Welcome to The Hermit: Institutional Research.
Whether you found us via a friend, an algorithm, or pure luck, you are here because you suspect that everyone else is looking in the wrong places.
And… You’re probably right.
Our Edge: The “Too Small” Advantage
We focus exclusively on extraordinary companies with a market cap under $2bn.
Why? Because big funds can’t buy them. They are structurally forbidden from owning these stocks due to liquidity rules.
That leaves the field open for us. We exploit this information asymmetry to find mispriced monopolies, forgotten compounders, and deep-value assets.
Our Process Explained
We hunt for certainty. Our system demands patience. On average, we’ve uncovered 2 to 5 purchasable companies per year, which doesn’t sound like much until you see how these have compounded for us at 21%+ over the last 8 years.
As you can probably imagine, when we find one, we don’t hesitate.
Every investment is the result of a 3+ month due diligence process:
📊 Financials: We rebuild the statements from scratch.
📑 Filings: We read every footnote.
🕵️ Scuttlebutt: We interview management, suppliers, and competitors.
📈 Technical: We thoroughly review price action for entry points.
Your Deliverables
We publish heavily researched content twice a week, and it’s mostly paid.
Our Investing Journey. Essays on cognitive biases, the psychology of money, primary field research, and the reality of running a fund.
Core Thesis. Paid ($30/year)
The Institutional Deep Dive. A 30+ page thesis based on primary data. We cover the business model, the moat, the catalysts, the risks, and the valuation. This is our owner’s manual for each and every company we purchase.
Our Pick of the Week. Concise, high-conviction snapshot of a fresh company in our crosshairs. We focus on undervalued assets, ignored backlogs, or margin expansion stories.
Access. Founding ($699/year)
Priority Briefings. Investing is dynamic, and so is our research. We regularly speak with the management teams. These are highlights and transcripts from these conversations with actionable updates on how the business is evolving.
The Hermit Portfolio. The full allocation of our net worth: individual equities, ETFs, alternative assets, and private holdings. You get detailed updates on exactly what we are buying and selling and why.
Hall of Fame (Start With These)
If you are new, don’t start with today’s post. Start with our Hall of Fame.
These write-ups demonstrate exactly what we do and how we do it.
The Monopolies (Our Bread & Butter)
Limes Clinics: [Mostly Free] The world’s most exclusive mental health operator. High margins, high barriers to entry
Crocs: [Mostly Free] The ultimate Ugly-Cool monopoly. A masterclass in high-margin manufacturing (60% gross margins) and the art of the brand reset
Computer Modelling Group: The dominant duopoly in reservoir simulation software for oil & gas with EBIT margins north of 40% since 1978.
The Compounders & Consolidators
Atlas Engineered Products: A structural winner in the Canadian building market. “Truss(t)” the process of consolidation
QXO: The “Brad Jacobs” Playbook. How a serial compounder is building the next construction giant
Omni-Lite Industries: Inside a multi-division Aerospace & Defense powerhouse making precision components
The Special Situations
Spartan Delta: An Oil & Gas consolidator with massive operational leverage. A masterclass in acquisition-driven value creation
Aurora Spine: How a screwless, minimally invasive approach is disrupting the $10B spinal implant market
BluMetric: The water-tech turnaround with a massive backlog of military contracts
The Mindset
Why Bitcoin Is Going to Zero: A framework for valuing non-productive assets
The K-Shaped Reality: Navigating the widening gap between the haves and have-nots in a high-interest, AI-driven labor market
The Toolkit
We believe in open-sourcing our methods. Here are the tools we use regularly:
Valuation Tool: The simple model we use to sanity-check price targets
The Scuttlebutt Guide: How to interview management like a journalist
The All-Weather Portfolio: How to structure your capital for decades of survival
We’ve had various media appearances; here’s a curated collection of them.
Skin in the Game
We are capital allocators. We have been doing the job successfully for over a decade, with independently audited returns since 2018.
We began by interning for a family office in 2014. We’re still involved with those operations.
In 2024, the family office seeded Equity Focus FIL, our regulated European hedge fund (no longer adding LPs).
While we continue buying listed stocks, we have expanded the team to acquire entire companies and operate them directly through Hermit Ventures.
Every action since June 2024 is published here. Feel free to verify.
Welcome to the community!
Alejandro Yela
Hermit Ventures
The transparency in your portfolio performance is what this industry desperately needs.
This is beautiful. Thank you for the detailed introduction!