| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.2% | - | -3.7% |
Starvine Capital's Flagship and Mild Large Cap strategies returned 2.2% to 3.7% and 2.0% to 3.8% respectively in FY 2025, underperforming the S&P 500's 71.2% gain. This divergence stems from the market's concentration in AI infrastructure, semiconductors, and hyperscaler-driven growth, themes where Starvine maintains minimal exposure. The manager frames this underperformance as a deliberate outcome of their selective, bottom-up approach that prioritizes long-term absolute returns over short-term relative performance. Drawing on Ted Williams' batting philosophy, the letter emphasizes plate discipline and only investing when opportunities meet strict criteria for favorable risk-reward asymmetry. The strategies avoid swinging at every pitch, instead waiting patiently for high-conviction opportunities. With little exposure to the narrow set of AI-driven winners that powered 2025 market gains, Starvine remains committed to their disciplined framework, accepting near-term underperformance as the cost of maintaining investment standards. The manager expresses comfort with this selectivity, viewing it as essential for long-term success despite short-term tracking error.
Starvine Capital employs a highly selective, bottom-up investment approach focused on long-term absolute wealth compounding rather than short-term relative performance, deliberately avoiding crowded themes like AI infrastructure in favor of opportunities with favorable risk-reward asymmetry.
The manager does not provide explicit forward guidance but emphasizes continued commitment to selectivity and discipline. They express comfort with their bottom-up approach and willingness to wait for opportunities that meet their investment criteria, regardless of near-term relative performance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 27 2026 | 2026 Q2 | - | AI, Discipline, large cap, selectivity, semiconductors, value | - | Starvine Capital significantly underperformed in FY 2025 as AI infrastructure and semiconductors drove concentrated S&P 500 gains. The manager deliberately avoided these crowded themes, maintaining strict plate discipline and selectivity. Drawing on Ted Williams' batting philosophy, they emphasize only investing when risk-reward asymmetry is clearly favorable. Despite near-term underperformance, they remain committed to their bottom-up, long-term absolute return framework over relative performance. |
| Jan 13 2026 | 2025 Q4 | - | Canada, Compounding, long-term, Quality, value, volatility | - | Starvine delivered 41.6% returns in 2025 despite currency headwinds, capitalizing on spring volatility from trade tariff fears to add exposure at attractive prices. The manager emphasizes these exceptional returns are unsustainable, maintaining focus on quality companies at reasonable valuations for long-term compounding while opportunistically exploiting market dislocations. |
| Jul 23 2025 | 2025 Q2 | - | Alternative Asset Managers, Canada, long-term, Quality, Trade Policy, value | - | Starvine delivered solid H1 2025 returns despite tariff-driven market volatility, with portfolio businesses proving resilient to trade impacts. Ten-year track record reflects evolution from valuation-focused spin-off investing to quality-driven durable compounding strategy. Manager emphasizes long-term holdings of high-quality businesses while maintaining disciplined risk management and continuous portfolio optimization in dynamic market environment. |
| Jan 30 2025 | 2024 Q4 | - | Alternative Asset Managers, Bottom-up, Canada, Currency, value | - | Starvine delivered record 52.7% returns in 2024, driven by alternative asset manager rebounds and U.S. dollar strength. The manager maintains strong U.S. exposure for superior opportunity breadth despite currency risks. Investment approach focuses on quality companies with great management, durable moats, and attractive valuations using the MCARV framework for selective bottom-up stock picking. |
| Jul 27 2024 | 2024 Q2 | - | AI, Canada, Market Concentration, small caps, Tech Valuations, value | - | Starvine returned 10.8% YTD while warning of dangerous AI-driven concentration in mega-cap tech stocks. With top 8 S&P 500 names now comprising 30% of the index, Ko sees significant downside risk and prefers small/mid-cap value opportunities. Maintains bottom-up approach focused on absolute returns and quality businesses at reasonable prices. |
| Jan 31 2024 | 2023 Q4 | AAPL, AMZN, GOOGL, META, MSFT, NFLX, NVDA, TSLA | Benchmarks, large cap, Mega Cap, Performance, technology | - | Starvine Capital posted solid 2023 returns of 13.5-15.2% but lagged the mega-cap tech driven S&P 500. Manager Steven Ko maintains his disciplined bottom-up approach despite acknowledging the large-cap versus small-cap performance divide, focusing on long-term compounding rather than timing mean-reversion trades. |
| Jun 30 2023 | 2023 Q2 | AAPL, AMZN, GOOGL, META, MSFT, NFLX, NVDA, TSLA | AI, Canada, inflation, small caps, technology, value | - | Starvine outperformed in H1 2023 while avoiding AI speculation mania affecting mega-cap tech. Small-cap valuations remain at historical discounts versus large caps, creating opportunities similar to past downturns. With inflation easing and rate hikes slowing, the manager sees continued rally potential while maintaining focus on quality companies at defensive valuations. |
