Philosophy

At 2nd Market Capital we seek to capitalize on mispricing by maintaining a deep knowledge of the REIT universe.  Noise and sentiment swings frequently bring about mispricing, but it is often fleeting and obscure. Our preexisting knowledge base, which we work tirelessly to maintain, allows us to pounce on opportunities as they arise and act decisively to minimize adverse results.

Style Box

While our philosophy and process do not require a particular style, our historical tendency is to be small cap and value.

It is in the small cap value space that our competitive advantage is at its greatest. While we consider ourselves knowledgeable on all things REIT and REIT-adjacent, the market is also knowledgeable on the massive REITs. It is in the small, the cheap, and the obscure that we have a relative knowledge advantage.

Allocation of Research

Alpha is ubiquitous; thousands of stocks outperform each and every year. The trick is to find a research process that affords consistent discovery of positive alpha. There is an inherent trade-off in the allocation of research hours. One can develop broad investment knowledge or deep investment knowledge, not both. At 2nd Market Capital, we have limited our investment universe to REITs and REIT-adjacent securities, such that we can go very deep. We remain unconcerned with all the potential alpha that exists outside of REITs; someone else will find it. Instead, we focus 100% of our effort on finding alpha within REITs and REIT-adjacent securities and avoiding negative alpha within REITs. We believe superior depth of expertise provides us with the best possible chance of outperforming on a consistent basis.