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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
Sorfis Investments' core thesis is that long-term investment success is achieved by maintaining disciplined value investing principles, managing tax implications, and seeking opportunities outside historically overvalued and highly concentrated major market indices. During 2025, the firm achieved solid gains across both its Diversified and Absolute Return strategies, though returns varied due to proactive trimming of larger, high-valuation holdings. The manager highlights significant systemic risks, particularly the near-record valuations and unprecedented concentration within the S&P 500, which historically portend flat or negative returns for the upcoming decade. Additionally, the letter addresses the massive, historically unprecedented capital expenditure boom in artificial intelligence infrastructure, warning that capital-light businesses are becoming highly capital-intensive. Consequently, Sorfis remains defensively positioned, keeping cash ready and focus sharpened on finding value outside the main indices, preparing to capitalize on the return of market volatility while advising clients to maintain tempered expectations.
Long-term investment success is achieved by maintaining disciplined value investing principles, avoiding highly concentrated, overvalued major indices, and patiently exploiting volatility to purchase mispriced assets.
The manager expects that extreme valuations and record-high concentration in the S&P 500 at the end of 2025 will likely lead to flat or negative returns for the index over the next decade. Sorfis intends to search for value outside of the main indices, anticipating that market volatility will eventually return and present attractive opportunities.
As of Jan 30, 2026
Joseph Thomas Koster, Managing Member and Portfolio Manager, brings over two decades of investment experience beginning in 2005. He managed the Chanticleer Investors II microcap value fund from 2007-2013, achieving a cumulative net return of 136.74% versus the Russell 2000's 35.78% and S&P 500's 30.41%. He served as Managing Member at Boyles Asset Management from 2013-2018 before founding Sorfis in 2019. Koster holds a finance degree from Coastal Carolina University, maintains Series 65 registration, and is recognized for his Value Investing World Newsletter and commitment to continuous learning in investment management.
Lead Portfolio Manager
Neutral / Balanced
Market Conviction
Sorfis expresses a disciplined value philosophy but does not name, size, or detail any specific stock positions in this letter. The portfolio strategy is described in aggregate (e.g., Diversified Strategy and Absolute Return Strategy) rather than concentrated single-name pitches, warranting a moderate conviction score of 0.50.
Growth Outlook
Sorfis rates the market outlook at 0.25 due to explicit warnings regarding extreme S&P 500 valuations and record index concentration levels. The manager notes that historically, these conditions align with flat or negative returns for the subsequent decade, making them highly cautious on major passive indices.
Risk Appetite
The firm trimmed larger holdings on valuation grounds and is actively advising clients to examine portfolios and moderate their expectations. Their current focus remains outside major indices, prioritizing defense against what they perceive as potential market excesses.
Capital Deployment
The manager explicitly mentions trimming larger holdings based on valuation throughout 2025. This harvesting activity, combined with their cautious stance on deployment into an overvalued market, indicates a net posture of moderate de-risking and capital preservation.
Forward Guidance
Sorfis is in a monitoring and defensive preservation posture, waiting for the inevitable return of volatility. They trimmed positions earlier in the year and are now looking outside major indices for value without showing aggressive immediate deployment signals.
Language Signal
The letter contains frequent references to risks, overvaluation, bubbles bursting, and historically flat/negative returns. While they express long-term confidence in their value-oriented discipline, their immediate market commentary is dominated by warnings of record index concentration.
Perceived Risk
Sorfis outlines significant systemic risks including extreme S&P 500 index concentration, unprecedented capital expenditure booms that threaten corporate capital efficiency, geopolitical tensions, and tariff threats. They discuss these macro risks in detail over multiple pages.
Opportunity Density
The manager emphasizes that valuations are high and concentration is at historic levels, making compelling ideas scarce within major indices. They expect to find more opportunities only when volatility returns to the markets.
Time Horizon
As value investors, Sorfis takes a long-term view, quoting Buffett and Munger on patience and discipline. They analyze market valuation cycles on a 'subsequent decade' timeframe and emphasize that patience pays off in the long run.
Top Conviction Themes
Key Catalysts
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