4Q22 Investor Letter
“In many periods, lower quality/richly-valued companies outperform higher quality/fairly-valued companies. In such periods, our performance would suffer. That's just the nature of the game. Nonetheless, we don’t want our thesis to "take a revolution to play out". As the largest shareholder at Dawnlight Capital, I'm extremely careful with the fight we want to pick. We are risk-averse on the long side and extremely risk-averse on the short side. We think of our shorts akin to Berkshire Hathaway's insurance business. Berkshire has 40% industry share of statutory surplus in its reinsurance businesses but only writes 7% industry premium - they know when the business is not adequately priced, and are very comfortable walking away. ”