VALE A PENA FAZER UMA CARTEIRA AINDA MAIS CONCENTRADA?

Episode Overview

• An introduction to Ryo Asset's new, more concentrated investment fund, the Ryo Compounders.
• A discussion on the philosophy behind building a concentrated portfolio versus a more diversified one.
• Analysis of the key characteristics Ryo Asset looks for in companies for its high-conviction bets, such as governance and capital allocation.
• A look at the fund's strategy regarding local (Brazilian) versus global investment opportunities.

Key Concepts

• Ryo Compounders Fund: A new fund from Ryo Asset designed with a concentrated portfolio of 10 to 15 high-conviction stocks, contrasting with their more diversified funds that typically hold 20 to 30 stocks.
• Concentrated Portfolio Construction: The strategy is not simply to pick the top holdings from a diversified fund. It involves selecting companies where the conviction in governance and long-term value creation is high enough to justify a large position (e.g., 10-14%).
• Capital Allocation as a Key Metric: The selection process heavily favors companies with a proven track record of excellent capital allocation. For companies where there are doubts about governance or future capital decisions, the position size is kept smaller, as they wouldn't be suitable for a high-conviction, concentrated portfolio.
• Global Investment Outlook: The fund is structured to eventually include a significant allocation (around 20%) to international stocks, recognizing that many of the world's great "compounder" companies are global. However, the current focus remains on Brazil due to the abundance of attractive opportunities.

Quotes

• At 00:16 - "A gente fez o Ryo Compounders, né? É, e um pouco da ideia do fundo, assim, né, é uma, é uma discussão que a gente sempre teve de se a gente fazia uma carteira ainda mais concentrada do que a gente tinha." - Luiz Constantino explains the origin and core concept behind creating the new, more focused fund.
• At 01:22 - "Eu acho que tem posição que funciona bem quando ela tá num tamanho adequado de 5%, mas não funcionaria bem 10%." - Constantino highlights that not all good investments are suitable for a large, concentrated position, explaining that factors like governance risk can limit appropriate sizing.
• At 04:20 - "Primeiro, as grandes transformações estão acontecendo lá fora, então as grandes compounders, né, se alongar muito o horizonte, vai ser lá fora." - Discussing the long-term vision for the fund, acknowledging that the biggest growth opportunities will likely be global, justifying future international allocation.

Takeaways

• A concentrated portfolio requires a different level of conviction. It's not just about picking your favorite stocks from a larger portfolio; it's about identifying businesses whose management and governance you trust so deeply that you're comfortable holding a significant position.
• Assess an investment's suitability for a large allocation by your reaction to bad news. If your first instinct during market turmoil or negative rumors is to reduce your position, it may not be a true high-conviction idea suitable for a concentrated strategy.
• While there are significant opportunities in the local market, maintaining flexibility to invest globally is crucial for long-term growth, as many of the best value-compounding companies operate on an international scale.