YAINers Beyond Investments

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For almost a year, Attilio and I dedicated our writing on YAIN to a specific philosophy: investing in high-quality businesses for the long term, guided by the timeless principles of investing. It’s a world of intrinsic value, competitive moats, and margins of safety. To many, this might seem like a purely financial discipline, confined to spreadsheets and market analysis. 

However, in my parallel role as Managing Partner of AmagisTech, I’ve discovered that these principles are far from theoretical. They are, in fact, the most robust and practical framework I have for leading a team, building a business, and navigating the complexities of the tech industry. The lessons learned analyzing balance sheets have unexpectedly become my most valuable tools for managing people and projects.

AmagisTech is a cybersecurity company, specializing in offering Managed Security Service Provider services to companies of all sizes: basically we allow companies to outsource their cybersecurity to us. We pride ourselves on democratising security, making it possible even for SMEs to get the same tools that are protecting huge enterprises. But we don’t forget the latter either, automating and harmonising the defense of complex organisations, so that they can focus on their core business instead of coordinating many different cybersecurity silos.

The hype around the tech industry and in particular AI and cybersecurity is probably at its peak, and it would be easy to be guided by short-term decisions to maximise immediate returns. At AmagisTech I am guided by a contrarian approach, which is completely in line with YAIN’s philosophy: creating long-term value for shareholders (which, spoilers, include myself).

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The Universal Power of Compounding: Beyond the Interest Rates

YAINers know the magic of compound interest. It’s the engine of wealth creation, where returns generate their own returns, creating exponential growth over time. But I’ve learned that this powerful concept is not limited to finance. Compounding applies to everything.

In my professional life I focus on compounding non-financial assets with the same diligence we would a monetary investment:

• Compounding Knowledge: Every new skill you learn makes you more valuable, not just in isolation, but because it connects with their existing knowledge base, enabling them to solve more complex problems. A team that learns consistently doesn't just grow linearly; its collective capability grows exponentially.

• Compounding Trust: Every project delivered on time, every honest conversation, and every promise kept adds to our "trust account" with clients and within the team. This trust compounds, leading to stronger relationships, more autonomy, and smoother collaborations in the future. It's an asset that pays dividends daily.

• Compounding Reputation: A good reputation is built brick by brick, one positive experience at a time. Over the years, this compounds into a powerful brand that attracts the best talent and the right clients without us having to chase them.

Recognizing that small, consistent efforts in skills, relationships, and integrity compound into massive advantages has fundamentally changed how we operate. We prioritize consistency over short-term intensity.

What Matters Most: Cash Flow & ROIC Over Vanity Metrics

YAIN principles teach you to read a financial statement and immediately distinguish between true economic reality and accounting fiction. The stock price can lie, headlines can lie, but a company's ability to generate cash rarely does.

This lesson is critical in the tech industry, which is obsessed with vanity metrics: follower counts, website clicks, pipeline size, or even total turnover. These numbers can look impressive on a presentation slide, but they often mask a deeply unhealthy business. You can have millions in revenue and be months away from bankruptcy.

In my day-to-day job I anchor my decisions in two fundamental, investor-grade metrics:

• Cash Flow: Is the business generating more cash than it consumes? This is the ultimate test of sustainability. Positive cash flow provides freedom, funds our growth organically, and ensures we can weather any storm without relying on outside capital. It’s the economic oxygen our company breathes.

• Return on Invested Capital (ROIC): For every euro of capital—both financial and human—that we deploy into a project, a marketing campaign, or a new hire, what return are we generating? ROIC is the ultimate measure of efficiency and intelligent decision-making. A high ROIC means we are allocating our limited resources wisely to create maximum value.

Before any major decision, we don't ask, "Will this look good?" We ask, "Is this a high-ROIC use of our capital, and will it contribute to long-term, sustainable cash flow?" This focus keeps us grounded, disciplined, and relentlessly focused on building real, durable value. 

The Long-Term Horizon: Investing in People, Not Just Projects

In investing, the greatest returns don’t come from timing the market or chasing quarterly fads. They come from identifying wonderful businesses and holding them for years, allowing their value to compound. The same is true for talent.

At work I resist the urge to make short-term, transactional decisions with our team. I don’t hire for a single project; we hire for a career. This means investing significant time in professional development, mentorship, and creating a path for growth within the company—even if the immediate return on that investment isn't obvious. Just as a value investor ignores market noise, a good manager must tune out the pressure for immediate results at the expense of long-term team health and capability. This builds a resilient, skilled, and loyal team—our ultimate competitive advantage.

The "Margin of Safety": Building Operational Resilience

Benjamin Graham’s concept of a "margin of safety"—buying a security at a significant discount to its intrinsic value—is the bedrock of risk management in investing. It creates a buffer against errors, bad luck, or the unpredictable nature of the future.

In management, the "margin of safety" translates to operational and strategic prudence. At AmagisTech, this manifests in several ways:

• Avoiding Debt: We run a lean, financially disciplined operation, ensuring we are masters of our own destiny and not beholden to creditors.

• Building Buffers: In project management, we build realistic buffers into timelines and budgets. Rushing to meet an arbitrary deadline by cutting corners is the management equivalent of buying a low-quality stock with no margin of safety. It rarely ends well.

• Cross-Training: We encourage knowledge sharing and cross-training to avoid single points of failure. Having multiple team members capable of handling critical tasks is our human capital margin of safety.

This approach doesn't stifle growth; it ensures our growth is sustainable and resilient.

The "Circle of Competence": Focusing on What We Do Best

One of the most powerful rules in investing we haven’t explored in full is simple: know what you own, and stay within your "circle of competence." Trying to be an expert in everything leads to mediocrity and costly mistakes.

This principle is the cornerstone of our strategy at AmagisTech. The tech world is filled with shiny new objects and endless opportunities to chase. Applying this principle forces us to ask critical questions:

• What is our core value proposition?

• Where can we be not just good, but the best?

• What opportunities, while tempting, fall outside our expertise?

Saying "no" to projects or ventures outside our circle of competence is one of the most important things I do as a manager. It allows us to deepen our expertise, deliver exceptional quality in our niche, and build a reputation for mastery rather than being a jack-of-all-trades.

Evaluating Management (Including Myself)

As investors, we spend an immense amount of time scrutinizing the management teams of the companies we analyze. We look for integrity, rational capital allocation, and a clear, shareholder-aligned vision.

Turning that analytical lens inward has been the most profound application of this principle. I constantly ask myself: "If AmagisTech were a publicly-traded company, would I invest in its management?"

This question forces a higher standard of leadership. It demands transparent communication with the team, a rational allocation of our most precious resource—our time—and a clear vision for where the company is headed. It transforms management from a series of tasks into a duty of stewardship, treating our team's effort and our clients' trust as capital that must be allocated wisely for long-term growth.

A Unified Philosophy

The worlds of YAIN and AmagisTech are not separate. They are two expressions of the same core philosophy. Value investing isn't just about stocks; it’s a mindset for building enduring value.

It teaches you to prioritize the long-term over the short-term, to prepare for uncertainty, to focus on your strengths, and to act with integrity and accountability. Whether you are building a portfolio or building a company, these principles provide a steady compass in a world of constant change. And for that, I am not just a better investor, but a far better manager.