Gangster Returns

Welcome back to the Fountain.

One of the more underrated parts of this newsletter has been the chance to reconnect with people who shaped how I think long before I had the awareness to recognize it. You spend time around certain people early on, and only years later do you fully understand the impact they had on your standards, your decision-making, and how you approach your work.

Steve is one of those people for me.

We’ve known each other since our Ivey days (back in 07’), and even then there was a steadiness to how he thought about things.

Nothing rushed, nothing reactive, just a consistent way of processing the world that felt grounded and long term. Today, he’s the founder of Starvine Capital, an investment firm based in Toronto, and he’s built it in a way that reflects that same approach.

This conversation ended up being less about his incredible 45%+ returns for his clients and more so the process he’s dialled in on. It was one of our favourite conversations.

PACKED WITH VALUE.

Enjoy.

We continue to grow each week, and we’re grateful because it means something is resonating. If someone in your circle would benefit from new ideas, fresh perspectives, and thoughtful conversations, feel free to share this with them.

⏳️ Estimated Read Time: 7 minutes

Was this email forwarded to you? Subscribe here.

Lessons from experts

Steve started Starvine just over a decade ago, but it wasn’t driven by a single moment or frustration.

It was more of a gradual realization that he wanted to operate in a way that matched how he naturally thinks about investing.

He had spent time on both the buy side and sell side, learning from different environments and, more importantly, from the people within them. That period seemed to matter a lot, not just for technical skill, but for developing judgment.

He described it simply as a desire to invest the way he wanted to invest, which sounds obvious, but it takes time to actually get there. Most people either rush into building something before they are ready or stay in environments that no longer fit them longer than they should.

There was a patience to how he approached that transition, and it shows up in how he runs his business today.

When we got into mentorship, what stood out was how much of Steve’s development came from being around thoughtful people and observing how they behaved over time.

He spoke about his experience working under Craig Pho and how impactful it was to see someone who was not only a strong investor, but also very measured in how he approached both success and uncertainty.

One idea that stayed with him was that the results being realized today are often tied to work that was done years earlier.

That kind of thinking changes how you handle both good and bad periods. It creates some distance from short-term outcomes and reinforces the importance of consistency.

He also mentioned that a lot of his early “mentorship” came from reading, particularly Berkshire Hathaway shareholder letters. It’s a good reminder that you can learn a great deal just by studying how people think, even if you never meet them directly.

A theme that also came up throughout the conversation was how your objectives evolve over time.

Early on, it’s natural to focus on finding big winners, the ideas that can generate outsized returns and create momentum. Over time, that focus tends to shift toward something quieter but more durable, which is compounding.

Some of what came from “What I Learned About Investing from Darwin” a book by Pulak Prasad

The book particularly the idea of robustness, which focuses on avoiding zeros. He spoke about how compounding only works if you stay in the game, and that a key part of investing is building in the characteristics that allow something to survive over time.

It was less about finding big winners and more about making sure you don’t make the kind of mistake you can’t recover from, because without that foundation, compounding never gets the chance to work. Compounding Requires Staying Power.

Steve uses a framework he calls MCARV when evaluating opportunities, which includes moats, capital allocation, reinvestment ability, runway, and value. It’s straightforward, but it covers the key elements of what makes a business worth owning over time.

What I liked about it is that it doesn’t try to be overly clever. It just keeps bringing you back to fundamentals, especially in moments where it’s easy to get distracted by noise.

We spent some time talking about how to think about concentration versus diversification, and it’s one of those areas where there isn’t a clean answer.

Steve’s view was less about a specific number of holdings and more about whether your best ideas are positioned in a way that they can actually matter. At the same time, there’s an understanding that too much concentration without the right level of conviction and awareness can create its own set of problems.

It ends up being more of a judgment call than a formula, and probably one that improves with experience. The same idea carries over into how you spend your time and energy as well. If everything is a priority, nothing really is.

The last couple of years have been strong for Steve and his firm, with returns that have meaningfully outperformed the broader market. What stood out, though, was how he framed those results.

Steve shared that his flagship strategy returned:

While his mid and large cap strategy delivered roughly 37% and just over 50% in those same years. He emphasized that despite these strong results, the goal remains steady long-term compounding rather than repeating outsized returns.

There wasn’t much emphasis on trying to replicate those numbers or setting expectations around that level of performance continuing. Instead, he spoke about being satisfied with steady, consistent returns over time, even if they are less dramatic.

That kind of perspective tends to anchor you when things inevitably shift, which they always do.

When I asked about the broader market environment and whether he leans risk-on or risk-off, his answer was that he doesn’t really think about it that way.

His focus stays on understanding the businesses he owns, forming a view on their long-term value, and making sure the price reflects that. It’s a simple approach in theory, but it requires a level of discipline to stick with it, especially when there’s constant pressure to react to short-term movements.

It ties back to a familiar idea that if you’re comfortable owning something without the ability to sell or look at it for 5 years, it’s probably a good investment.

We also talked about how people can think about evaluating investment managers, especially given how much noise there is in that space.

Steve explained the role of a custodian, which is the institution that actually holds client assets. In his case, clients’ funds are held with a third-party institution, and he has trading authority but does not directly control the money.

Clients can log in and see their holdings and activity independently.

That structure creates a level of transparency and separation that is important, particularly when compared to situations where everything is controlled and reported by the same party.

What stood out most in this conversation was how consistent Steve’s approach has been over time. There isn’t much deviation based on what’s happening in the moment, and there isn’t a need to constantly adjust direction.

It’s a steady process, grounded in fundamentals, with an understanding that results tend to follow over longer periods.

In a lot of ways, it’s a reminder that the edge isn’t always found in doing more, but often in doing the same things well, over and over again.

Grateful for conversations that bring you back to what actually matters. Grateful for people who have stayed consistent in how they think and operate.

And grateful for the reminder that most meaningful outcomes take longer to show up than we expect.

Steve, appreciate you taking the time and sharing your perspective.

More Steve Ko :

Eat The Rich The Prophecy Continues to Play Out

Mark Zuckerberg to become Jeff Bezos' neighbor following 'Billionaire Bunker' purchase

Dutch Lawmakers Approve a 36% Tax on Unrealized Crypto, Stock, and Bond Gains

The mega-rich are moving. Here's where they're going.

Some great videos for you

Starvine Investor Relations 2025 investment commentary