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Investment Philosophy
Our philosophy is
inspired by the teachings of Mr Benjamin Graham and the long-term success of various US-based
value investors, such as Warren Buffett, Ruane, Cunniff & Goldfarb and
Tweedy Browne. Our objective is long-term
capital growth whilst
minimising the risk of permanent capital losses.
We aim to achieve this
by purchasing investments at a significant discount to our estimate of
their true or intrinsic value. Assessments of intrinsic value will
depend on the nature of the business and may focus on asset values,
existing earnings power, franchise growth, or a combination of these
variables.
Our long-term approach
to investing is characterised by low portfolio turnover. Portfolio
turnover, however, will not be a limiting factor when we deem changes
appropriate. We view risk as the possibility of permanent loss of
capital rather than as a measure of short-term volatility in market
prices.
We do not diversify in
the conventional sense, believing that this risk is minimised by our
intensive research process, by sticking to businesses that are simple to
understand and ensuring that purchases are made at prices that provide
us with a significant margin of safety. We therefore operate with
concentrated portfolios, ensuring that we focus on our most attractive
ideas.
When we have trouble
finding investments to buy at attractive prices, we are prepared to
build up cash reserves and wait patiently. Our disciplined approach has
been developed through many years of analysing and investing in
businesses. We are avid students of value investing and continue to
seek improvements to our investment process. |
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