Our investment strategy can be best described as long-only with a focus on what has traditionally been considered value investing. We use quantitative and qualitative analysis to identify public securities that are available for a price that we think does not reflect their intrinsic value.
In our analysis, we focus on three core questions to answer before we invest in a business.
Does the business generate profitable growth?
We want to see that the business is profitable. And that it clearly indicates a runway for growth ahead, such that it will not decay over time. Unprofitable companies have too much risk in them and companies without growth will not yield good returns in the long run.
Can we trust the people who run the company?
We want to verify that the leadership team of the company has skin in the game or that incentives ensure that their interest is aligned with ours. We do not want CEOs to ruin a company with stupid decisions only to increase their short term bonuses.
Will the business survive in bad times?
A wise man once that "only when the tide goes out, we will see who was swimming naked". We want to make sure that we got our pants on and can weather a storm. From our perspective market downturns should be opportunities to buy more and not moments of being afraid that the businesses we own might burst and lead to permanent loss of capital.
Why do we not just invest into the next big thing? Why do we care about fundamentals?
We will certainly miss out on all the hypes, but research has shown that over the long run, it is more important to avoid losers than to have the biggest winners.
We think it may be a suitable investment style to guess where public attention will move next, but we do not see ourselves capable to do so.
What we can do however, is to understand a business and guess their growth prospects with a margin for error that is good enough for us.
That is why this approach is more appealing for us. And after all, we want to sleep well with our holdings.
We do currently not take in capital from the outside.
If you are still interested, get in contact
and we will get back to you when we take in capital again.
