using alerts in a controlled way.
  • Circle of competence, Bayesian updating, and "strong opinions, weakly held" guide how he learns new industries, updates theses after each quarter, and decides when to admit mistakes.
  • He prefers understandable, often mundane businesses (like manufacturers, discount grocers, or water treatment firms) that intelligently use technology and automation over exciting story stocks.
  • Reflecting on mistakes of omission and commission, he focuses less on missed upside and more on systematically reducing repeated errors and self-sabotaging tendencies.

Podcast Notes

Introduction and overview of Kyle's investing philosophy

Recent performance and focus on process

Kyle reports his portfolio has compounded at 18.7% annually since 2020 versus 17.8% for the S&P 500 over the same period[0:02]
• He stresses that the key outcome is not outperformance itself, but developing a consistent, repeatable philosophy for compounding capital over many years and decades
Episode will cover process, failures, and framework[0:22]
• He plans to share a painful early lesson as a speculator, his simple return goals, why he ignores benchmarks, and the details of his current framework
• Topics include thinking like a business owner, two categories of investments, management integrity, sell rules, and methods to guard against biases

Host introduction

Kyle introduces himself and context for his philosophy[1:59]
• He is the host, Kyle Grieve, on The Investors Podcast, and will dedicate this episode to sharing his investing philosophy
Learning from top investors and books[2:08]
• Kyle has learned from industry top performers through interviews and by studying lessons from great investing books
• He has absorbed a large amount of information from many of the best investors to ever do it

Early investing history and cryptocurrency speculation

First risk assets in cryptocurrency

Kyle's initial foray into risk assets was crypto in 2017[2:36]
• Bitcoin ran from about $3,000 to $20,000 between July and December 2017
• Kyle was buying various altcoins and quickly quadrupled his capital, which he attributes entirely to luck
Shift into technical trading and leverage[3:32]
• He studied technicals and became attached to Ichimoku Clouds as a preferred indicator, using them to justify trades
• He made leveraged bets on one-minute charts and went long and short based on those cloud signals
• He now views this as silly and embarrassing, noting he knew nothing about value investing versus speculation at that time
Massive losses and lessons from crypto[3:52]
• He destroyed about 97% of his crypto assets over a very short period
• Key lessons: be wary of technical indicators, do not use leverage, buy assets you understand, recognize downside risk of actions, and avoid shorting

Transition into stock investing during COVID-19

Re-entering markets in March 2020

Trigger to start investing in stocks[4:46]
• In March 2020, while in a hotel lobby for work, he read a newspaper noting markets had dropped about 23% over a short period
• He had a strong intuition that this created opportunity, opened his first stock brokerage account, and began investing
Discovering value investing via YouTube[4:38]
• YouTube introduced him to value investing concepts like price versus value, competitive advantage, and why some stocks are cheap or expensive
• Lockdowns gave him lots of time, which he spent with his dog, girlfriend (now wife), investing books, and annual reports

Realizing importance of managing his own capital

Prior experience with bank-managed funds[5:25]
• As a teenager, he let the bank manage his money and later noticed low single-digit returns and bank underperformance versus the index
• He saw how much the bank earned while underperforming and concluded no one would care about his capital as much as he would, motivating him to manage it himself

Early COVID-era stock investing and similarities to crypto period

Environment where many assets were cheap[5:55]
• After the COVID crash, many assets traded with good margins of safety and high upside, making it hard to lose money if buying near the lows
• He recognized that earlier crypto losses were fresh and was already sold on long-term investing and compounding, reducing the temptation to trade rapidly
Early lesson in compounding from his uncle[6:12]
• His uncle, a successful real estate agent, highlighted Canadian banks as strong long-term investments via dividend reinvestment over decades
• He was told to look at RBC; one of his first stock investments was TD Bank, though he later judged its likely earnings growth around 8%, below his eventual hurdle

Early stock portfolio composition and cloning experiences

List of first stock investments in 2020

Varied holdings acquired in 2020[6:50]
• He bought Chorus Aviation, Air Canada, Alibaba, Aritzia, Micron, Twitter, Banco ZK, Inmode, Bausch Health, Sangoma, and Seritage Growth Properties
• He describes this as a "hodgepodge" of different investment types, reflecting varied theses and influences

