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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Strong Q2 performance driven by HireQuest's Russell inclusion and Grown Rogue's cannabis cultivation efficiency. Portfolio combines growth-oriented small caps with income-generating convertibles yielding over 5% annually."
The Mindset Value Fund delivered strong Q2 2023 performance with 14.2% net returns, bringing year-to-date performance to 33.3%. The portfolio is anchored by two key positions demonstrating the manager's pattern recognition approach. HireQuest, the largest holding, continued its momentum with 25% quarterly gains following Russell 3000 inclusion, now trading at $25 per share with projected earnings of $2.50-$3 annually. The manager sees this staffing franchise as a free cash flow machine given minimal capex requirements and 60% operating margins. Grown Rogue represents a contrarian cannabis play, identified as the world's most efficient indoor cultivator producing premium flower for under $600 per pound. Despite illiquidity, the company is expanding beyond Oregon through strategic partnerships, with growth expected to accelerate from 30% to potentially over 100%. The portfolio generates over 5% annual yield through convertible debt and preferred equity positions, providing income while waiting for equity appreciation. The manager launched a new income-focused fund targeting 10% annual distributions.
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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 concentrated portfolio with two named, sized positions representing largest holdings. Manager provides specific earnings projections for HireQuest ($2.50-$3 per share) and detailed operational metrics for Grown Rogue. Willingness to add to positions and launch dedicated funds around these themes shows strong conviction.
Growth Outlook
Manager expresses constructive optimism about portfolio companies and their growth prospects, expecting more positive news as the year progresses, though focuses more on individual company fundamentals than broad market commentary.
Risk Appetite
Portfolio is concentrated in high-conviction positions with the manager actively adding to Grown Rogue through additional convertible investments and maintaining bullish stance on HireQuest despite significant gains.
Capital Deployment
Manager is selectively deploying capital through additional convertible investments in Grown Rogue and launching new fund products, but no broad-based deployment or significant cash level changes mentioned.
Forward Guidance
Manager explicitly states expectation for more positive news and strong growth from investments, launching new fund products, and maintaining conviction in core thesis despite some positions having appreciated significantly.
Language Signal
Language is predominantly positive with terms like 'strong growth,' 'bullish,' 'explosive growth,' and 'positive news,' though balanced with acknowledgment of illiquidity and market risks.
Perceived Risk
Limited risk discussion beyond acknowledging illiquidity in Grown Rogue and standard disclaimer language. Manager appears comfortable with concentration risk and small-cap volatility.
Opportunity Density
Manager sees abundant opportunities in his specialized areas, launching new fund products and finding additional investment structures (convertibles, preferred equity) while maintaining conviction in existing positions.
Time Horizon
Multi-year investment horizon evident through willingness to build positions over months despite illiquidity, focus on fundamental business building, and patient capital approach with income generation while waiting for appreciation.
