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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Mindset Value Fund gained 16.8% in Q1 2023, led by HireQuest's franchise staffing model demonstrating exceptional acquisition accretion and earnings power growth toward $2.50-$3 per share. Cannabis investments capitalize on regulatory inefficiencies in a $100 billion industry, while Mexican housing exposure benefits from nearshoring trends."
The Mindset Value Fund delivered 16.8% net returns in Q1 2023, driven by three core positions: HireQuest, Glass House Brands, and Consorcio Ara. HireQuest represents the largest position, demonstrating exceptional value creation through its franchise staffing model that converts underperforming companies into profitable franchises. The recent MRI acquisition would have added $0.40 per share in earnings accretion, supporting the manager's belief that HireQuest has $1.75 in current earnings power and is heading toward $2.50-$3 per share annually. The cannabis sector, despite widespread crushing of stocks, offers extraordinary opportunities due to regulatory quirks that exclude 99% of sophisticated financial players from a $100 billion industry growing toward $200 billion. Consorcio Ara benefits from nearshoring trends and Mexican housing demographics while trading at just 33% of book value. The portfolio maintains over 5% annual yield through dividends, preferred equity, convertible debt, and senior secured notes, positioning for continued growth.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
Very high conviction demonstrated through HireQuest as the largest position with detailed earnings analysis, specific price targets ($2.50-$3 per share), and willingness to maintain cannabis exposure despite sector-wide distress. The manager provides concrete financial projections and acquisition accretion calculations.
Growth Outlook
The manager expresses constructive optimism about specific opportunities and expects positive developments, but focuses more on individual company fundamentals than broad market enthusiasm.
Risk Appetite
The fund maintains concentrated positions in their highest conviction names like HireQuest as the largest position, while also investing in contrarian sectors like cannabis that others are avoiding.
Capital Deployment
No explicit mention of cash level changes or new capital deployment. The letter focuses on existing positions and their performance rather than indicating significant new investment activity.
Forward Guidance
The manager explicitly states expectations for more positive news and strong growth from investments as the year progresses, indicating a deployment bias toward existing positions.
Language Signal
Language includes positive terms like 'extraordinary opportunities,' 'strong growth,' and 'superior model,' balanced with acknowledgment of sector challenges and market conditions.
Perceived Risk
Limited risk discussion beyond acknowledging cannabis sector challenges and cyclical nature of staffing business. The manager frames most risks as opportunities rather than threats.
Opportunity Density
The manager sees abundant opportunities, particularly in cannabis due to lack of competition from sophisticated players, and continues finding accretive acquisition targets for HireQuest. Multiple sectors and geographies provide opportunity sets.
Time Horizon
Multi-year outlook evident in HireQuest earnings projections toward $2.50-$3 per share, cannabis industry growth from $100B to $200B revenue, and Mexican demographic trends. No urgency for near-term catalysts expressed.
