Gnostic Capital Management

To Strive, to Seek, to Find and not to Yield

  • McDuff’s doctrine is strategic ownership of exceptional non-cyclical companies that earn high, sustainable EBITDA margins. His forte is the identification of firms that derive disproportionate benefit from notable secular trends.
  • Randolph scours the world for businesses to be held rather than traded. Consistent with his view that secular trends inevitably trump emotional hyperbole, McDuff’s core model portfolio turn ratio has historically been far, far lower than industry norms.
  • Some say that buy-and-hold is dead and call it a lazy person’s way to invest. Those persons might be well advised to remember the words of Bill Gates. “I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it.”
  • Few investors have demonstrated the degree of success in security selection and portfolio assembly, as has McDuff, over the past 20 years. Even fewer have done so with a long-only, unhedged account. Taking into account the incredibly low turn ratio and the lower than expected portfolio volatility experienced over the history of the account; the number of investors, globally, that can report comparable absolute returns, holding publicly traded securities, might be counted on the fingers of both hands. The portfolio stands out as a beacon for those who believe in disciplined active management.

    A $1 million USD investment in the core large cap model account, at inception (07/08/2000) was valued at $40.03 million US., net of fees and expenses (09/30/2020). This represented a compound annual average return of 20.12%.