Third Moment Capital
Third Moment
(noun) – statistics
Indicates the degree of asymmetry for a probability distribution (also known as "skew").
We expect that the vast majority of stocks are priced efficiently at any given time. (the third moment = 0)
Occasionally, idiosyncratic circumstances create favorable setups. (the third moment is positive)
Favorable Skew: We look for setups with high returns for favorable outcomes and/or low downside for poor outcomes, relative to the frequency of their respective occurrences.
Investment Objective
Third Moment seeks to outperform market rates of return over a multi-year holding period, while maintaining significantly lower volatility. We pursue strong absolute performance through a highly diversified portfolio, with capital preservation as a core priority.