Execution Framework
Challenge Assumptions
Start by asking:
How could this be the dumbest investment at this time and at this price?
Bottom-Up Stock Picking
Rigorous bottom-up stock picking. No rigid sector or theme-based allocations. No model portfolios. Each investment is a unique opportunity.
Seek Mispriced Businesses
Seek misunderstood businesses that are mispriced by the broader market. Typically smaller in size.
Customer Compulsion
Why do customers find these businesses compelling?
Why will they continue to?
Competitive Advantage
How has the competitive landscape evolved over time? Why can’t competition eat their lunch?
Cash Flow Focus
Cash flows over reported profits. Always. We prioritize strong, consistent cash generation as a true measure of a company’s health.
Conservative Approach
We are conservative by nature, operating with a high margin of safety. What am I getting for free at this price? Why can’t I lose my capital in this
Investment?
Portfolio Construction
Portfolio construction comprising hugely mispriced bets across industries without any pre-determined allocation to sectors.
Management Assessment
Past behaviour is a good measure of likely future behaviour. Assess them for ability, integrity, and energy.
No Past Baggage
We aim to carry no past baggage. Markets, businesses, margins, and valuations are generally cyclical (revert to mean), demanding fresh evaluation at every point.
Patience is Key
Investing, essentially, is a waiting game. Waiting before buying. Waiting after buying. All magic is due to compounding. All compounding needs
time.