Rationale behind specific early picks and cloning outcomes

Country growth narrative and company-specific appeals[7:10]
• Alibaba appealed due to China's high growth narrative and expectations of leading global GDP growth
• Aritzia interested him because of strong pre-pandemic growth, a successful pivot to e-commerce, and continued product demand despite fewer people going to work
Cloning other investors: Banco ZK, Seritage, Micron, Bausch[7:49]
• He cloned Banco ZK from Phil Town, viewing it as a well-run bank despite a short report about loan riskiness
• He cloned Seritage Growth Properties and Micron from Monish Pabrai; they were not home runs, teaching him to be selective about which ideas to clone even from great investors
• He cloned Bausch Health from Francis Chou and Bill Miller as a sum-of-the-parts play; it turned into a complete disaster for him
Impact of small capital and no leverage on early mistakes[8:29]
• Even with some losers in 2021, his small capital base and lack of leverage limited damage to his compounding ability

Return goals and focus on absolute performance

Aggressive goal: double capital every five years

Meaning of the goal and investment implications[8:49]
• His explicit goal is to double capital every five years, implying each investment should at least double over a five-year period
• He recognizes this goal is very optimistic but finds it challenging, fascinating, and highly lucrative if achieved

Positives and negatives of aiming high

Advantages of a high return hurdle[9:07]
• If he's right, he makes money faster, selects significant winners and multi-baggers, and can be more selective, even passing on good but not great opportunities
• Example: he researched OTC Markets Group and judged it an excellent business, but given its premium multiple and growth expectations, he did not think it would beat his return hurdle
Risks of high expectations and growth assumptions[10:24]
• He tends to look for intrinsic value growth above 15%, often via EPS or operating cash flow growth above 15%
• Mistakes arise when he buys companies with very high expectations that later fail to meet them, causing significant multiple compression and uncertain recovery
• He notes markets punish short-term EPS slowdowns (e.g., from 25% to 10% growth due to one-off expense) even if long-term growth is intact, but this matters only when his long-term thesis is wrong

Absolute vs relative performance and index comparison

Ignoring indexes in day-to-day decision making[12:17]
• Since his goal is to double capital every five years, he cares little about relative performance versus indexes; they mainly represent opportunity cost
Psychological issues in comparing to benchmarks[12:34]
• He worries that comparing his returns to an index could introduce bias and lead to mistakes
• His workaround is checking portfolio performance only quarterly, to avoid obsessing about beating an index like hedge funds do
Choosing the S&P 500 as reference benchmark[13:12]
• Though he owns few U.S. stocks and is globally diversified, he ultimately chooses the S&P 500 as his comparison point because it's the primary benchmark most good investors use

Thinking like a business owner instead of a trader

Business-owner mentality and holding through volatility

Ownership mindset toward stocks[12:59]
• He views every stock as real ownership in a business and imagines managers as close associates he knows personally
• This mindset aims to foster trust and patience, giving management a chance to fix things when inevitable problems arise
Goal of minimal turnover and long holding periods[13:41]
• He wants to avoid panic selling and holds himself responsible for portfolio contents and quality
• If he finds himself constantly wanting to sell, it means he is not finding businesses resilient to economic or competitive pressures

Accepting drawdowns in great businesses

Historical drawdowns in major compounders[13:53]
• He notes Berkshire Hathaway has had three 40% drawdowns since 1990, Amazon six 50% drawdowns since 1997, and Microsoft four 40% drawdowns since 1990
• He emphasizes that if there's even a chance a holding is a long-term compounder, he will work hard to keep it despite big price declines

Reducing focus on share price and planning for volatility

Example of a business with rising EPS and falling multiple[14:22]
• He owns a business (unnamed) whose trailing 12-month EPS grew from $2 to $5.50 while the PE compressed from 28 to 10 and the stock price barely moved
• He frequently considers selling it when needing capital, but reframes by asking how he'd behave if there were no stock quote; based on fundamentals he would not sell
Thesis-driven expectations over 2-3 years[14:22]
• For each business he forms a 2-3 year thesis, often in terms of expected EPS growth (e.g., 15% per year) and then tracks reality against that
• If fundamentals meet these expectations, panic-driven stock price drops are irrelevant to his investment judgment

