Why we created this blog?
We created this blog as a place to put ideas on paper on potential equity investment opportunities, current watch list of companies we follow and broader macro economic thoughts. It is an opportunity to throw our ideas to the public and even receive feedback. Testing of investment thesis and understanding of the opposing side of any investment is critical.
As with everything in life, you get what you paid for. We do not solicit or sell any investment products.
Our investment strategy is concentrated fundamental equity with the goal is to achieve returns above the market over the cycle.
In the investment business, there is not a lot of opportunities where you can buy great businesses at reasonable price. We keep an eye on a set of companies with an idea of the price we would like to own the business. We do the work so we are prepared to act during periods of market dislocation.
Under performance is nature of life, we are comfortable owning what we know than owning the market. For that to be achievable we have to step out from the index and look at stocks based on their fundamentals and not simply their size.
Our investment criteria can be defined as:
- Forward looking perspective
- Admit that we have a value bias – always looking out for a bargain without getting cut
- But not afraid of paying for growth companies
- Use leverage to enhance returns.
- Take advantage of thematic opportunities opportunities as it present itself
- Market always has a tendency to overshoot
- Index unaware
All information on the site does not constitute advice or solicitation for investment. We do not sell any investment products.
Fundamentals are Key
While we primarily focus on equities it is important to understand the broader macro economic investment conditions. We read and thus have opinions on wide range of topics from Investment themes and reports on country specific ETFs like China ETF and REITs so we can understand what tools we can use to latch on potential long term secular growth stories.
Forward Looking – Go Where The Puck Is Going to Be
One of the most important investment analysis skill for any successful investor is the ability to think on a forward looking basis.
The judgement is reached from reviewing the strategy, product, market position and industry trends.
Growth at A Reasonable Price (GARP)
We look for value in companies trading below their intrinsic value. We look for not just value today but for the medium and long term.
One angle of understanding potential value is try to understand the companys’ growth prospects. This can mean looking beyond current valuation and price in the growth based on our judgement.
High valueation does not mean expensive as companies can grow into it. Growth means looking for small caps that are growing to mid and mid caps that are growing to large cap.
Leverage can be double edge sword we are conscious of the risks when using leverage in our portfolio. Mistakes were learned where even the best ideas and positions can be shaken out by rapid movements made by the market. Markets always move faster than you expect. Gearing levels is maintained to protected from sharp moves in the market.
Avoid The Dumb Money
Index funds has become goto investment option for retail investor. We are biased being a old school stock picker.
Time is On Our Side
When people pitch stocks, most include a catalyst that will move the current price to what they think it is worth. We like catalysts however our investment opportunities does not require the realization of the catalyst to achieve our return objective. Rather we seek entry level where we are paid to wait. For example, we like stocks that can be misunderstood by the market but in the mean time provides a sustainable dividend yield.
Even in the instances where the cashflow of the business is not paid out to shareholders. If we believe the management will act in the best interest of the shareholders (which is not a stretch as we would never invest in companies in which we do not like the management) then value created is still there but embeded in the book value.
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