Source: Smart investors.
Author: Ina Professor Rosa, who leads the "Blackjack Society" club at Massachusetts Institute of Technology, has taken in the smartest students in the school. Every weekend, they go to Las Vegas to play blackjack and win the city with their strong mental calculation and memory skills. Blackjack is the game with the closest winning rate for both sides in gambling. Winning this game means that Thorp has to deduce the corresponding strategies of millions of card situations. This mathematical genius, known as the "quantitative pioneer," is highly respected in both the mathematics and investment circles, but his name is not known to the public. Jack Schwager, who has interviewed hedge fund masters such as Dalio and Druckenmiller, once said that Thorp was the smartest fund manager he had interviewed. He is the first modern mathematician to successfully use quantitative models to analyze risks, and also the first mathematician to achieve great success in personal wealth as a result. Since he started, a group of "quantitative experts" have emerged, such as the young geniuses of New York State University Stony Brook Applied Mathematics Department - Thorp is their "dean." Simmons, who was only 30 years old, once served as the director of the mathematics department. After Thorp returned from Las Vegas, he used his mathematical research to write a novel called "Beat the Casino," which sold very well, and Thorp was warned by the Las Vegas casino as a result. Later, he decided to move his mathematical game from Las Vegas to the stock market on Wall Street because of concerns about life-threatening situations. For him, the stock market is a new form of gambling: "Understanding gambling games such as blackjack is one of the best ways to enter the investment world. You need to learn how to manage money, calculate winning probabilities, and think about how to act when you have an advantage. Gambling is a simplified form of investment. Both can be analyzed using mathematics, statistics, and computers. They both require capital management and choosing the appropriate balance between risk and return. Even if everyone's bets are in your favor, if you bet too much, it will still have disastrous consequences." Bill Miller is also obsessed with numerical games, and he even studied gamblers. When Thorp first decided to help others manage their money, one of his investors happened to invest in Buffett's partnership fund, so the investor introduced Thorp to Buffett's dinner party, allowing Buffett to examine Thorp. Thorp certainly got Buffett's approval. He mentioned two crucial influences of Buffett on his career: first he helped himself establish a hedge fund, and later he made a considerable investment by investing in Berkshire. If Thorp's story is to be summarized, it's a story of a genius being addicted to games, repeatedly seeking advantages, surviving, winning, and then leaving to enjoy life. 01 Genius Addicted to Mathematical Games.

In the second quarter, Amazon's performance greatly exceeded expectations. On August 3rd, Amazon released its impressive second-quarter report among the FAAMG companies: quarterly revenue of $134.4 billion, an increase of nearly 11%, reversing the trend of single-digit growth over the past year; net income turned from a loss to a profit year-on-year, reaching $6.75 billion, a new high since the fourth quarter of 2021, while the net loss in the same period last year was $2.028 billion.

After the financial report was released, Amazon soared by 8.27%, increasing its market value by nearly $120 billion.

Nomad Investment Partnership, a British hedge fund, is highly praised in the industry for its early discovery and long-term holding of Amazon.

Since being attracted by Bezos' speech in 1997, Nomad Investment Partnership has always been bullish on this global retail giant, investing substantial amounts in Amazon. Since 2005, with its price increasing tenfold, Amazon has accounted for around 40% of Nomad's assets.

In Nomad's view, Amazon is one of the few companies that can 'share economies of scale' with its customers. It is the 'accelerated version of Costco' and has the strength to continuously compete with its competitors.

01 A letter to Buffett: 'You won't easily get rid of us.'

On June 3, 2014, Nomad, who had been a shareholder of Berkshire for 10 years, sent a letter to Buffett, informing him that he had sold his shares in Berkshire because he and his partner, Qais Zakaria, decided to close Nomad, which had been in operation for 13 years.

However, this is not a complaint letter, but a letter of gratitude to Buffett. They attribute Nomad's outstanding performance to the "operational achievements" of the companies they invested in.

