Most investors — even those who know what they’re doing — struggle with position sizing. They spread themselves too thin, holding too many stocks and watering down their best ideas. Donville and Gamble? They only hold 10-15 stocks.

”But what we’re trying to do is we’re trying to optimize, right. So we’re only trying to own mid 10 or 15.”

Their mindset: If a stock isn’t strong enough to be a major position, they don’t own it at all.

→ Lesson: If you know what you’re doing, concentration beats over-diversification—bet heavier on what you truly believe in.

Most investors don’t have a system for filtering stocks. Donville and Gamble use the Rule of 40—a simple formula that cuts through noise and spots elite companies before the market catches on.

The Rule of 40 = Revenue Growth (%) + EBITDA Margin (%)

• If a company scores 40% or higher, it means it's growing profitably—worth a closer look.
• Some of their biggest wins were identified before they hit the rule of 40.

”The balance sheets got so distorted that calculating ROE accurately became a problem. So then we started in the last five years pivoting to the rule of 40. All three of those approaches, so the Lynch approach, the ROE approach, and the rule of 40, they’re all kind of trying to get at the same thing, which is some kind of a quick and dirty metric when you’re screening a universe of ten or like a thousand stocks to allow you to get down to 30 that you can take a closer look at.”

→ Lesson: Having a high-quality filter as a way of identifying potential opportunities is something all great investors do.

Pro tip: This is where FinChat Pro really shines.

Most investors believe that the market always prices stocks efficiently. But Donville and Gamble know that investor psychology creates mispricing opportunities—especially in small and mid-cap stocks.

”We keep showing up every day because you never know when, you know, we had, we had a couple of phenomenal investments last year and, you know, it’s just from showing up, turning over rocks, doing our process, then all of a sudden you never know when that’s going to happen.”

How they exploit inefficiencies:

✓ They watch for growth slowdowns that trigger temporary sell-offs—but where the company still has long-term potential.
✓ They focus on stocks with limited analyst coverage—opportunities the market hasn’t fully priced in.
✓ They ignore short-term volatility and look at long-term compounding potential.

→ Lesson: The best opportunities aren’t always obvious. Market inefficiencies exist—if you know where to look.

📉 In 2022, most investors sold off in panic.
📈 In 2023, Donville Kent’s portfolio rebounded 100%

”I remember saying to Jesse as kind of a pep talk: Don’t turn away from the screen. Stay completely engaged through this because when it turns, if you’re on top of what’s good at that turning point, you will make a fortune off of those companies.”

The worst thing an investor can do? Check out when the market is down. What they do differently:

✓ Stay fully engaged, even when it’s painful.
✓ Double down on stocks that are still meeting their investment criteria.
✓ Use volatility as an opportunity to accumulate quality stocks at a discount.

→ Lesson: Risk isn’t just about volatility. Risk is about not knowing what you own and why.

Most investors think too short-term.
Donville and Gamble look for businesses that can compound earnings for decades—because the market constantly underestimates long-term growth.

“Humans think in a linear manner. If a company is going to compound at 15, 20 percent for five years… You could almost put, like, you could put a significantly higher multiple on that and still make money.”

Why compounding stocks outperform:

✓ If a company grows 20% per year for 5 years, even if it appears you overpaid initially, you could still make a lot of money.
✓ Investors tend to misprice long-term compounders because they focus on short-term price swings.
✓ A company with consistent growth & reinvestment ability should always command a higher multiple.

→ Lesson: Real wealth comes from holding great businesses for years—let compounding do the work.

Most investors treat stocks as tickers on a screen—chasing price action instead of real business value. Donville and Gamble approach investing differently: They think like business owners.

“We look at every investment as if we were buying the whole company. That’s how we determine real value.”

→ Lesson: If you wouldn’t buy the whole business, why own a piece of it? Own companies, not just stocks.

Donville and Gamble’s success is further proof that Buffett and Munger’s principles work. Intelligent Investing is built on these same principles—because real wealth isn’t built on speculation. It’s built on discipline.

This breakdown was based on their interview on the We Study Billionaires podcast: TIP699 – Unlocking High-Growth Investments.

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