Jeremy Kokemor takes an old-fashioned approach to investing. He buys stocks in undervalued, solid companies and holds the securities for a long period of time.
After a career in finance, Kokemor founded Richmond’s Right Tail Capital last year and has taken that approach to investing money for his clients. He researches companies and tries to find value hidden in the weeds.
“My portfolio is pretty concentrated,” Kokemor said. “It will usually be 10 to 15 stocks. I want to own them for three-plus years. I think one of the few remaining advantages out there is to think longer term than most investors in the stock market.”
Another difference is that Kokemor’s personal wealth is also in the portfolio.
“My family, my wife and I, are invested right alongside, so we suffer together, and we win together,” he said. “We have a large percentage of our net worth invested alongside everyone.”
Kokemor traces a lot of his interest in investing to his upbringing. His parents divorced when he was young, and his mother raised him as a single parent. Life, at times, was challenging.
“I felt the financial strain of our family,” Kokemor said. “My mom was on food stamps for a while. I got my first job when I was like in sixth or seventh grade helping a teacher during summer school. I was making like three or four bucks an hour.”
After high school, he earned a bachelor’s in economics from the University of Virginia and worked in investment banking. He later earned an MBA from Harvard Business School.
“I got to meet a bunch of incredible people from all over the world,” Kokemor said.
He eventually landed at T. Rowe Price Group Inc. and started to build his reputation as a long-term asset manager. Kokemor said some of his clients are people who have known him for a long time and have seen his philosophy on investing.
He knows his approach can be boring, or “like watching paint dry,” as he says, but the goal is to create quality returns over a long period of time. He seeks to find value and not focus on quick gains.
“If you watch CNBC or the financial news, everybody is so focused on what happened today,” Kokemor said. “What piece of news came out about inflation or unemployment. I understand why the industry is that way, but if you can take a longer-term view and buy higher quality businesses and pay a below or below average price, you can grow a portfolio.”
He has around 30 clients and $10 million under management. His goal is to slowly gain more clients and grow the business. All the clients that he started with were people that he knew, but he was gained several clients through referrals.
“I want to find more like-minded investors,” Kokemor said. “Over the next two to four years, the $10 million that I am managing, maybe that number becomes in the tens of millions. But I want to make sure the investor aligns with Right Tail. There might be an investor who has a lot more money but maybe they only care about short-term returns.”
Right Tail has a two-fee structure. One, he takes 25% percentage of the gains above 6% — something he said he learned from Warren Buffett. The other is a straight 1.25% annual management fee.
He likes to invest in software, business services, distribution and some retail. He pointed to Ferguson PLC, which sells parts to HVAC, plumbing and other trade industries, as an example. Kokemor said the company understands its industry and provides a valuable service in a fragmented marketplace.
He does not like to invest in life sciences and biotechnology. He believes the science is too complicated for him and said other people understand those industries a lot better than him.
“If I’m doing a good job and the returns are good, then everything else will take care of itself,” Kokemor said.