The UChicago Brothers - Thomas and Mark

Our Theory: Our theory flies in the convention of the efficient markets hypothesis. Rather than individuals, the financial landscape is increasingly dominated by subgroups in our theory -- and subgroups are inherently irrational. Previously, it was conjectured that political change effectively rippled through the markets on a temporary basis. But with our theory, political changes have long-term implications -- implications that we would like to educate others on. Perhaps the biggest political change in particular is the consolidation of large businesses and wealth accumulation at the top echelon of society, resulting in fewer "diamonds in the rough" in the small-cap space. Traditionally, many investors such as Warren Buffett and Benjamin Graham made significant amounts off of the idea that there are "diamonds in the rough" in the small-cap space - and some investors out there still rely on it today.

Unfortunately, we believe that subscription to such a theory is misguided with more and more smaller companies having been scooped up by private equity firms, with the rise of passive investing, and with more and more capital diverted to large cap companies, increasingly in a smaller number of sectors. According to our theory, individuals don't just crave resources. Individuals crave power. And with market movements therefore really revolving around power, subgroups increasingly dominate the financial landscape. On the investment side, the biggest subgroups are billionaires, and on the receiving side, the biggest subgroups are industries -- the technology, financial services, and the manufacturing industry in particular. Notably, passive investing along with automation augments this trend -- allowing billionaires to consolidate wealth at scale and inherently prioritizing investment in larger industries as many ETFs are structured with greater weighting for such industries. Within each of these industries, there are businesses that have effectively established invincible moats through network effects, through brand enhancement, and through accruing sizable investments over the years. Our goal is to identify these businesses, track the financial movements of billionaires, and educate others so that others can take advantage of the cultural trend that is currently at play within our financial markets. So far, we have accomplished part of our goal: our six stock picks have net a 42% return YoY. Even in a society with technology, investment behavior remains a conglomeration of cultural and psychological trends. While we cannot assure similar investment performance success in the future, we believe we have a strong investment thesis that could power further stock identification and could engender further return for our readers. We aim to keep you abreast of any changes to our stock picks, and we also aim to provide you with new stock picks with at least one pick each month. In the subsequent post are the stock picks that have generated a 42% YoY return for our portfolio along with a brief explanation as to our investment in each company. In addition to investing according to our theory, we conduct technical analysis, analyzing the historical performance of each stock over different time horizons. At the same time, we conduct other traditional aspects of fundamental analysis, prioritizing debt-free companies, companies with strong business models, and companies that have strong cash flow metrics. Please subscribe to see our stock picks, to see future updates, to learn of future stock recommendations, and to participate in future discussions of sector dynamics.