Two-bucket framework: quality businesses and microcap inflection points

Definition and criteria for quality businesses bucket

Portfolio weight and key criteria for quality bucket[15:13]
• As of August 18, 2025, quality businesses comprise about 63% of his portfolio
• He looks for: (1) a durable competitive advantage or moat enabling profitable growth above his hurdle rates for years or decades, (2) talented, aligned management with substantial share ownership, and (3) multi-year ROIC above 15%
Quality as a spectrum and direction of travel[16:39]
• He views all companies on a spectrum from low to high quality and cares most about whether quality is improving, stagnant, or deteriorating
• Even a medium or low-quality company can be a great investment if it is moving up the quality spectrum, while high-quality companies can be bad investments if heading down
• Understanding the direction helps him decide what to cut when freeing capital or improving portfolio quality of life

Management integrity and evaluation framework

Checklist for assessing management[23:28]
• He examines compensation fairness and reasonableness, alignment via insider ownership (open-market buying vs options), and management's historical track record
• He considers whether executives seek the limelight or avoid it, their capital allocation discipline, and the size of insider ownership relative to their net worth
Non-negotiable nature of integrity[25:04]
• Management integrity is his top criterion; any history of questionable integrity leads him to pass or sell
• He describes previous investments where he ignored early integrity questions, later learned more negative information, and ultimately sold because he could not trust or comfortably add shares

Capital efficiency via ROIC

Using ROIC as a quality signal[25:42]
• He wants companies with consistently high and preferably rising ROIC, as this suggests a competitive moat and superior profit conversion from invested capital
• He avoids situations where a single strong ROIC year follows many weak years; he wants a decent multi-year sample for his quality bucket

Microcap inflection-point businesses: criteria and logic

Three main criteria for microcap inflection bucket[26:09]
• He looks for at least two quarters of revenue and earnings growth above 25%, aligned management with substantial ownership, and the ability to earn high ROIC over time
• He may use free cash flow instead of earnings when appropriate, especially where margins are improving and net income is not yet positive under IFRS
Role of founder-led management and ownership concentration[26:21]
• Many microcaps are founder-led with management stakes of 50% or higher, which he often welcomes despite higher going-private risk
• He notes microcaps often list specifically to raise funding, which can reduce near-term going-private likelihood
Fragility of microcaps and importance of leadership[27:44]
• Early-stage microcaps are fragile; without an adaptive leader who can rapidly find profits, they risk bankruptcy or being taken over
• In contrast, more mature companies have established systems that make them less sensitive to management quality, though leadership still matters
ROIC interpretation in inflection situations[27:16]
• Because many inflection-point firms are transitioning from losses to profits, ROIC may be negative or volatile; he focuses on how much it can improve and the odds it reverts

Why combine quality compounders and microcap inflection plays

Role of quality bucket: long-term anchors[27:13]
• Quality businesses, often $1-10 billion market cap but not capped, are intended as lower-turnover, long-duration compounders where selling is mainly about valuation
Role of microcap bucket: rapid mispricing and high growth[27:58]
• Microcaps can grow bottom-line 50-100% and often fly under the radar, trading at mid single-digit forward multiples despite 25%+ growth
• Average microcap market caps are below $100 million, often much lower; turnover is higher because many do not deserve long-term holding
Empirical results from his winners[29:22]
• Of his 10 biggest winners, seven are quality businesses and three are microcap inflection names
• Inflection winners tend to move very quickly in price and often are not held for extremely long periods; quality winners may compound at lower annual returns but for longer

Sell discipline and reasons for exiting positions

Three primary reasons to sell

Explicit sell criteria[32:01]
• He sells when: (1) a better opportunity with superior risk-reward appears, (2) price runs five to ten years ahead of fundamentals, or (3) his thesis is broken
Broken thesis and stubbornness issues[32:13]
• He identifies his biggest losses-Cannabis Capital, Bausch Health, and Alibaba-as cases where he was wrong on the thesis and slow to recognize it
• He is especially wary of stubbornness in microcaps but notes it can damage returns even in large caps
• In the Cannabis case, an abysmal quarter and high uncertainty about returning to prior profit levels led him to sell rather than wait; in hindsight, all three exits were correct

