The Intersection of AI and Value Investing with Jim Falbe, Managing Principal of Saguaro Capital Management
This week, we released an absolutely wonderful interview with James Falbe, CFA of Saguaro Capital Management. After spending almost 8 years at Vulcan Value Partners, in 2021 Jim left to start Saguaro. The most unique thing about the Saguaro strategy is that it employs an internally-built AI system that helps with screening for stocks as well as with investment decision making. In fact, Jim and Saguaro are at the forefront of using technology, specifically AI, to enhance the process of a good old fashioned value investing firm. We covered a lot in this interview, including:
How Jim’s experiences at Vulcan have shaped his approach to starting Saguaro;
How Saguaro actually uses AI to enhance its process;
The culture of the firm, including the importance of donating a portion of the profits;
Why a SMID-cap strategy was compelling enough to launch with;
Why he prefers to invest with companies growing inside of their moats;
Creating alignment with investors via fair fee structures; and
The scalability of Saguaro's various strategies.
You can access the full interview here:
Given how the terms AI and machine learning get thrown around a lot these days, I was curious about what Saguaro using AI actually entails. In this clip, Jim gave an insightful answer about amplifying an already solid process.
I hope you enjoy the interview with Jim. Please stay tuned for another excellent episode of Compounders that will be released next week.
Have a good weekend,
Ben Claremon