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- Dev Kantesaria
"Be a business analyst, not a market, macroeconomics, or security analyst."
- Charlie Munger
In a world obsessed with the latest stock tips and trading strategies, one investor quietly builds wealth through what might seem like the most boring approach imaginable. Dev Kantesaria, founder of Valley Forge Capital Management, has mastered the art of extreme selectivity - running a portfolio so concentrated it would make most financial advisors break out in cold sweats.
The Doctor Who Became a Market Master
Before dominating the investment world, Kantesaria walked a different path. As a trained physician, he brought a surgeon's precision and scientific rigor to investing - a background that shaped his methodical approach to finding quality companies. This medical mindset manifests in his investment process: just as a doctor can't afford to make mistakes in diagnosis, Kantesaria believes investors can't afford to compromise on business quality.
The $1 Million to $100 Million Journey
Starting with just $1 million in 2007, Valley Forge Capital has grown to manage over $1 billion. Yet unlike most successful fund managers who expand their holdings as they grow, Kantesaria has maintained an unusually concentrated portfolio of just 8 companies - with his top 5 positions making up 90% of the portfolio.
Dev's approach to investing mirrors the famous Stanford marshmallow experiment. He often asks potential investors: "Are you willing to wait a few extra minutes to get the second cookie, or will you eat the first before the time is up?" This simple question reveals his philosophy about patience and delayed gratification in investing.
Beyond Traditional Metrics
While most investors focus on traditional metrics, Kantesaria has developed his own unique framework:
The "Fishing Pond" Theory
Rather than casting a wide net, Kantesaria maintains a strictly curated "pond" of potential investments. His elimination process is ruthless:
No capital-intensive businesses
No highly competitive industries
No unproven business models
No turnaround stories
No business model transitions
The Power of Saying "No"
Perhaps most remarkably, Valley Forge often goes years without making a new investment. In an industry where activity is often mistaken for value creation, Kantesaria's ability to sit still and wait for the perfect opportunity sets him apart.
The Three Multi-Baggers That Define His Approach
1. S&P Global: The Crisis Opportunity
Buying in the aftermath of the 2008 financial crisis at around $20 per share, Kantesaria saw what others missed - a business with near-zero marginal costs and an insurmountable moat. This investment has returned over 2,500% since purchase.
2. Intuit: The Software Giant
His 2016 investment in Intuit near $100 per share demonstrated his ability to spot high switching costs and pricing power. The stock now trades above $600, yet Kantesaria believes the company's best days lie ahead.
Perhaps his most brilliant insight was recognizing FICO's monopolistic position in credit scoring. Since his 2018 investment, the company has demonstrated remarkable operational leverage, adding $423 million in revenue while increasing operating expenses by just $44 million.
The Anti-Consensus Approach
What makes Kantesaria's success particularly interesting is how it flies in the face of modern portfolio theory. While academics preach diversification, he practices extreme concentration. While others chase the next big thing, he seeks businesses that will look the same in a decade.
The real secret to Kantesaria's success might be his unusual background combination:
Medical training that instilled disciplined analysis
Outsider perspective that helps him avoid industry groupthink
Scientific mindset that demands evidence over speculation
Patient temperament that allows positions to compound
Looking Forward
Today, with Valley Forge producing estimated returns of 15% annually since 2007 (compared to the S&P 500's 10%), Kantesaria's approach stands as a testament to the power of selectivity and patience in investing. His story suggests that in a world of increasing complexity, the highest returns might come from the simplest approaches - if you have the discipline to execute them.
The question for investors isn't whether Kantesaria's approach works - his track record speaks for itself. The real question is: Do you have the temperament to wait for that second cookie?
Some of Dev’s holdings are on my watchlist right now. Access my complete watchlist in our community.
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