We believe that superior long-term investment outcomes are achieved through the consistent application of a value-based investment philosophy. Investing is a very difficult art that requires a sensible, well-considered process-driven framework within which to make decisions. Our framework encompasses scope for; emotional intelligence, patience and discipline.
Four core beliefs underpin our Investment Approach:
- Risk/Reward: Focus on risk as much as return
Generating consistent returns is important but capital preservation is an equally critical focus.
- Purchasing Power: Over the long-term it is better to own quality businesses than cash
In the short-term, cash can provide a shelter from over-heated share markets and optionality to take advantage of any downturns. However, over the long-term, cash is almost guaranteed to lose value through inflation.
- Return Objective: Absolute return rather than relative return
Index investors accept relative returns which are the average return of the share market. If the share market declined by 20% and we declined by 19%, unlike an relative return ‘investor’, we would not pat ourselves on the back. Our investors recognise that they can only live off absolute returns, not relative returns.
- Investment Approach: Bottom-up analysis rather than top-down analysis
While we have an eye to where we are in the broader economic cycle, we focus predominantly on individual businesses as opposed to trying to time the outcomes of data points such as; currency movements, interest rates or commodity prices.