Thorpe Abbotts’ philosophy
is rooted in behavioral finance
Based out of Charlottesville, Virginia, Thorpe Abbotts Capital is a value-oriented behavioral-focused investment firm that searches for and exploits behavioral biases in public markets.
The single most important fact about investing.
Only in Lake Wobegon, Minnesota (the mythical town created by the American humorist Garrison Keillor where all of the children are above average) can all investors outperform the market. The average return of all investors must mathematically be equal, before management fees and trading costs, to the average return on all investment assets. This is not a statement of the once dominant, but increasingly widely discredited, academic assumptions that markets are efficient…every time (an investor) buys an asset, thinking that it will produce relatively high returns in the future, another investor is selling that asset thinking that it will produce relatively low returns in the future. One of them is always wrong.
Bruce Greenwald, in the forward
to James Montier’s Value Investing, 2009.
How we get an “edge” over the other side of the trade
The informational and analytical edges other investors have relied upon to outperform the market have eroded away due to the democratization of data and increased level of skill. Thorpe Abbotts is focused on finding and exploiting systematic biases caused by the behavioral mistakes of other investors. This differentiated behavioral edge defines every part of our investment process and provides investors with unique exposure to ever-present human bias.