TIP708: WHY WALL STREET’S PLAYBOOK IS BROKEN

W/ HARRIS KUPPERMAN

22 March 2025

On today’s episode, Kyle Grieve chats with Harris Kupperman about his investing strategy based around concentrated bets on macro and events. Harris has decades of market experience and shares his thoughts on why investors have so much difficulty navigating the markets.

Harris Kupperman is Praetorian Capital Management LLC’s founder and chief investment officer. He focuses on inflecting trends and event-driven strategies. He’s also the author of Kuppy’s Korner, a widely followed investment blog. In addition to his investing work, he serves as Chairman and CEO of Mongolia Growth Group, giving him firsthand experience as an operator.

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IN THIS EPISODE, YOU’LL LEARN:

  • Unlocking macro investing secrets that actually work in real markets
  • How Harris shifts between strategies based on market conditions
  • The hidden advantage of focusing on absolute returns over benchmarks
  • Why cutting low-conviction positions can unlock capital for bigger winners
  • The case for moving fast when investing in inflection point businesses
  • How averaging up in commodity cycles can multiply your returns
  • Why Harris believes many MAG-20 stocks aren’t worth the hype
  • Why asset-heavy businesses still hold massive value in today’s economy
  • Why stubbornness and patience are key to real investing success
  • Hedging: A smart risk strategy or just a waste of returns?
  • And so much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:03] Kyle Grieve: Today’s guest is Harris Kupperman, the founder of Praetorian Capital, A fund that has absolutely crushed the S&P 500, delivering net returns of 711% since 2019 compared to the S&P 500’s total return of 155%. Now, Harris has a unique and investing style, blending businesses that benefit from secular inflections or cyclical tailwinds with event-driven special situations.

[00:00:26] Kyle Grieve: Like any value investor, he loves a good deal, and lately he’s been finding plenty in hard assets. While many investors have shifted towards capital like businesses, Harris has taken an opposite approach. About half of his capital is invested in hard asset rich companies. His reasoning is pretty compelling.

[00:00:43] Kyle Grieve: Inflation dries up the replacement costs of these assets that benefit existing owners. There’s limited supply in industries that he’s invested in, such as shipping energy and real estate, and this limited supply strengthens pricing power. Many of these assets generate massive amounts of cash flows. And then on top of that, wall Street tends to undervalue hard assets, which creates great buying opportunities.

[00:01:06] Kyle Grieve: And then since these assets are undervalued and you mix that with the strong cash flows, this allows companies to buy back shares below intrinsic value. And then on top of that, the reason this kind of opportunity exists today is that institutions have offloaded some of these assets for non-vet reasons, which have created these opportunities with significant upside and lower risk.

[00:01:24] Kyle Grieve: Another thing that makes Harris stand out to me is how he runs his fund. Instead of structuring it like a traditional investment vehicle, he truly treats it like his own personal account with others just along for the ride. While many fund managers invest a large portion of their net worth in their funds, they often face restrictions on what they can and can’t buy due to institutional constraints.

[00:01:44] Kyle Grieve: Harris has structured his fund to remove much of that, allowing him to invest exactly as he would if he were only managing his own money. His approach does come with some pretty wild price swings, but he expects that he’s not focused on relative returns. He’s after absolute returns. Since the industry is so benchmark driven, that leaves opportunities for investors willing to buy businesses that may struggle for a few quarters but have a bright future ahead.

[00:02:07] Kyle Grieve: That’s where Harris prefers to fish. If you enjoy learning about unconventional, but highly effective ways to succeed in today’s markets, you won’t want to miss this conversation. Now let’s dive into this week’s episode with Harris Kupperman.

[00:02:23] Intro: Since 2014 and through more than 180 million downloads, we’ve studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Kyle Grieve.

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