Valuation-based selling: price pulled forward

Adapting Monish Pabrai's "egregiously overvalued" concept[33:28]
• He references Pabrai's idea of selling only when a quality business is egregiously overvalued but notes there is no single definition
• He uses a hybrid framework, influenced by Ian Cassel, to judge how many years forward the price has been pulled before selling (targeting five to ten years)
Example: Aritzia valuation decision[33:58]
• Aritzia, one of his longest and best-performing holdings, frequently tempts him to sell because returns seem pulled forward, though not quite five-plus years, so he continues to hold
• He acknowledges risk that a bad quarter could cause a sharp drawdown but prefers to hold rather than assume he can easily find a replacement with similar potential

Selling to fund better opportunities and counter biases

Ranking holdings and reallocating capital[34:06]
• He ranks holdings from most to least attractive based on future intrinsic value growth; laggards in profit growth go to the bottom and are candidates for sale
• He cites Charlie Munger's advice: the best thing you already have should be the measuring stick for new investments
Guarding against confirmation bias and sunk cost fallacy[34:32]
• To combat confirmation bias, he continually searches for where his thesis might be wrong
• To avoid sunk cost fallacy, he ignores purchase price and focuses purely on current fundamentals and forward opportunity cost, willingly cutting losers to fund stronger ideas

Portfolio management, position sizing, and averaging up

Evolution of his portfolio management from 2020-2021

Fast markets and fear-driven sizing[35:04]
• In 2020-2021, rising markets pushed him to take large starter positions out of fear prices would quickly move away, instead of building slowly within his circle of competence
Case study: Aritzia position growth[37:20]
• He initially bought Aritzia at about a 10% cost basis, but as his capital base grew, this shrank to about 2%, leaving him thinking he might never add again
• Subsequent business improvement and share price corrections allowed him to add over time, making it a large position in both cost and absolute terms

Adopting averaging up in microcaps and beyond

Influence from Paul Andreola[37:49]
• A conversation with Paul Andreola introduced him to averaging up-adding to winners as their price rises-which contrasts with traditional value investors who average down
Using PEG ratios for microcap valuation[38:41]
• He uses PEG (price-to-earnings-to-growth) for growth-focused microcaps, generally viewing PEG < 1 as attractive and seeking ~0.5 for added margin of safety
• Example: a microcap with $0.10 EPS, trading at 4x earnings ($0.40 share price), expected to grow EPS 50% to $0.15, yields a forward PEG of 0.1-a very cheap setup even if growth is half as strong
• He points out that buying at $0.40, $0.50, or even $1.00 can all yield adequate returns if intrinsic value growth is large and the terminal multiple is realistic vs peers

Adding to quality compounders and serial acquirer arbitrage

Challenges of always-optically-expensive quality names[41:27]
• He cites TerraVest as a quality name that has almost always looked optically expensive, making it hard to add only at his original cost basis
• He is willing to pay a higher absolute price at a lower multiple (e.g., buying at 20x instead of 25x earnings) when growth support exists
Serial acquirer arbitrage opportunities[42:18]
• For serial acquirers with low organic growth but strong acquisition-driven EPS growth, he sometimes sees shares underreact to announced deals
• If an acquisition should boost EPS by 20% over a year but the stock only rises 5%, the forward multiple may compress, creating an opportunity to add

Position count, sizing rules, and concentration

Preferred number of holdings

Using a "10 by 10" type framework[46:12]
• He typically holds 8-13 positions, influenced by Monish Pabrai's 10 by 10 idea (10 positions at about 10% each by cost)
• He is comfortable going above 10 holdings if he finds enough good opportunities

Bucket-specific cost-basis sizing rules

Sizing quality bucket positions[47:07]
• He may take a quality business up to a 10% cost basis if it is excellent and continues exceeding expectations
• Typical opening size for a quality business is 2-3%, leaving room to add as his knowledge and conviction deepen
Sizing microcap inflection positions[47:44]
• Microcaps are more volatile in operations and share price, so full-size positions are usually 5-6% by cost at most
• He often starts microcap positions at about 1% and adds as the thesis is confirmed by results

Allowing winners to run without trimming

Comfort with large absolute position sizes[48:12]
• He has no problem with positions surpassing 20% of the portfolio; his largest has reached about 28%
• He does not trim winners purely due to size, likening it to not benching Michael Jordan when he's carrying the team
Performance of top positions[48:12]
• Among his top seven positions, only one has underperformed expectations; annualized returns among the others include figures like 83%, 217%, 31.5%, 30%, 51%, and 20%
• He does not expect extreme annualized rates to persist, but believes these businesses are still improving and will be materially higher in price in coming years

