Our investment philosophy is to buy quality growth companies at a reasonable valuation. This philosophy rests on 2 pillars, Growth and Risk
Margin of safety not only lies in the price, but also in the quality of business and management.
We strongly focus on sustainability & governance of the company.
Investing for acceleration in growth yet to be factored in by market, leads to superior returns.
We are primarily growth investors. We look growth into two baskets
Aims at capturing earnings growth & valuation re-rating
Aims at capturing stable earnings growth
No matter what your investing style is, forensic analysis can help avoid some of the pitfalls inherent in human misjudgment.
Our CLEAR framework is designed to deep dive/analyze the annual reports, financials, and numerous public documents of companies, which help improve our vision beyond the reported numbers that helps us reduce the probability of Type A risk in the portfolio.
In involves connecting information collected through channel checks (vendors, distributors etc), peer/industry circle feedback (competitors, experts, etc), factory visits, management/employee meets/ex-employee checks, quality of boards, stature/quality of auditors, gender diversity, CSR practices, Environmental policies/practices etc. Analysing cultural aspects of an organisation is also vital part of our research.
Value of an asset cannot, over the long term, grow faster than its earnings
Identify companies with reasonable valuations in relation to growth prospects
Pay a reasonable price, avoid overvalued companies
Risk is an essential part of our business. We have two fundamental beliefs about risk. First, we take risks only when the risk–reward is favourable. Second, risk can be managed provided one know the source of risk.
From this perspective, we classify risks into three categories
Risk of permanent loss of capital or Total loss risk: risk of losing ~70-100% of capital
Volatility Risk (MTM loss Risk): risk of an investment temporarily going below the investment price
It is risk of opportunity loss, meaning you should have invested into sector A stock A but invested in sector B or stock B thereby generating suboptimal returns.