However, the two managers of Nomad do not intend to say goodbye to Berkshire. They have already planned to repurchase Berkshire's stock through their own charity organization. They told Buffett, "You won't get rid of us that easily!"

If it weren't for Nomad's unique style and amazing performance, this letter would not be worth mentioning. From September 10, 2001, to December 31, 2013, under the management of Sleep and Zakaria, the fund's return rate was 921.1%, compared to Morgan Stanley Capital International (MSCI) World Index of 116.9%. During the same period, the return rate was 804.2% higher than that of the MSCI World Index.

(Note: These numbers exclude Nomad's performance fees. The fund's pre-fee annualized return rate is 20.8%, the post-fee annualized return rate is 18.4%, and the post-fee annualized return rate of MSCI World Index is 6.5%.)

In other words, during the same period, investing 1 million dollars in this index would turn into 2.17 million dollars after 13 years, while investing 1 million dollars in Nomad would soar to 10.21 million dollars! It is rare to see long-term investors who can consistently outperform the index year after year, but Nomad persisted for 13 years.

Moreover, this performance was achieved by Nomad Investors in very few stocks.

Before the liquidation in 2013, Nomad Investors' US stock holdings were only in four companies: 66.3% in Amazon, 14.7% in Costco, 10.7% in Liberty Global (a British television and broadband company), and 8.3% in Berkshire.

Sliplu and Zakaria are not interested in traditional investment practices; Zakaria even sneers at the "gambling" nature of Wall Street. They always stay away from the market, keep a low profile, to the point where you can't even find their names in the queue of legendary investors.

But the outstanding performance of the two, along with their later public letter to Nomad Investors partners, has sparked curiosity and respect among many well-known investors:

Bill Miller, who claims to admire people who are "completely independent" and have "clear thinking," and who has beaten the index for 15 consecutive years, invested in Nomad Investors; Monish Pabrai, who imitates Buffett, praised Sliplu for "deep research and high investment concentration"; Guy Spier, who went to a charity lunch with Buffett along with Pabrai in 2008, called Sliplu "one of the most profound thinkers in the investment world"...

The 13 years of Nomad Investors' existence was actually an "experiment" by Sliplu and Zakaria, where they tested how to invest, think, and act in "high quality" ways. They did not want to establish an expensive, large-scale fund, have no interest in appearing on CNBC TV shows, or being featured in Forbes magazine, and do not want to buy planes or yachts.

Their 'experiment' goal was to increase Nomad Investors' net asset value by 10 times. So, after almost achieving the goal of 10 times in 2013, the two closed Nomad Investors and enthusiastically engaged in charity work from then on. They established the IGY Foundation and managed their personal investment portfolio through the entity "I.G.Y. Ltd.".

According to the 13F disclosure in the first quarter of 2023, "I.G.Y. Ltd."'s US stock holdings still have familiar faces: 35.83% in Costco, 35.54% in Amazon, and 28.63% in Berkshire.

The letter sent to Buffett received a reply 9 days later: "You and Zachariah have made the right choice. Your life has just begun."

Excellent managers deserve to be noticed. Anyone who wants to achieve significant and sustained returns should study Slipp and Zachariah's investment methods. Munger said that what is more important is what they don't do, so it is also worth studying what they ignore.

It should be noted that Nomadic Fund's sources are extremely stable long-term funds (mainly investors from Marathon Capital, including pension funds, university endowments, etc.). Currently, domestic fund investors have a relatively short holding period, and after three years of market "beatings", they are very concerned about drawdowns. Therefore, the investment principles of the two managers must be considered in conjunction with specific market conditions.

02 A landscape designer who loves meditation and an unsuccessful meteorologist

Slipp dreamed of becoming a landscape designer since he was young, hoping that the parks and spaces he designed could keep people away from the hustle and bustle. After graduating from the geology department of the University of Edinburgh, he had the chance to work as an intern analyst at a small fund company.

