We Study Billionaires – TIP755: My Process for Finding Great Investments w/ Kyle Grieve

Date: September 21, 2025
Host: Kyle Grieve

Episode Overview

In this solo episode, host Kyle Grieve offers an in-depth, reflective walkthrough of his personal investment philosophy and evolving framework for finding and managing outstanding stock investments. Drawing on lessons from personal failures and experiences, inspiration from renowned investors, and candid examination of both wins and misses, Kyle unpacks the specific principles, processes, and guardrails that underpin his approach. The episode is ideal for investors looking to sharpen their mindset, build robust repeatable processes, and cultivate an environment that rewards patience over activity.

Key Discussion Points & Insights

1. Formative Investing Experiences and Early Lessons

• Crypto Speculation & Hard-Learned Lessons (02:07)
  • Kyle's entry into investing was through cryptocurrencies in 2017, resulting in a rapid quadrupling of his money, shortly followed by a 97% loss due to speculative trading and leverage.
  • Lessons:
    • Be skeptical of technical indicators.
    • Never use leverage.
    • Buy only what you understand.
    • Every action has a downside.
    • Avoid shorting.

“Long story short, I eviscerated about 97% of my crypto assets over a very short period.” — Kyle Grieve (03:18)

2. Transition to Value Investing & the Power of Education

• The COVID-19 crash in 2020 acted as an entry point into equity markets for Kyle. Time in lockdown was spent consuming investing books, watching educational content, and analyzing company reports.
• Early investments spanned a variety of sectors, geographies, and strategies, leading to mixed results but rich learning, especially about cloning ideas from celebrated investors and understanding competitive advantages.

“Luckily, the lesson from my days of losing money were very, very fresh in my head.” — Kyle Grieve (07:58)

3. Investment Goal Setting and Its Implications

• Aggressive Goal: Doubling capital every 5 years (~15% annualized return).
• Pros: Enables a focus on potential multibaggers and high selectivity.
• Cons: Heightened risk from chasing high expectations, potential to overlook stable quality for exciting growth.

“The benefits of having a more aggressive return benchmark are that if I’m right on my picks and I achieve my goal, then I’ll just make money faster.” — Kyle Grieve (11:10)

4. Absolute vs. Relative Performance; Mindset Shift

• Kyle focuses on absolute returns against his personal target, rather than obsessing over benchmarks like the S&P 500.
• Performance tracking is done quarterly to minimize psychological biases and noise.

5. Business Owner’s Mindset—Not Trader or Speculator (16:33)

• Stocks are perceived as ownership in real businesses. Like a true partner, he endures through temporary adversity rather than panic selling.
• Emphasis on inactivity as the default, holding on through intrinsic growth and value appreciation regardless of market drawdowns.

“While I may have periods of higher activity, my default should be inactivity.” — Kyle Grieve (17:43)

6. Investment Buckets: Quality Businesses & Micro Cap Inflection Points

• Quality Bucket (63% of portfolio):
  • Seeks established businesses with wide moats, strong management (with insider ownership), and consistent high ROIC.
  • Focus is on directionality—whether business quality is improving or deteriorating.
• Micro Cap Inflection Points:
  • Small, under-the-radar companies showing accelerating growth—look for at least two consecutive quarters of 25%+ earnings/revenue growth, founder-led, and signs of capital efficiency.
  • Key is to identify and exit quickly if thesis breaks.

7. Management Analysis Checklist (24:00)

• Detailed criteria including transparency, incentive alignment, capital allocation discipline, and, most critically, integrity.

“Management integrity is just number one. I would never budge an inch on that.” — Kyle Grieve (24:45)

8. Capital Efficiency & ROIC

• Prefers businesses with stable and ideally improving ROIC, as an indicator of durable competitive advantage.

9. Sell Criteria

• 1. Discovering a better risk/reward opportunity.
• 2. Price runs 5–10 years ahead of value (inspired by Mohnish Pabrai and Ian Cassel).
• 3. Broken investment thesis; typically due to loss of interest or realization of being incorrect.

10. Portfolio Management & Sizing

• Prefers a concentrated approach (8–13 holdings, often aiming for ten 10% positions).
• Willing to let outstanding positions become very large (up to nearly 30%) without trimming winners.
• For micro caps, starts small (1%), scaling after thesis confirmation.

