| |
In pursuing our philosophy of Value & Special situations, we implement the following four strategies, which should eventually bring adequate returns under low volatilities to our clients.
Margin of Safety
- Stocks trading at over 30% discount to their intrinsic value to be included in portfolio
- Risk of loss in the short-term may exist due to market risks
- Margin of safety at entry minimizes risk of loss of investment capital in the long term
- Stocks may fall in price in near term due to market inefficiencies, however, tend to converge with intrinsic value in the longer term
Scuttlebutt
- Qualitative analysis in forecasting the outlook for industries and companies, as a supplement to quantitative analysis
- People related to the target company can be a source of information. These people include customers, employees, competitors, suppliers, industry consultants, etc
Business Perspective
- Investment decision to be made by business-specific considerations rather than the overall stock market outlook
- Such considerations include franchise value, entry barrier, market positioning, economies of scale
Contrarian
- Crowd behavior can lead to exploitable mispricing in the stock market
- Widespread pessimism about the market or a particular stock can drive prices below intrinsic value and over-emphasize risks. Purchasing such distressed stocks can lead to above average gain
|
