Etszite is private, patient capital. We hold few positions, we hold them long, and we prefer businesses that would still make sense if the market closed for seven years. The olive tree is not our logo. It is our policy.
Principles
Everyone reads the same filings and rents the same models. The only advantage reliably available to a private investor is a holding period nobody else will tolerate. An olive tree fruits in seven years and peaks in forty. So do the best positions.
A grove in a storm looks like disaster and is nothing. A grove sold in a panic is a real one. We measure risk as the chance of being forced, or frightened, into selling what we understood at exactly the moment understanding paid.
Concentration is not bravado; it is the honest admission that genuine understanding is scarce. We would rather know twelve businesses to the root than rent opinions on two hundred.
Every seventh year the land rests, by law older than markets. We keep reserves and pace so that no year, however bad, can force the grove. Rest is not idleness. It is what makes the next six years possible.
Ben Zoma's answer is the only risk-management sentence that has never needed revising. Enough, recognized on time, is the rarest position in the market. We hold it deliberately.
Approach
We buy durable, understandable businesses and productive assets, at sensible prices, with capital that answers to no calendar. No leverage that can force a sale. No positions that need explaining twice. Decisions are written down before they are made, and reread in the seventh year.
Letter I — Why the olive tree
Two thousand years ago the Talmud recorded a man planting a carob tree that would not fruit for seventy years. Asked why, he said: as my ancestors planted for me, so I plant for my children. There is no better statement of investment policy on record, and none since has improved on it.
The olive is the same argument, made in wood. It pays nothing for seven years and almost nothing for twenty; then it pays for four hundred. Every generation that owned it looked patient to its neighbors and obvious to its grandchildren. The trees on the Galilee terraces have outlived every currency they were ever valued in.
Most capital today is managed the way annuals are farmed: planted, forced, harvested, gone, four quarters a year. We manage ours the way the terraces were managed. Slowly, with pruning, and with the settled expectation that the best of it is not for us.
— Etszite Capital