Slipp values ​​the spiritual practice of meditation and sitting quietly. He embraces Eastern Zen thinking and Buddhist ways, making this Scottish person stand out. In 1995, Slipp joined Marathon Asset Management.

Marathon Capital, a unique investment company, is a vibrant London investment company that is extremely low-key in the industry with no sales or marketing, but enjoys high brand recognition. A team of over 50 billion US dollars in assets. They are known for their bold bets on futuristic technology in reverse betting, and many of China's internet giants are also their investment targets.

(Note: You can read the book 'Capital Return' to learn about Marathon Capital's investment framework, which includes their annual investor letters.)

The mentor of Slipp, co-founder of Marathon Capital, is Jeremy Hosking. This British eccentric likes to collect vintage steam engines.

"He is naturally critical of traditional beliefs," Slipp said. "He likes to buy the assets that are most despised by others that he can find..." This has a significant impact on Slipp's later management of Nomad.

Zakaria, born in 1969, is an Iraqi immigrant. After graduating from the University of Cambridge with a degree in mathematics in 1990, he worked as a stock analyst at Jardine Fleming, a leading asset management company in Hong Kong at the time.

Due to his father borrowing money to speculate in the stock market during his childhood, "being led to bankruptcy by despicable people (a stockbroker)", Zakaria is full of doubt and even disdain for the position of stockbrokers and the 'gambling nature' of Wall Street.

After being forced to resign from Jardine Fleming in 1996, Zakaria finally obtained a position as a stockbroker in the Asia-Pacific region at Deutsche Bank after several twists and turns, earning income by selling stock advice to institutional clients of the bank. Zakaria was once very distressed, and Marathon Capital saved him.

In 1997, during the Asian financial crisis, Hosking and Slipp searched for cheap stocks in the depressed Southeast Asian market, and they found the extraordinary Zakaria in an Asian brokerage firm.

The gears of fate begin to turn.

Slip and Zachariah meet regularly to discuss the crazy trades they have discovered in Singapore, Hong Kong, and the Philippines. While most stockbrokers are obsessed with easily sellable hot assets, Zachariah is fascinated by deeply discounted cheap stocks.

Hoskin and Slip are drawn to Zachariah's 'treasure hunting' ability. During the crisis, investors could buy Southeast Asian stocks for one-fourth of the asset's reset cost. Marathon Capital invested approximately $0.5 billion at the time, and within a year, the Asian economy began to rebound, with Zachariah playing a crucial role in Marathon Capital's great profits.

Hoskin says to Zachariah, 'When you can't sell stocks to others, please call us.'

Whether it's selling junk stocks to investors who have no knowledge of prices or providing buying recommendations to investors who want to get rich quickly before the frenzy subsides, Zachariah finds it difficult to tolerate.

In April 2000, Zachariah left Deutsche Bank, a place that exhausted him physically and mentally, and joined Marathon Capital in London as an analyst, becoming Slip's colleague.

A month later, they both attended the Berkshire Hathaway shareholder meeting. Buffett and Munger, as usual, spoke at the meeting about the companies they planned to hold for decades, without choosing IPOs or profiting at the expense of others' losses.

Zachariah is very excited, finally seeing an investment method that doesn't require compromising morals. 'They didn't intend to gamble, they truly considered the companies!'

Previously, Stilp had been persuading the bosses of Marathon Capital to launch a concentrated investment fund, wanting to emulate Buffett's method of selecting businesses 'as principled as possible,' as well as Buffett's treatment of Berkshire shareholders, because 'marketing-driven companies only want to sell funds, they don't care about customers.'

Like Palbe, Buffett's many styles of behavior have deeply impressed him, such as only receiving an annual salary of 0.1 million USD...

In 2001, the bosses of Marathon Capital finally agreed to support Stilp in launching the Nomad Fund. He requested Zachariah to co-manage the fund with him.