Circle of competence and learning boundaries

Understanding and applying circle of competence

Initial confusion and later clarity[49:14]
• He initially found the concept of circle of competence hard to grasp and was unsatisfied with responses like Pabrai's "to ask the question is to answer it"
• Greater understanding came from reflecting on his own mistakes and reading the first volume of "Great Mental Models" (discussed in detail in TIP 740)
Four-part framework from Great Mental Models[50:05]
• Framework questions: (1) What is your circle of competence? (2) How do you know when you have one? (3) How do you build and maintain one? (4) How do you operate outside of one?
• He notes most of his big losses involved operating outside his circle of competence without adequate learning and risk control

Expanding vs staying within competence

Time and inclination as constraints[50:23]
• He distinguishes businesses he could understand with enough effort from those where he realistically lacks time or desire, and factors that into risk assessment when investing outside his circle
• Buying with incomplete knowledge and unwillingness to learn more is, in his view, putting oneself at significant risk

Geographic focus and home-country bias

Countries he has invested in and lessons learned

Initial global diversification[52:09]
• Living in Canada, he started out investing globally with positions in Israel, Sweden, Poland, Japan, and China, among others
Permanent exclusion of China[52:15]
• He states explicitly that he will never invest in China again; other geographies remain open depending on understanding

Balancing home bias with understanding

Advantages of investing in home country[52:27]
• He understands Canada best and has access to others who can help him understand areas he doesn't know domestically, which is harder for foreign markets
• He gives an example of comparing a Canadian vs Japanese SaaS business; unless he's spent significant time in Japan, he expects to understand the Canadian one better

Measuring performance via operating results and owner's earnings

Why returns are a flawed short-term metric

Insights from Robert Hagstrom and Buffett[53:29]
• Robert Hagstrom in "The Warren Buffett Portfolio" notes that great investors often underperform indexes for short periods, so focusing on price returns alone is misleading
• Kyle quotes Buffett saying he looks at "the change in Berkshire's per-share intrinsic value" as indicated by operating results, not market quotes

Calculating and using owner's earnings

Definition and practical calculation of owner's earnings[54:50]
• Owner's earnings approximate steady-state cash flow, calculated as cash from operations minus maintenance capex
• When explicit maintenance capex is unavailable, he sometimes uses depreciation or 50% of total capex (per Phil Town) as a proxy
Using owner's earnings growth vs 15% hurdle[55:06]
• He computes owner's earnings for each business, reviews last year's growth, and projects the next year's value
• If owner's earnings exceed his 15% hurdle, he considers the business on track and sees little to worry about despite market noise

Designing an environment that favors inaction and reduces noise

Sources of noise and action bias in modern investing

Visual stimuli: screens and charts[55:37]
• Many investors surround themselves with multiple monitors and charts, which amplify noise and encourage action
Alerts, financial news, and social platforms[55:51]
• Financial TV provides constant stimuli that can make investors question their decisions and chase new ideas; apps send real-time alerts that prompt unnecessary trading
• Social media (Twitter, Discord, Reddit, message boards) can present unfiltered ideas, leaderboards, and pressures that nudge investors into reactive moves
Gamification and ease-of-use issues[57:11]
• Some brokerages gamify trading and make buying/selling extremely easy, removing old friction like calling a broker and thereby encouraging frequent action

Kyle's environmental choices to counteract noise

Avoiding financial TV and managing alerts[57:17]
• He simply does not watch financial television, except for occasional clips others share on social media, as he sees no value in it
• He uses price alerts selectively (e.g., large price drops in his holdings) to deploy cash quickly before prices normalize and believes alerts are less harmful to him than to many others
Filtering social information and personal responsibility[57:42]
• On Twitter and Discord, he mutes or blocks unhelpful voices and emphasizes the need to make one's own decisions rather than outsourcing to others
• He estimates that 99% of incoming information requires no action; discernment is crucial

Temperament, Bayesian updating, and stupidity reduction

Behavioral edge over IQ

Relying on temperament rather than high IQ[58:47]
• He does not consider himself to have an above-average IQ and instead seeks a behavioral edge through rationality and self-audits
• He agrees with Buffett's view that success in investing depends more on temperament and controlling urges than on raw intelligence, once basic intelligence is present

