Someone please google him and read a little. I can't download the file I want to read. The title of the article is Kevin Douglas the greatest unknown investor. if you can tell me what it says i would appreciate it.
My intuition after reviewing as many investments as I can is that Mr. Douglas first assesses a company’s addressable market and then assigns probabilities based on the likelihood of the company capturing different portions of the addressable market. For example, let’s say we’re talking about a company with a $20 billion addressable market. He would then assign probabilities for the company to capture that market opportunity. For example, let’s say there is a 20% chance that the company captures 50% of the market, a 50% chance of the company capturing 30% of the market, and a 30% chance that the company captures 10% of the market, he then calculates the weighted average of the future revenue base (.2*$10) + (.5*$6) + (.3*$2) = $5.6 billion. So long as the company is worth less than the present market capitalization grown at his target rate of return (let’s say 25%), he will invest. For a $5.6 billion market opportunity five years down the road, that means Mr. Douglas will be buying so long as the company is worth less than $1.8 billion today, Mr. Douglas will be buying.
Each of these investments are positioned for some kind of secular super-trend, some of which people knowingly acknowledge and talk about, others of which Mr. Douglas is clearly early in recognizing the opportunity. All in all, there are two key elements to his analysis: first is the subjective analysis of the companies’ business and market opportunity, and next is the objective mathematics, based on probabilistic outcomes and his CAGR objectives. It is in these subjective metrics that his skill is clearly superior. His ability to identify and quantify market opportunities for his portfolio companies is simply uncanny. Whether it is energy drinks, fine men’s apparel, digital postage or a movie display platform, Mr. Douglas has tremendous skill at identifying the largest market opportunities, targeting the company best positioned to prosper, and quantifying the investment upside in order to make a concentrated wager. Call me impressed.