“We do not expect to pick the next Google as we find it extremely difficult to handle the large number of variables that can decide its future, including LUCK. We aim for superior investment analysis and the identification of opportunistic themes marked by underappreciated value in franchisee, brands, materials, scale and leadership.”
We believe skill and consistency can deliver the “Knowledge Edge” to generate superior returns. No market is perfectly efficient and some inefficiency is inevitable, much more pronounced in emerging markets. Low market capitalization leading to lack of interest by market participants like research analysts and investors which leads to market inefficiencies is one of the major market anomalies.
We do not rely on our predictive ability which is required to correctly time markets on a regular basis. Our philosophy is to stay fully invested whenever attractively priced opportunities are available. Concern about market timing may cause us to tilt towards more defensive investments, increase selectivity or act more deliberately in asset allocation. We maintain “Market Neutral Risk Profile”, as we believe situation-specific risk is better for clients than directional risk of markets. We focus on risk through a moderately concentrated portfolio.
We believe taking a “Longer Term View” will often involve taking a stance that is at odds with the market consensus. The belief is that the new information and company performance will come to light over a period of time which will validate our opinions and steer the consensus in our favour.