Here’s Why Right Tail Capital Exited Its Position in The Charles Schwab Corporation (SCHW) in 2023

Right Tail Capital, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Right Tail aims to generate high after-tax returns by investing in high-quality public companies for the long term. The letter discussed the three-year journey of Right Tail Capital since its inception. The firm has grown from approximately $3 million in AUM initially to about $27 million today. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second quarter 2025 investor letter, Right Tail Capital highlighted stocks such as Charles Schwab Corporation (NYSE:SCHW). The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company that offers wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The one-month return of The Charles Schwab Corporation (NYSE:SCHW) was 4.32%, and its shares gained 21.35% of their value over the last 52 weeks. On July 9, 2025, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $92.32 per share, with a market capitalization of $167.743 billion.

Right Tail Capital stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its second quarter 2025 investor letter:

“The Charles Schwab Corporation (NYSE:SCHW) (SCHW; exited early 2023). I detailed the reasons for selling Charles Schwab in the Q4 2023 letter. While the company navigated funding concerns better than expected, and the stock ended up performing well, I felt the thesis had changed. I preferred to spend my time seeking the next great idea.”

Jim Cramer Applauds Charles Schwab (SCHW): “Much Better Than Expected Earnings”

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The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 102 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the first quarter, which was 91 in the previous quarter. In the first quarter, The Charles Schwab Corporation’s (NYSE:SCHW) total revenue increased 18% year-over-year to $5.6 billion. While we acknowledge the risk and potential of SCHW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SCHW and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered The Charles Schwab Corporation (NYSE:SCHW) and shared the list of stocks to buy according to Lakehouse Capital. Right Tail Capital sold its stake in The Charles Schwab Corporation (NYSE:SCHW) in 2023 March due to a shift in the company’s risk profile. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.