For this issue we have the pleasure of interviewing Nicholas D'Agnillo, CEO and Founder of River Ace Capital.
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Hi Nick, thanks so much for taking the time out to do this interview.
Can you please tell readers about your background, and how you got involved in investing?
Yeah sure, it is great to connect. I was interested in gambling & investing at an early age and was reading all the investment books I could get my hands on as a teen while also playing cards as much as I could.
Games like gin rummy, poker, high low jack and books like one up on Wall Street, the intelligent investor, rich dad poor dad etc.
I got a job as a dealer at Foxwoods casino after high school and would deal high stakes blackjack on weekends and holidays while studying finance and psychology at Bryant University during the week.
I was amazed at the sums of money some people were able to lose and I always tried to strike up a conversation to see what industry or field this type of success was coming from, the common denominator was always real estate.
I was able to save a large percentage of my wages in my 401K for a couple years and use that for the downpayment on a 3 family home. This was my first large investment and becoming a landlord was a new endeavor.
During this time I was playing as much poker as I could while finishing my degree and learning the ins and outs of property management.
In 2009 in the middle of the global financial crisis I received my finance degree, it was of little value at the time. I had been making more money playing poker than I was dealing blackjack for a couple of years at this time so I made the transition to poker full time from 2009-2013.
In 2013 I was looking for something more scalable and less emotionally swingy than poker.
At this point I had been managing my couple of rental properties for close to a decade so I decided to explore professional property management. I founded Nexus Property Management and the company was a fast success and later on I started to franchise the business model in 2017.
After leaving the day-to-day operations at Nexus I began to spend more time on my investing and poker.
I started Ace River Capital in 2022 after some successful trades during the pandemic with the idea of growing a fund as the years go on.
What key things did you learn from poker and property development/management that has helped you become a better stock investor?
I think the main thing I took away from poker that helps me in all areas of life but especially investing is probabilistic thinking and the ability to make quality decisions with limited information.
Having money at risk in each poker hand and new variables to consider with each betting round is great training to focus on the variables that matter and make the best decision possible with your available information.
I think much of that helped me found Nexus Property Management and grow it to a franchise so quickly. Real estate investing is very similar where you have to make assumptions and take risks based on the probabilities of success.
Why made you decide to allocate more capital to public companies rather than private companies or more real estate investing?
I enjoy the flexibility and large array of options at my disposal with investing in public companies.
Real estate was a great tool early in my investing career to lower expenses, take advantage of leverage with my limited capital and produce some cash flow.
The leverage available gets greatly reduced after the first purchase and the management of rental property requires a great deal of oversight.
Adding those factors to the lack of opportunity with the current state of interest rates and prices, I am leaning towards growing my stock portfolio as my primary investment avenue.
What type of public businesses or situations do you like to invest in?
I try to find companies that have strong competitive advantages or moats in a niche business that I believe can grow in total addressable market or importance in the future.