Sizing risk and unexpected arb failures

Where does real edge still exist in public markets and how do you size risk when certainty doesn’t exist? In this episode, I talk with Ari Levy, Founder and CIO of Lakeview Investment Group, about applying probability theory, arbitrage, and disciplined position sizing to public equity investing. Ari explains how early lessons from card counting and game theory shaped his approach to risk, why small-cap markets remain structurally inefficient, and how activism, arbitrage, and management access can create asymmetric outcomes—without blowing up the portfolio.

Highlights:

• Probability theory as the foundation of investing
• Why position sizing matters more than prediction
• Hidden risks in “risk-free” arbitrage trades
• Structural inefficiency in small-cap equities
• Passive flows as a tailwind for active small-cap investors
• Friendly activism and aligning boards with shareholders
• When public companies should be private
• Arbitrage vs. fundamental stock picking—and when each works
• Avoiding value traps in a tech-driven world

Guest Bio:

Ari Levy is the Founder, President, and Chief Investment Officer of Lakeview Investment Group, where he oversees portfolio construction, risk management, and investment decision-making across public equity strategies. A long-term, engaged owner, Ari frequently works with management teams and boards on strategy, capital allocation, and governance. Earlier in his career, he served as a Vice President and Share Partner at Advisory Research and was President of Levy Acquisition Corp., later serving on the board of Del Taco until its acquisition by Jack in the Box. Ari holds a B.A. in International Relations from Stanford University.

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Sponsor:

AlphaSense is the AI-powered market intelligence platform trusted by 85% of the S&P 100, helping investment professionals make faster, more confident, data-driven decisions. Built for hedge funds, asset allocators, private venture capital firms, and investment bankers, AlphaSense uses advanced AI and powerful search across premium proprietary content to surface the insights that matter most—before the market moves. Elevate your research and stay ahead of the competition. Visit https://www.alpha-sense.com/howiinvest/ to learn more.

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Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction to probability theory and sports statistics (0:56) Running a blackjack team and risk management lessons (5:09) Idiosyncratic risk and ETF examples (6:33) Sponsor: AlphaSense channel research (7:44) Managing exposure in investments (8:17) Inefficiencies and opportunities in small cap companies (14:01) Activist investing strategies (18:13) Case study: Quipt Home Medical (20:15) Timeless investment advice for success (21:15) Historical performance and impact of tech on value investing (23:01) Closing remarks and call to action