“It’s share of mind that counts.”
Warren Buffett
Strategy
My investment strategy centers on uncovering unique, overlooked opportunities that lie beyond the mainstream radar. I seek out companies in unconventional spaces—long-term compounding machines that others tend to miss. These businesses boast high returns on equity without reliance on leverage, possess durable competitive moats, and offer a significant margin of safety. I prioritize simple, understandable, and predictable operations led by talented management, with a long runway for growth and an anti-fragile nature to weather uncertainty. I also favor companies anchored in product categories that evolve slowly—think railroads over fleeting tech trends—where stability enhances durability. Guided by the timeless principles of value investing, I approach each stock as part-ownership of a real business, leveraging Mr. Market’s fluctuations to my advantage, staying within my circle of competence, and seeking asymmetric opportunities—those rare bets with limited downside and substantial upside potential.
“The art of investment is the discipline of inaction in the absence of a good opportunity, but aggressive action when one is identified.”
Li Lu
7 Commandments
- High Returns on Equity Without Leverage
- MOAT
- Margin of Safety
- Talented Management
- Simple, Understandable, and Predictable
- Long Run Way
- Anti-Fragile
“There’s no secret to wealth—live simply, save your money, and invest wisely.”
hetty Green
Six Basic Principles of Value Investing
- Ownership Over Trading: Remember, when you buy a stock, you’re not just acquiring a tradable asset; you’re buying into part-ownership of an actual business.
- Mr. Market as a Servant: Treat Mr. Market, the allegorical figure representing market fluctuations, as a servant rather than a master. His daily offers should be taken advantage of only when they serve your long-term investment strategy.
- Margin of Safety: Always invest in businesses at prices well below their intrinsic value to provide a buffer against errors in judgment or unforeseen adverse events.
- Circle of Competence: Stick to what you understand. Define your ‘circle of competence’ and invest only within that circle where you can make the most informed decisions.
- Focus on Opportunities: Like a fisherman choosing the best waters, invest where the opportunities are most promising. Look for undervalued companies with strong fundamentals.
- Wealth Preservation and Growth: The ultimate aim of value investing is to increase your purchasing power over time. This involves investing in companies that are likely to thrive in robust economic environments, thereby preserving and growing your wealth through ownership of dynamic businesses in vibrant economies.
“Selling your winners and holding your losers is like cutting the flowers and watering the weeds.”
Peter Lynch