| Jul 27 2022 | 2022 Q2 | BAM, FRG | Bear Market, Buybacks, inflation, Mid Caps, small caps, value | - | Starvine's small-cap focused strategies fell 25-27% in H1 2022 but manager sees compelling value opportunity as small/mid-cap valuations reach 2008-9 recession levels. Portfolio emphasizes business-to-business companies with moats and pricing power. Recent incremental buying of unfairly sold names positions for expected snap-back when companies demonstrate resilience. |
| Jan 24 2022 | 2021 Q4 | - | Canada, Equity Markets, Growth Stocks, inflation, risk management, Value Investing | - | Starvine delivered 49% returns in 2021 but faces 2022 market volatility with growth stocks correcting sharply. Manager Ko prefers equities over gold or crypto for long-term wealth building despite inflation headwinds, focusing on companies with pricing power bought at attractive valuations. Views recent sell-off as healthy market correction eliminating excesses. |
| Jul 28 2021 | 2021 Q2 | AAPL, AMZN, GOOGL, META, MSFT, NFLX | Bottom Up, Concentration, Market Timing, technology, value | - | Starvine delivered 36% H1 returns through bottom-up value investing while rejecting market timing despite elevated valuations. Manager Ko criticizes S&P 500 concentration in FAANGM stocks but maintains disciplined approach of holding undervalued compounders rather than hoarding cash. Expects long-term returns to track portfolio company earnings growth over market timing strategies. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI infrastructure companies drove significant S&P 500 gains in 2025, with semiconductor companies benefiting from hyperscaler demand. Heavy machinery companies were repurposed as growth proxies to meet AI data center demand. More than a third of market gains came from a handful of big customers supplying AI infrastructure. |
Semiconductors Data Centers Infrastructure |
SelectivityThe manager emphasizes plate discipline and selectivity as core to their investment approach, drawing parallels to Ted Williams' batting philosophy. They advocate for only swinging at pitches in the strike zone and waiting for opportunities with favorable risk-reward asymmetry. This selectivity, paired with patient capital, is positioned as essential for long-term success. |
Discipline Risk-Reward Patience | |
| 2025 Q4 |
AIAI has been integrated into RGA's research process as a force multiplier for human judgment, not a replacement. The firm uses NotebookLM, Gems in Gemini, and Claude Code for efficiency and risk analysis. While AI creates opportunities in the application layer, the infrastructure narrative may be overblown with significant structural headwinds for software companies. |
Artificial Intelligence Machine Learning Automation Software Technology |
SemiconductorsLattice Semiconductor represents an under-appreciated AI winner with immediate gains and longer-term optionality. The company's focus on efficiency rather than maximal performance creates powerful counterpositioning in FPGAs, particularly for AI server security functions and Post-Quantum Cryptography. |
FPGAs Chips Hardware Security Edge Computing | |
CybersecurityLattice's FPGAs serve as the Root of Trust chip in hyperscaler server architectures, acting as security sentinels. Their Post-Quantum Cryptography secure chips are the only ones on the market, future-proofing against quantum attacks and making them unlikely to be replaced by ASICs. |
Security Encryption Quantum Infrastructure Protection | |
SoftwareSoftware companies face structural headwinds from AI, including increased customer bargaining power, pricing pressure, and lower barriers to entry for competitors. While AI can help defend margins through efficiency, it fundamentally challenges the sector's growth assumptions and creates deflationary pressures. |
SaaS Enterprise Software Pricing Competition Disruption | |
| 2025 Q2 |
QualityManager evolved from valuation-driven approach to emphasizing fundamental business quality. Introduced checklist in 2017 placing greater emphasis on business quality rather than relying heavily on valuation setups. Philosophy shifted from seeking great returns to prioritizing durable compounding with deeper appreciation for rarity and resilience of certain holdings. |
Business Quality Durable Compounding Fundamental Analysis Long-term Holdings |
ValueManager discusses evolution away from pure valuation focus while acknowledging valuation remains important as part of broader investment mosaic. Uses grocery store cashier line analogy where choosing shortest line doesn't always get you out faster, sometimes paying higher valuation multiple is wiser for businesses with strong earnings growth. |
Valuation Value Traps Intrinsic Value Price-to-Value | |
Trade PolicyFirst half 2025 brought steepest market drawdown since COVID due to uncertainty surrounding trade tariff proposals from Trump administration. Manager notes businesses owned were largely insulated in terms of free cash flow exposure, validated during Q1 earnings calls where management teams reiterated limited impact. |
Tariffs Trade Uncertainty Trump Administration Cash Flow Impact | |
| 2024 Q4 |
Alternative Asset ManagersLarge-cap alternative asset managers rebounded sharply in 2024 after facing pressure in 2022 due to rising interest rates. These companies continued to grow their businesses despite market skepticism, leading to a slingshot effect as share prices surged to reflect both mean reversion and recognition of increased intrinsic value. |
Asset Managers Rebound Interest Rates Intrinsic Value |