“If you have Michael Jordan on your team, you don’t bench him when he’s carrying your entire team.” — Kyle Grieve (50:33)

11. Averaging Up & PEG Valuation

• Inspired by Paul Andreola, Kyle sometimes adds to positions as they rise in value, provided the thesis is being validated by performance.
• PEG ratio used for microcaps to find deep growth–value bargains.

12. Circle of Competence

• Admits to pushing himself outside his comfort zone, but stresses the need for rigorous study whenever venturing away from familiar territory.
• Repeated errors often linked to investing outside his competence.

13. Global Investing vs. Home Bias

• Started with global ambitions, but after adverse experience in China (now categorically avoided), maintains a Canadian tilt due to informational advantages.

14. Measuring Performance: Operating Results Over Price (58:05)

• Inspired by Warren Buffett, prioritizes tracking owner’s earnings and operational progress over market quotes.

15. Noise Reduction & Environment Design

• Minimizes stimuli that drive impulsive activity—no financial TV, carefully filtered social media, selective alerts.
• Emphasizes the need for an environment that encourages inaction.

16. Behavioral Edge Over IQ

• Cites Buffett’s view: “Success in investing doesn’t correlate with IQ... what you need is temperament to control the urges.”
• Frequent self-audits and application of Bayesian updating after each earnings cycle to combat confirmation bias and psychological misjudgments.

17. Stupidity Reduction Over Brilliance

• Models after Charlie Munger: avoid standard “stupidities” through internalizing lessons from personal and others’ failures.

18. Affinity for Boring Businesses Enhanced by Technology

• Excited by mundane businesses made superior through smart adoption of tech (e.g., John Deere’s automation), rather than speculative moonshots.

19. Mistakes of Omission (64:58)

• Reflects candidly on businesses he sold too early or failed to research (e.g., Gatekeeper Systems, Kraken Robotics, HIMS and Hers)—but accepts such misses as inevitable, focusing on learning from them without regret.

Notable Quotes & Timestamps

• On Discipline and Humility:

  “I've developed a consistent, repeatable philosophy that I believe will allow me to compound capital at attractive rates for many, many years and decades to come.” — Kyle Grieve (00:06)

• On Avoiding Overtrading:

  “Successful investors do very few things, but do them well.” — (Quoting Seth Klarman, 17:43)

• On Integrity:

  “Management integrity is just number one. I would never budge an inch on that...” — Kyle Grieve (24:45)

• On Letting Winners Run:

  “If you have Michael Jordan on your team, you don’t bench him when he’s carrying your entire team.” — Kyle Grieve (50:33)

• On Behavioral Advantage:

  “Success in investing doesn’t correlate with IQ. Once you have ordinary intelligence, what you need is temperament to control the urges that get other people into trouble.” — (Quoting Warren Buffett, 61:48)

• On Omission Errors:

  "There’s just, you know, so many ideas out there and if you look at enough of them, you’re going to miss out on a bunch of winners. The key is to figure out what you can understand well enough within a decent period of time.” — Kyle Grieve (66:41)

Important Segment Timestamps

• Early Crypto Experiences and Lessons: 02:07 – 07:29
• Transition to Value Investing/Early Equity Bets: 07:30 – 11:00
• Investment Goals & Framework: 11:05 – 13:58
• Absolute vs. Relative Performance: 13:59 – 15:55
• Business Owner Mindset: 16:33 – 20:05
• Investment Buckets & Process: 20:06 – 23:33
• Management Checklist: 24:00 – 27:40
• Sell Criteria Detailed: 36:50 – 41:30
• Portfolio Construction (Position Sizing): 46:25 – 51:55
• Circle of Competence: 53:50 – 56:28
• Operator’s (Buffet’s) Focus on Operating Results: 58:06 – 59:48
• Behavioral Edge/Self-audits: 61:48 – 63:20
• Mistakes of Omission & Reflection: 64:58 – End

Summary Flow

Kyle Grieve’s investing philosophy has been forged through a mix of painful personal losses, voracious learning, and direct emulation of greats like Buffett, Munger, and Pabrai. Using a combination of disciplined process, focus on absolute returns and business realities, careful assessment of management, and behavioral self-regulation, Kyle crafts a framework for approaching investing with clarity and humility. He balances concentrated bets on quality compounders with opportunistic stabs at microcap inflection points, always mindful of cognitive biases, risk of activity, and the power of inaction. The episode is a tour de force of practical investing wisdom for the serious DIY investor.