Financial criteria

We adhere to a consistent and meticulous investment process.

Financial analysis

We are long term investors; a great company always has an allocation in our portfolio because it constantly meets expectations.

Companies are worth what they generate, we focus on their cash generation.

We invest in quality companies that can maintain their competitive advantage.

We select business without financial burdens. The less debt, the better.

For us, a sound order book signals a healthy company.

We prioritize current facts rather than prospective figures.

Aggregate portfolio analysis

We analyse the correlation between each stock and the whole portfolio, considering variables such as economic cycle, interest rates, inflation and market risk. We thoughtfully diversify our portfolio to protect ourselves against unexpected situations and potential errors.

Risk aversion

We avoid the permanent capital loss, although we are not concerned about temporary volatility in market prices. Permanent capital loss typically occurs when buying overpriced stocks, businesses in a predicament or highly indebted companies. Therefore, we avoid such situations.

Margin of safety

Margin of safety occurs when the market price of a security is significantly below to our estimation of its intrinsic value. We invest in situations where the quoted price offers a wide margin of safety, because this provides a cushion against errors in analyst judgment or calculation, while at the same time, enables us to obtain a reasonable return with lower volatility than the market.

In the short term, the market has an emotional and impulsive behaviour, so price and value seldom come together. As times goes by, rationality appears, and price and value eventually converge. Those temporary discrepancies between value and price, resulting from the irrationality of the market, create great investment opportunities.