So, on September 10, 2001 - the day before the '9/11' event, the Nomad began trading. At that time, investors faced the threat of terrorism and economic chaos, the market suffered heavy losses, and many investors had not yet recovered from the previous technology bubble, and were cautious about taking any action.

However, what Stilp and Zachariah boldly aimed for were the temporarily sluggish businesses amidst the turmoil. 'We wanted to prove that another way of investing and behaving is feasible,' Stilp said. 'We don't have to do all the nonsense of Wall Street.'

Threshold of 6% annualized return

Stilp and Zachariah, one a frustrated landscape designer and the other an unsuccessful meteorologist, were not industry insiders for a long time, like two 'outsiders,' so they couldn't quite accept the industry's unspoken rule - their interests are better than the customers'. They launched an uncommon fund fee plan: only charging low fees that cover costs, instead of the usual 1% or 2% asset management fee at the time. When the fund's annualized return exceeds 6%, they will receive 20% of excess returns. If the fund performance is poor, no fees will be charged.

They only charge low fees to cover costs, rather than the usual 1% or 2% asset management fee. When the fund's annualized return exceeds 6%, they receive 20% of excess returns. If the fund underperforms, no fees are charged.

After a few years, they added more difficulty to themselves: if the rate of return does not reach the threshold of 6%, they will refund the portion of the fee previously charged to shareholders.

Zachariah said, 'We won't act like others, their behavior is like robbers. Putting money in our own pockets is absolutely not our intention.' This sentiment was echoed by Sleep.

For investment companies, ensuring company profits are maximized and ensuring investor profits are maximized are often conflicting interests. For example, rapidly expanding the fund size in the short term can generate more management fees, thereby increasing company profits. However, when the size exceeds the fund manager's strategic capacity, it results in a lower rate of return and less flexibility in adjusting positions.

Similarly, during market bullish sentiment, various fancy marketing tactics for new funds... This is certainly not something individual fund managers can control. So, those fund managers who openly discourage such practices should not only be praised for their 'conscience', but also for the company's long-term vision and responsibility.

'It is difficult to get a man to understand something when his salary depends on his not understanding it!' (Upton Sinclair)

From the beginning, Nomad is a tool to achieve investor returns rather than maximize assets. Sleep said, 'If you are in the business of asset raising, there will be sales, compliance, and client control personnel, and the company will become a complex machine. If you want to achieve compound interest and achieve good investment performance, you don't need these... We only need to focus on selecting high-quality stocks, and everything else is irrelevant.'

In the view of Sleep and Zachariah, sales and marketing are distractions. They rarely accept media interviews and do not care about the amount of potential customer investments. They explicitly stated that if Nomad's scale hinders performance, they will return the funds to shareholders and refuse to accept new investors.

Starting from 2004, they have closed the fund multiple times and prohibited new subscriptions. They only reopen subscriptions when they believe it is a good time for deployment.

They will also reject investors who do not align with their own beliefs or are “annoying”, regardless of whether the other party is wealthy. The people who invest in nomads must also sign a document confirming that the investment period is no less than 5 years.

Hedge funds commonly employ strategies that focus on short-term performance and rapid wealth accumulation, which Slipp refers to as “Investment Viagras,” a term rejected by the nomads. They do not use leverage, short stocks, speculate in options or futures, bet on macroeconomics, trade excessively based on short-term news, nor have they ever ventured into foreign financial instruments like LYONS and PRIDES.

Slipp and Zacharia play a “long and simple game.” They buy stocks that they have deeply researched and then hold onto them for the long term.

Today, many young public fund managers like to publicly promote themselves as “deep value investors, making money from company growth.” However, a quick look at their positions shows that they are often less than 80%, with a high turnover rate. It is natural to wonder, if they have truly researched the company in depth, why do they not have confidence in long-term high positions? Can they really manage their time between research and promotion when they frequently appear as “influencers” seeking attention?

04 The long and simple game

Slipp and Zacharia refuse to use a series of standard investment practices, stating, “we just want to get rid of what we don’t like.”

