Idea Brunch with Yuval Taylor of Fieldsong Investments
Welcome to Sunday’s Idea Brunch, your interview series with great off-the-beaten-path investors. We are very excited to interview Yuval Taylor!
Yuval is currently the portfolio manager of Fieldsong Investments, a boutique data-driven long/short equities fund he founded in May 2024. Before launching Fieldsong, Yuval worked for 30 years as a book editor and author of non-fiction books and later helped manage Portfolio123, a small financial technology firm. Fieldsong focuses on “safe, boring, under‑the‑radar” small/microcap companies, plans to cap fund inflow at $80 million, and was up ~57% in 2025.
Yuval, thanks for doing Sunday’s Idea Brunch! Can you please tell readers a little more about your background and why you decided to launch Fieldsong Investments?
I was a math geek as a kid, but put my bent on hold when I went to college; after that I focused mainly on editing and writing. Editors don’t make much money, and professors (my wife was one) don’t either, so for about 25 years we barely got by on cost-of-living increases and a little help from my folks. But the whole time we contributed as much as we could to retirement accounts. In 2013 we went to Bolivia for a year, and the cost of living there was about 20% of what it was in Chicago. I was working remotely and my wife was working part time. And we found we had a bit of extra money. I wasn’t sure what the best thing to do with it was, so I asked my sister-in-law, who was a private banker, and she advised me to invest in ETFs. And then I went down a rabbit hole. I spent all my free time thinking about investing. It was like a new game to me: can you beat the stock market? My previous extracurricular interests—poker, music, film—all took a back seat to my new obsession. Of course, I lost a lot of money over the next couple of years. But in late 2015 it came to me: the best way to invest is to look at every investment from every angle conceivable. And the best way to do that is to use ranking systems, so you can rank every stock on as many factors as possible. After that, I was off to the races. I made so much money that my wife and I were able to retire early. But I couldn’t stay retired for too long. What’s the next thing you do after you prove that you can invest your own money wisely and effectively? You invest other people’s money wisely and effectively! But I had another impetus: I wanted to become a major donor to charity. I established a private foundation with the help of my wife and kids, and I wanted it to eventually give away millions. So that’s why I decided to launch Fieldsong Investments.
Can you please tell us about your research process and how you construct your portfolio?
I use ranking systems on Portfolio123 to choose which stocks to buy and sell. Developing these ranking systems is time-consuming work. I am constantly reading and thinking about investment factors (by which I mean simply a reason to buy or avoid a company’s stock), and most of those factors are dependent on financial statements. So I’ve done a lot of research into what makes sense from an accounting standpoint, and what works in the markets: I do a lot of backtesting. I’ve also had to research various hedges: a short-based hedge to protect the portfolio during market downturns; a currency hedge to protect it from currency risk; and an odd little derivatives-based fillip that makes money during what I call Red Bull markets: periods when investors favor the riskiest stocks, like the ones I short, and shun the kinds of safe stocks I’m long on. Almost all of my research is done using backtesting, but I also have read a lot of investing-related books. The ones which informed my thinking the most are Frederik Vanhaverbeke’s Excess Returns, James O’Shaughnessy’s What Works on Wall Street, Peter Lynch’s One Up on Wall Street, Mihir Desai’s How Finance Works, Charles Lee and Eric So’s Alphanomics, and the works of Michael Mauboussin. I’ve also read a great number of white papers, both academic and investor authored. Lastly, because I’m a writer, I’ve written over a hundred articles on investing, and those are almost all the product of intense research.
As for portfolio construction, I base it on a very simple procedure: buy the five top-ranked stocks and hold them; if you need cash to buy more top-ranked stocks, sell the lowest-ranked stocks you hold. And then I add lots of bells and whistles. I segment my portfolio into ten little subportfolios (by region and by data provider) and use nine different ranking systems to populate them. I weight my positions based on expected return, which in turn is based on rank minus transaction cost. I set optimal weights for my various hedges and leverage use using worst-case scenario backtests and I vary those weights a little depending on market volatility and momentum.
How did 30 years in publishing/editing change how you research companies or your investment process? Did any editorial habits translate directly to detecting “financial storytelling”?
Editing and writing go hand-in-hand. So I had a built-in proclivity to writing about investing, which forced me to do research that I might not have otherwise done. The writing also hurt me, though, because I spilled my secret sauce too frequently. But I don’t think my editorial process intersected with “financial storytelling” per se.
In your recent interview with Maj Soueidan, you disclosed that your quantitative process “uses 200+ factors.” What are some of the most important factors for investment success? How did you come up with these factors and have any changed over time?
Well, at the risk of spilling my secret sauce again, my biggest factors are size-related (market cap and volume), stability-related (especially price volatility), industry-related (I rank industry groups on how well they respond to my factors), growth-related (especially how the latest quarterly report compares to the same report last year), momentum-related (using a number of different measures), and sentiment-related (especially EPS revisions over the last quarter). Of course, I also use value factors like free cash flow yield, forward earnings yield, and my own intrinsic value calculation. And I use a ton of quality factors, most prominently free cash flow return on assets, regular return on assets, free cash flow return on invested capital, gross margin minus industry average, and cash-flow-based accruals. Of all these factors, some are common, some I came up with from things I read or just thinking things through, and all are backtested in combination with other factors. And yes, many have changed over time as I learn more about the data.
Fieldsong takes “no management fee.” What is your current compensation structure and why did you opt for a no management fee approach?
My partner, Scott Beavers (COO), and I were greatly influenced by an article on compensation structures and their history. (It’s here: https://www.guyspier.com/zero-management-fees-a-survey/). Some of the earliest hedge funds used exactly the same compensation structure we use: zero management fee and a 25% performance fee over a hurdle of 6% per year, with a high-water mark so that we don’t make money on returns that make up for previous losses. This was Warren Buffett’s original compensation arrangement when he started his partnership in the 1950s. We believe we should be paid for performance. Why should an investor have to pay someone to manage his money if the manager’s performance is crappy?