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A number of well-known investors extoll the benefits of investing in family-run businesses. I used to be favorably inclined as well. The large ownership stakes, long time horizons and conservative financing of family businesses align with my own goals of steady compounding with minimal risk of a blow-up. However, in reality, some of my worst returns have come from family-run companies. What gives? Evidence in Favor of the Family-run Company There is some evidence that famil

The Hosomichi strategy is constructivist. I aim to create value for employees and shareholders alike by advocating for best practices in both capital allocation and operations. In my experience, if a company continues to invest in a low-return business, it is bad for everyone. It is impossible to raise pay for workers if the customers are unwilling to pay much beyond the cost of raw materials, and naturally shareholder value is also impaired. While creating shared value can b

I try to play tennis a few days a week. I also watch lots of matches on YouTube. My favorite player to watch is Nick Kyrgios. If you don't know him, Kyrgios is an Australian player with one of the best serves in the game. His first serve averages 130mph, 10mph better than the average pro, while he barely slows down for the second serve at 124mph, exceeding peers by 25mph. He is also the poster child for unfulfilled potential. Despite his dominating serve and incredible skill