Firstly, they deliberately disconnect themselves from the noise and try their best to ignore all short-lived information.

Slipp says that information, like food, has an expiration date, some of which are particularly prone to decay, while others have long shelf lives. The “expiration date” serves as a screening criterion to determine the value of the information.

In the eyes of Slipp and Zacaria, investors should not waste their energy on the unknown. Ephemeral news reports, like the soap operas that play out in the market every day, are superficial, short-lived, and unreliable, and do not help them predict the next economic situation.

Whether it is the latest macroeconomic data or companies that outperform analyst expectations, short-term shareholders will constantly react to these trivial 'false stimuli'.

They also ignore the sell-side research published by Wall Street, as those short-term financial data and income forecast information will be worthless in a few weeks.

'We pile them up and start looking at them about a month later, thinking to ourselves, 'So boring,' and we're happy that we didn't use them as a reference at all,' Slipp and Zacaria frankly told stockbrokers that it is futile to sell stocks to them.

They even reduced their use of the Bloomberg terminal. The two of them installed the Bloomberg display that symbolizes the status of professional investors on a low table without chairs. Slipp said, 'If you use it for 5 minutes, you'll say, 'Oh, my back hurts.''

Just like checking the email frequently, investors sometimes involuntarily check the data terminal frequently. But we have all experienced that kind of heartbeat of expectation to see surprises, which disrupts our state of mind for other things at hand.

Slipp and Zacaria just want to think quietly, 'We read annual reports until we are exhausted, and we visit every company as much as possible until we are bored.'

05 Building Houses on Rocks

In addition, Nomad highly concentrates its investments and holds positions for the long term.

In his 2002 "Letter to Partners", Slip mentioned,

"Our investment portfolio is focused on a few industries: media and publishing; leisure and entertainment, and casinos; hotels and real estate. At the same time, we also have smaller positions in companies in industries such as telecommunications and cable television, durable consumer goods and finance, as well as computer services and office automation.

The following is the investment distribution chart at that time segmented by region and industry:

From the chart, it can be seen that Nomad holds significant positions in the Asia-Pacific markets, undoubtedly leveraging Zacharia's decade of stock research experience in the region.

In 2006, Slip mentioned in the "Letter to Partners" that Nomad's average holding period for stocks is 7 years, while other investors hold holdings in Nomad's investment portfolio of U.S. stocks (excluding Berkshire) for an average of only 51 days.

Even in inflation-plagued Zimbabwe, when other investors were staying away from this abnormal African market, Slip invested in the Zimbabwean national cement factory and held it for 7 years, making a profit of 5 times.

"Our performance does not depend on our buying and selling behavior, but on our holding behavior, so the main investment activity is holding, not buying and selling," said Howard Marks.

"We can never understand why investors change stocks every few months, what benefits does this bring to the whole society?" Slip and Zakaria were shocked by this trend of short-termism in the market.

They believe that the risk of holding a small number of stocks (usually about 10) is smaller than holding hundreds of stocks, and diversification inevitably leads to mediocre returns.

"We don't understand many things," Slip said, "so for us, it is reasonable to only hold stocks of certain companies because we truly understand them." Slip's favorite quote is derived from the Bible:

To build a durable and sturdy house, it must be built on rock rather than sand.

Their holdings are most typically in Amazon, Costco, and Berkshire. Despite the pandemic, these three companies have demonstrated exceptional resilience to this day, especially Costco and Amazon, whose business volumes have increased during the crisis.

06 "Super high-quality thinkers"

The reason Slip and Zachariah named the fund the wild "nomad" is because they don't want to be constrained by anyone, they go to all the places where they can find valuable investment targets, even those corners are not popular. They don't intend to replicate a particular index or benchmark index for good performance.

