Our emphasis is on what to buy rather than when to buy
Guessing the next move of the stock market in terms of direction and timing is nothing but speculation. Our goal is “investing” in good companies trading at a significant discount to their underlying values, with a long-term horizon.
Identifying discrepancies between value and price
A stock is an ownership interest in an actual business with an underlying value that does not depend on its price. It is not just a ticker symbol, which is usually distorted by psychological excesses.
Bottom-up stock selection
We base our investment decisions on value & business fundamentals, not on trends, the macro-economy or politics. Value is a function of risk, return and growth and changes constantly.
Disregard majority opinion
Since low valuations are usually accompanied with high uncertainty and bad news, most of the time, value investing also often demands being a contrarian. We are prepared to appear being initially wrong as a result of moving against the crowd and not afraid of investing in unpopular names at unpopular times.
Risk increases with the level of price, not volatility
What we pay for a stock determines its actual investment risk, which is the probability and potential amount of loss, not the stock’s volatility relative to an Index. Therefore, we think that the most effective investment management approach to risk is making a rigorous, fundamental, bottom-up analysis.