Bayesian updating and "strong opinions, weakly held"

Quarterly thesis updates[59:18]
• Each quarter, when a company reports earnings, he updates a three-year probability-weighted return model, shifting probabilities between bull, base, and bear cases
• Multiple strong quarters may shift weight toward the bull case; emerging issues shift weight toward base or bear scenarios
Adopting "strong opinions, weakly held"[1:00:02]
• Citing Paul Saffo, he endorses having strong enough opinions to justify investments but remaining ready to let them go when facts change
• He warns that investors who are too egotistical to admit and act on being wrong will not last long

Stupidity reduction and learning from mistakes

Charlie Munger's approach to avoiding standard stupidities[1:00:31]
• He references Munger's psychological misjudgments and advocates three approaches: internalize those misjudgments, observe others' failures, and analyze his own shortcomings
• He notes that personal mistakes come with steep tuition but produce vivid, impactful lessons that can significantly improve future behavior
Not needing brilliance and favoring mundane businesses[1:01:22]
• He stresses he does not need to be brilliant or invest in flashy sectors to meet his goals; many holdings are mundane industries like trust manufacturers, discount grocers, women's retailers, water treatment, and quick-serve restaurant franchisors
• He does own some "exciting" vertical market software companies (e.g., Topicus, Lumine, and one serving exterior home renovations), but is not drawn to pure Silicon Valley-style story stocks

Technology as an enhancer, not a story, and examples like John Deere

Preference for profitable businesses using technology pragmatically

Automation and data as competitive edge[1:02:12]
• He likes businesses that apply technology such as automation to increase efficiency, reduce costs, and widen moats rather than speculative tech narratives
• He notes many legacy businesses still use outdated tech and will be left behind as more efficient competitors leverage automation to crush margins

Case study: John Deere

Historical innovation and modern shift[1:02:43]
• John Deere, founded in 1837, progressed from mechanical innovations (steel plows, large-scale equipment) to integrating technology into its products
• In 2022, John Deere unveiled a fully autonomous tractor, allowing farmers to free up time while equipment operates itself
• Kyle likes models where companies with existing customer attention and data can leverage that information and automation to deepen value and create moats competitors can't easily match

Mistakes of omission and reflection on missed opportunities

Two types of mistakes of omission

Selling too early vs not buying at all[1:04:13]
• He defines omissions as (1) stocks he sold but should have held and (2) stocks he could have understood and bought but passed on

Example: Gatekeeper Systems sale

Gatekeeper Systems overview and outcome[1:04:21]
• Gatekeeper provides video and data solutions to the public transportation industry in the U.S.
• He bought at $0.33 in September 2023 and sold for a 52% gain due to seasonality and lack of "wow", but as of August 21, 2025, shares are $1.27, implying about a 96% CAGR had he held
• Despite regret over missed gains, he believes he likely would have made the same decision again with the information available then

Examples of passed-on opportunities

KRAKEN (underwater imaging), hims & hers, BeWhere, Kits Eyecare[1:05:26]
• He cites KRAKEN, an underwater imaging equipment provider to Western navies, which he saw at about $0.65 in late 2023 and which later traded around $3.57
• He considered hims & hers after community discussion but passed due to required time commitment; he recalls looking at it in the mid-teens and it later reached $43 by August 21, 2025
• He looked at BeWhere Holdings (IoT tracking devices for assets like bikes and forklifts) near $0.20 in 2023; later around $0.80
• He met the CEO of Kits Eyecare (vertically integrated e-commerce eyecare) at a conference and was impressed but passed due to lack of profitability; stock went from about $5 to $16.50

Philosophy on handling missed winners and focusing on errors

Accepting inevitable missed opportunities[1:06:41]
• He acknowledges there are many missed opportunities and that looking at enough ideas guarantees missing some big winners
• He believes the key is figuring out what you can understand well within a reasonable time and, if needed, starting with 1% positions while learning, rather than obsessing over every miss
Emphasis on analyzing losses over omissions[1:07:21]
• He prefers to analyze his actual losses and focus on not repeating those mistakes, rather than beating himself up for omissions
• He concludes that continuously eliminating self-sabotaging tendencies should enable him to become an above-average investor, which he frames as the overarching theme of his philosophy

Conclusion and call for feedback

Contact information and openness to dialogue

Where to follow and connect with Kyle[1:07:43]
• He invites listeners to follow him on Twitter at @IrrationalMRKTS or connect on LinkedIn by searching for his name, Kyle Grieve
Request for feedback[1:07:48]
• He expresses openness to feedback on how to improve the podcast listening experience and thanks listeners before signing off

Lessons Learned

Actionable insights and wisdom you can apply to your business, career, and personal life.