In terms of selecting investment targets, in the early days they followed Marathon's capital cycle investment method, buying undervalued stocks at a price of 50 cents with an intrinsic value of $1 and a compound annual growth rate of free cash flow of 10% over five years. They also called it the "cigar butt investment," in simple terms, it means selecting not necessarily the best companies, but cheap ones.

In the Philippines, they invested in the largest cement producer, Union Cement, whose stock price dropped from 30 cents to less than 2 cents; in Thailand, they invested in the newspaper publisher, Matichon, whose stock price dropped from $12 to $1, with a trading price of 0.75 times revenue; in the United States, they bought preferred shares of Lucent Technologies, a troubled star telecom company, whose market value had plummeted by 98% at the time...

The nomads made substantial returns on these investments, doubling their net assets by the end of 2003. But this speculative investment strategy had a flaw: when mispriced companies rebounded to fair value, their prices were no longer cheap. They had to sell and find new cheap stocks.

To solve this problem, the two began to look for opportunities to hold funds for the long term, gradually aligning with Buffett Munger's investment philosophy: buy and hold high-quality businesses managed by visionary and insightful managers, which is more likely to generate sustainable profitability in the future.

Investors who focus on short-term results often like to ask: How much profit will the company make in the next 3 months? What is the target price for the stock in 12 months? But Slip and Zachariah focus on what the company needs to invest in to unlock its potential.

For example, does the company enhance its relationship with customers by providing quality products, low prices, and efficient services? Does the CEO allocate capital reasonably to increase the company's long-term value? Has the company paid low wages to employees, mistreated suppliers, betrayed the trust of customers, or engaged in any short-sighted behavior that could jeopardize its ultimate success?

In Slip's 2004 "Letter to Partners," he referred to those high-quality companies as "super high-quality thinkers":

In the office, we have a company list called 'Super High-Quality Thinkers'. This is not an easy club to join, and the list currently has 15 companies...

'Super High-Quality Thinkers' is our best guess for companies where shareholders can give up their stock trading rights (allocating capital themselves), because they know their capital will be well allocated in the future... That's where we want to go.

When we consider companies, the primary considerations are the quality of the business and the quality of management's capital allocation decisions. The longer investors hold stocks, the more the results are linked to these two indicators.

07 Economies of scale shared

Later, they started thinking about the characteristics that could make a company's successful shelf life last longer, and they ultimately discovered a powerful business model that they called 'shared scale economies'.

The first company that caught their interest was the American discount retailer Costco.

In 2002, due to investor concerns about Costco's low profit margin, its stock price dropped from $55 to $30. However, Srip and Zacariah started investing in the company because they believed that Costco's practice of providing value to customers was undervalued by the market.

At the time, customers paid a $45 annual membership fee to enter the warehouse and purchase high-quality products at low prices. Costco marked up its merchandise by no more than 15% above cost, while a regular supermarket might mark up by 30%.

As a result, there is a continuous increase in repeat customers, who spend more money in other stores at Costco, bringing in huge revenue for the company. Costco takes advantage of this by negotiating with suppliers to continuously lower procurement costs, and subsequently further reduces prices.

Costco shares the benefits of economies of scale with consumers. According to estimates by Slup and Zachariah, for every $1 earned by Costco, its members can save $5.

Slup said, "A simple and profound reality is that when a company lowers costs and profits, and shares its growing scale with customers, a virtuous spiral is formed."

Because of their recognition of Costco's business philosophy, the nomads' investment in Costco continues to increase. By 2005, the nomads' investment in the company accounted for 1/6 of the fund's assets.

Today, Costco is still one of the important assets in their personal investment portfolios, and there seems to be no intention of selling in the near future.

In addition, among the companies they studied, there are also Walmart, Dell, Southwest Airlines, and Tesco, which have followed a similar path for a long time. These highly efficient companies keep costs at a low level and share the returns of economies of scale with customers.

Buffett's favorite GEICO Insurance and Mrs. B's Nebraska Furniture Mart have also continuously lowered costs during their development, saving customers a lot of money and gradually expanding their competitive advantage.

