How Nick Sleep and Qais Zaharia built Nomad Investment Partnership

Executive overview

Most investors chase ephemeral information and trade constantly. Nick Sleep and Zak Zaharia did the opposite: they disconnected from market noise, read deeply, and concentrated heavily in a handful of businesses they understood for decades.

Their framework was simple — find companies that share scale economies with customers, hold them for years, and let compounding do the work. The result: a ~10x return over 14 years, $2 billion in profit for investors, and a retirement at 45.

Good things grow — but only if you let them.

Background and origins

• Sleep grew up comfortable being an outsider; a formative read of Zen and the Art of Motorcycle Maintenance shaped his conviction that quality of action matters above all else.
• Zaharia fled Iraq as a child after his family was purged; his father later went bankrupt speculating in stocks he didn't understand — a lesson Zak never forgot.
• They met during the 1997 Asian financial crisis: Sleep was hunting cheap stocks at Marathon Asset Management; Zaharia was the iconoclastic broker willing to find what no one else would buy.
• Attending Berkshire Hathaway's annual meeting together was a turning point — Buffett and Munger's long-term owner mindset reframed what investing could be.
• In 2001, Sleep launched Nomad Investment Partnership from within Marathon; Zaharia joined as co-manager.

Principles they built the firm around

• Named Nomad deliberately — willing to go anywhere in search of value, unconstrained by benchmarks.
• One goal: 10x net asset value. They worked backwards from that to decide what to ignore.
• Treated all ephemeral information as perishable: "information, like food, has a sell-by date."
• Practiced intentional disconnection — no broker pitches, no daily news, no macro bets, no options or leverage.
• Applied a "no asshole rule": turned away irritating investors regardless of wealth.
• Spent their time reading annual reports and visiting companies until they were "blue in the face."

Destination analysis

• Asked three questions about every business: Where is it headed in 10–20 years? What must management do today to get there? What could prevent it?
• This framework applied equally to personal decisions — health, relationships, legacy.
• Focused on inputs required to fulfil a business's potential, not on quarterly outputs.
• Sought insights with long shelf lives; dismissed data that would be worthless in 12 weeks.

From cigar butts to quality compounders

• Started by buying deeply cheap assets in Thailand, Zimbabwe, and the US — businesses trading at a quarter of asset replacement cost.
• Realized the flaw: when cheap stocks rebounded, you had to sell and hunt again. The strategy didn't scale.
• The stagecoach mistake crystallized the lesson: bought at 14 cents, sold at 90 cents feeling clever — the stock hit nearly $4. They "felt like horses' asses."
• Shifted to Charlie Munger's view: buy wonderful businesses at fair prices and hold indefinitely, subcontracting capital allocation to great founders.

Scale economies shared — the earned secret

• Studied Walmart, Dell, Southwest, Tesco, Geico, Nebraska Furniture Mart, and Henry Ford's Model T price cuts.
• Identified a single unifying business model: pass the benefits of scale back to customers, creating a loyalty flywheel that compounds over decades.
• Costco was the first company to introduce them to this model (purchased at $30 in 2002, when Wall Street hated the low margins).
• Costco's members saved $5 for every $1 Costco kept — low margins were a feature, not a flaw.
• Virtuous cycle: higher revenues → scale savings → lower costs → lower prices → higher revenues.
• Nick's summary: "Most big successful corporations eventually lapse into mediocrity. Costco kept growing by giving back instead of grabbing all the spoils."

Amazon — the model at internet scale

• Sleep encountered Bezos pitching in London in 1997 but took years to fully grasp Amazon's advantage.
• Recognized Amazon Prime as the Costco membership model applied to e-commerce: "I know exactly what game they're playing."
• Began buying aggressively in 2005 at ~$30/share; at times Amazon represented 70% of the fund.
• Bezos's own words to shareholders (2005) matched their thesis exactly: returning efficiency gains to customers creates a long-term free cash flow flywheel.
• Amazon, Costco, and Berkshire became the three-stock portfolio Sleep held in retirement.

Slow knowledge, then fast action

• Encyclopedic base of knowledge compounds like capital: years of study allow instant pattern recognition.
• Sam Walton ran one store for five years; decades later opened hundreds of Sam's Clubs in a handful of years.
• Li Lu read Value Line cover to cover; later could scan a page in seconds and know if something warranted further investigation.
• Buffett's 50 years of annual report reading lets him filter important from unimportant faster than anyone.
• Nick and Zak's years of deep research meant that when they saw Amazon Prime, they recognized it immediately.

The fund's arc and dissolution

• Nomad fell 45% in 2008; rather than panic, they upgraded the portfolio, concentrating further into highest-quality names.
• Over the following four years, Nomad returned 404%.
• Closed the partnership in early 2014 at ~$3 billion in assets, having returned ~$2 billion in profit.
• Nick's motivation: "It's not the cake that gratifies us. What we found gratifying was the process… the cake was a happy byproduct."
• In retirement, Zaharia kept ~70% of his net worth in Amazon (never sold a personal share). Sleep held Amazon, Costco, and Berkshire.
• By 2018, Amazon had grown to 70%+ of Sleep's net worth; he sold half in a single day at $1,500/share and "hated it."