ValueThe manager employs a value investing approach, aiming to start below fair value like hanging from stretched rubber bands. Value investors can win through mean reversion or multiple expansion, and by staying on as the elevator ascends driven by earnings growth. |
Value Investing Mean Reversion Multiple Expansion Fair Value | |
| 2024 Q2 |
AIManager discusses the AI narrative driving market imbalances, noting much market value has been created from the AI theme without evidence of increased free cash flows to support it. The AI euphoria began in early 2023 as ChatGPT proliferated, contributing to tech company outperformance. |
Artificial Intelligence ChatGPT Tech Valuations Market Concentration |
Small CapsThe letter highlights the continued disparity between small caps and large caps, with small and mid-cap companies trading at lower forward P/E ratios compared to large caps. The manager believes there will be a reversion-to-the-mean trade to be made, though has not deliberately repositioned based on this belief. |
Small Cap Value Market Cap Disparity Valuation Gap Mean Reversion | |
ValueThe investment approach is predicated on value principles, focusing on attaching to good businesses and not overpaying. The manager emphasizes a seemingly naive approach of underpaying for quality businesses can lead to decent compounding over time. |
Value Investing Business Quality Compounding Bottom-up Selection | |
| 2023 Q2 |
AIAI is described as a disruptive technology that has captured investors' imaginations in 2023, but the fervor and speculation surrounding AI-associated stocks is reminiscent of market manias. Speculators have piled into AI-related companies without regard to valuation, with share prices moving on emotion rather than fundamentals. |
Artificial Intelligence Speculation Valuation Technology |
Small CapsSmall- and mid-cap stocks continue to trade at a discount relative to large-cap stocks compared to most points since 1999. The manager believes this presents an opportunity similar to past downturns, with potential for multiple expansion in concentrated mid-cap and below positions. |
Valuation Multiple Expansion Discount Opportunity | |
InflationInflation has been easing in the first half of 2023, which has led to a slowdown in the Fed's hiking of interest rates. Lower inflation readings are creating less tepid sentiment about future interest rate increases among market participants. |
Federal Reserve Interest Rates Economic Trends | |
| 2022 Q2 |
ValueManager emphasizes value investing philosophy as actively avoiding permanent loss of capital. Discusses range from bargain-only Ben Graham model to quality-focused approaches weighing moats, growth prospects, and management capital allocation ability. Focus on stock price relative to earnings power and scenarios imputed in current price. |
Value Earnings Quality Growth |
Small CapsSmall-cap and mid-cap valuations have reached 2008-9 recession levels and initial covid lockdown levels. Manager believes this presents similar opportunity for multiple expansion as in past downturns, but with less macroeconomic uncertainty relative to 2008 and 2020. |
Small Caps Valuations Volatility | |
BuybacksManager highlights companies with strong balance sheets using bear market as opportunity to repurchase shares at bargain prices. Cites Brookfield Asset Management's normal course issuer bid for up to 10% of float and Franchise Group's $500 million buyback program representing ~40% of market cap. |
Buybacks Capital Markets | |
| 2021 Q4 |
InflationManager views inflation as a key uncertainty for wealth allocation going forward, noting it as a headwind for equity returns that eats away at purchasing power. However, believes equities remain the best place to be despite inflation risks, as companies with pricing power can protect profits by raising prices to offset increased costs. |
Inflation Pricing Power Purchasing Power |
GoldManager acknowledges gold as the most traditional inflation hedge but views it unfavorably compared to equities. Notes that gold cannot compound intrinsic value or pay dividends, describing it as just a store of value that can only sit still, lacking the exponential appreciation potential of common stocks. |
Gold Inflation Hedge Store of Value | |
CryptoManager mentions cryptocurrencies have gained widespread popularity as a store of value alongside gold. However, similar to gold, views crypto as lacking the prospect of compounding intrinsic value or paying dividends, positioning it as merely a store of value without the growth potential of equities. |
Crypto Store of Value Digital Assets | |
GrowthManager observes a distinct sell-off in growth/tech stocks, especially those trading at high multiples of sales with insignificant earnings. Uses gravity metaphor to describe the pull-back of high multiple growth stocks, expressing preference for lower potential returns with more solid ground beneath, stating fear of heights in valuations. |
Growth Stocks Valuations Tech Stocks | |
| 2021 Q2 |
ValueManager discusses the rebound of value stocks as a contributor to H1 2021 performance. Emphasizes bottom-up stock selection over market timing, focusing on identifying undervalued or fairly valued compounders for long-term holding. |
Value Undervalued Compounders |
GrowthManager analyzes the concentration risk in growth stocks, particularly FAANGM names which represent 26% of S&P 500 market cap. Notes concern about high valuations in mega-cap technology but maintains focus on individual stock selection rather than broad growth avoidance. |
Growth Technology Concentration |
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