Companies of this kind usually have a culture shaped by visionary founders rather than employees, who emphasize details and value customer experience. Slup said, "They are all very unconventional."

These legendary figures include Sam Walton of Walmart, Jim Sinegal of Costco, Herb Kelleher of Southwest Airlines, and Rose Blumkin (Mrs. B) of the Nebraska Furniture Mart.

And Amazon is the ultimate practitioner of the shared economy concept. In 1997, when Amazon was preparing to go public, founder Jeff Bezos' speech in London caught the attention of Slip. So he and Zakaria spent several years studying Amazon's competitive advantage, and in the end, they found that Bezos was following the path of Ford, Walton, Sinegal, and others, and that the internet made it easier for them to implement their classic strategies.

In 2005, Bezos wrote in his letter to Amazon shareholders, "Returning the benefits of increased efficiency and economies of scale to customers in the form of low prices creates a virtuous cycle that will lead to more free cash flow in the long run."

Slip and Zakaria were in line with Bezos in spirit. Later, when Amazon introduced the Prime membership program, Slip commented, "Amazon has become a faster version of Costco."

Amazon's stock has played a key role in their impressive performance. Since 2005, its price has increased tenfold, leading to it accounting for around 40% of the fund's assets at one point.

After retirement, Zakaria held the most Amazon shares. He has never sold Amazon in his personal investment portfolio, with 70% of his assets coming from this stock. The remaining funds were invested in Costco, Berkshire Hathaway, and Boohoo, a UK-listed online outfitters.

Closing the 08

In addition to serving as fund managers, Slip and Zakaria are also members of the Santa Fe Institute, one of the top five research institutions in the United States, alongside Bell Labs. With their academic backgrounds, the scope of their thinking is extremely broad.

So in the "Letter to Partners", they not only have an investment value analysis of heavily weighted stocks, but also a deep discussion on investment psychology and how investment managers can win together with shareholders. Although the letter was written 10 years ago, its viewpoints are still relevant today and definitely worth our attention.

However, there is no complete Chinese version of the "Letter to Partners" domestically yet. Snowball user "Toby's Research Notes" is continuously translating, and this article is deeply inspired by it.

In early 2014, Slip and Zachariah closed Nomad, with the fund's assets under management reaching approximately $3 billion.

In an email, Slip wrote that many funds "aim to make a big cake, and what gives us satisfaction is not the size of the cake, but the process of solving investment problems. Along the way, we learn and strive to do our best work, which is the goal we have set in our hearts. Making a big cake is just a pleasant byproduct."

This echoes Buffett's value investment beliefs.

After their retirement, the two returned external funds to investors, turning the fund into a family workshop, as they planned to devote their remaining years to charity. Hence, the scene where they write a letter to Buffett at the beginning unfolded.

In the spring of 2014, Slip and Zachariah once again published the "Letter to Partners", stating:

"Investing is a wonderful, thoughtful adventure, but it can also be self-centered, a tendency that may be reinforced by the accompanying wealth."

Once our wealth exceeds the amount of X, the true meaning will come from reinvesting in society through charitable donations. This is a challenging and wonderful adventure, but doing charity makes you feel like the world is functioning properly.

The 13 years of nomads were not only an experiment for the two, but also a "rational, metaphysical, and almost spiritual journey." Slipp and Zakaria found zen in their daily behavior and deep comfort in their unconventional investment principles.

References

[1] "Richer, Wiser, Happier," William Green, China Youth Publishing House

[2] The full collection of the NOMAD INVESTMENT PARTNERSHIP LETTERS TO PARTNERS (2001-2014), Nick Sleep and Qais Zakaria

[3] Translation of the Nomad Fund's "Letter to Partners", "Toby's Research Notes", Xueqiu

[4] The flywheel effect of economies of scale: the soul drummer of the nomad fund, Slipp. Teacher Andy, East Money Information

Editor/Somer