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Cool Futures Funds Management Philosophy and Strategy 

We focus on the domains where high resolution ‘science’ impacts directly on our understanding of reality and therefore on the allocation of resources and the calculations of asset values. 

Science is a process of building our knowledge of ‘reality’ utilising the systematic due diligence of empirical observation and measurement, reproducible experiments, and the formulation, testing, and modification of hypotheses. 

This creation of the Enlightenment (modern science) is the basis of all of western civilisation’s advanced technologies, structures, systems, products, investment strategies and wealth. 

Where disruptive ‘next generation’ technologies and disruptive ‘evidence based’ public policies have downstream impacts; where the interaction of these is discernible and likely inevitable; we see over time, dramatic reallocation of resources and recalculation of asset values taking place. 

In public policies and resource allocations pertaining to scientific reality, where abstract reasoning concerning number and quantity; and where experimental reasoning concerning matters of fact and existence; are all absent – we believe these current policies and resource allocations are prone to collapse, “... for (they) can contain nothing but sophistry and illusion.1” 

In a fast-moving investment world, answers to complex questions are proffered at every turn. Many of these answers rely on ‘evidence-based’ public policies and technological ‘investment opportunities’ - which despite their claims, are not science or evidence based at all, but rather, contain nothing but sophistry and illusion.
 
Today’s investment universe is further complicated by the cascade of catastrophic policies and signals the central banks and governments secrete on the price and availability of money and the consequential distortion of resource allocation and miscalculation of asset values. Real-world growth limits the uptake of this huge increase in fiat capital – can there be any transition risks2

We believe we can identify and categorise many of these flawed ‘investment opportunities’ and failing public policies and extract significant value by taking appropriately selected positions.
 
The Fund’s investment strategy is to employ a scientific overlay to ostensibly scientific and technology-based investment opportunities, public policies and social trends, and to apply our rigorous due diligence tools including Hume’s Fork, to the claims made by proponents.
 
In our view, a successful thematic investment strategy relies predominantly on having an ‘edge’ or favourable ‘odds’ to capture value. An ‘edge’ is an insight into the true nature of reality – one, others don’t have. The ‘odds’ are the probabilistic relationships between risk and reward. We strive to have and deploy both, into a range of selected investment strategies and opportunities3

Typically, our long investment positions will focus on undervalued and mispriced opportunities that we believe have the investment, scientific and structural integrity to succeed under foreseeable conditions. 

Conversely, where we identify those ‘investment opportunities’ that we believe are financially, scientifically or technologically flawed, such as subsidy dependent, ‘science or technology-based’ ‘opportunities’, we may choose to take short positions. 

1 An Enquiry Concerning Human Understanding David Hume (1748)
2 There are numerous companies whose entire business models are predicated on virtually free access to unlimited capital and a total dependence on government largess through preferencing often substandard supply and the much-loved subsidy dependent business model 
3 For example, part of our ‘edge’ is our high-resolution understanding of, and access to, certain emerging next-generation scientific insights and clean low-cost energy, industrial and mining processes and their impacts; and for the ‘odds’ the use of statistical modelling and pattern recognition, where subtle predictive signals can be teased out to form the basis of thematic investment systems and scientific insights.