1

Set clear, absolute performance goals and build your process around them rather than obsessing over relative benchmarks, then evaluate each investment by whether it can realistically meet your hurdle over a multi-year period.

Reflection Questions:

  • • What explicit return goal over the next five to ten years would meaningfully change my life and still be realistic given my skills and constraints?
  • • How would my current portfolio look different if I evaluated every holding by whether it can plausibly meet a specific multi-year hurdle rate?
  • • Which metrics or simple models can I adopt to track progress toward my absolute goals without getting distracted by short-term index comparisons?
2

Think and act like a business owner by focusing on operating results, management quality, and long-term competitive position instead of short-term stock price movements.

Reflection Questions:

  • • If there were no stock quote, which of my current holdings would I still be happy to own purely based on the underlying business performance?
  • • How can I better assess the integrity and capital allocation skill of the management teams behind my largest positions?
  • • What changes could I make to my monitoring process so that quarterly reviews center on operating metrics and thesis checkpoints rather than price charts?
3

Use a structured sell discipline-better opportunities, clear overvaluation, or a broken thesis-to counteract confirmation bias and sunk cost fallacy instead of relying on gut feelings.

Reflection Questions:

  • • Which of my current positions would I not buy today if I started from cash, and what does that imply about potential candidates for sale?
  • • How can I formalize my own three to five sell rules so that future exit decisions are less emotional and more process-driven?
  • • The next time a thesis begins to wobble, what specific evidence will I look for to distinguish a temporary setback from a genuinely broken thesis?
4

Concentrate capital in your best ideas and allow winners to grow, but size initial positions and add-ons according to risk, volatility, and how quickly your thesis is being confirmed.

Reflection Questions:

  • • Are my largest positions truly my highest-conviction, highest-quality ideas, or are they simply the ones I bought earliest or in the biggest size?
  • • How might starting new positions smaller and averaging up as fundamentals are confirmed improve my risk-adjusted returns?
  • • What maximum cost-basis and absolute size limits make sense for different types of holdings in my portfolio (e.g., quality compounders vs higher-risk names)?
5

Continuously refine your circle of competence and apply Bayesian updating-be willing to learn new domains deliberately, but adjust your convictions as fresh data arrives.

Reflection Questions:

  • • In which industries or business models do I currently have a genuine circle of competence, and where am I mostly guessing?
  • • How can I implement a simple probability-weighted scenario framework for my key holdings and update it consistently each quarter?
  • • The next time I explore an unfamiliar sector, what concrete steps will I take to either build competence (e.g., specific reading, expert calls) or consciously limit my exposure?
6

Engineer your information environment to reduce unnecessary action by stripping out low-value stimuli (screens, news, social pressure) and creating default inertia in your investing behavior.

Reflection Questions:

  • • Which sources of financial information in my daily routine most often trigger impulsive trades or anxiety rather than thoughtful analysis?
  • • How could I redesign my workspace, notification settings, and media diet to make inaction my default unless a clear, high-quality opportunity appears?
  • • What one environmental change-removing a news source, muting certain accounts, or limiting logins-can I implement this week to lower noise in my investment process?
7

Focus on stupidity reduction and error analysis-learning deeply from your own and others' mistakes can be more powerful than chasing brilliance or the newest exciting narrative.

Reflection Questions:

  • • Looking back at my biggest investing losses, what recurring behavior patterns or blind spots do they reveal?
  • • How can I systematically log and review my investment mistakes so that the tuition I paid actually compounds into better decisions?
  • • What criteria can I adopt to deliberately avoid obvious pitfalls (e.g., leverage, opaque management, unclear business models) before they enter my portfolio?

Episode Summary - Notes by River

TIP755: My Process for Finding Great Investments w/ Kyle Grieve
0:00 0:00