Investment Principles
Our investment principles are mostly derived from value investing.
Partial ownership in businesses
We view stocks as partial ownership in businesses, instead of tickers that fluctuate up and down. We conduct bottom-up business analysis. We monitor cash flows generated by assets rather than stock prices.
Attitude towards stock market volatility
We welcome stock market volatility, and treat it as a friend instead of an enemy. The fluctuation in the stock price gives us opportunities to buy some of the world’s greatest companies at a discount.
The margin of safety
We only invest when the price falls below our intrinsic value estimate. We look for a considerable margin of safety between the intrinsic value and the stock price. We also look for margin of safety in business metrics.
Long-term orientation
We view ourselves as the owners of the businesses we invest in. With that mindset, we invest accordingly for the long term.
Concentrated portfolio
Our portfolio is concentrated on our best and smartest ideas, and we understand that our top five ideas will likely be better than our 15th. We put our eggs in few baskets, but we watch them very carefully.
Contrarian
We use a shopper mindset when investing. We like to invest when stocks are on sale following a decline in individual stock’s price or fall in broader market. We're patient when broader investor sentiment is euphoric.