Our long term investing approach focuses primarily on bottoms-up fundamental analysis with a contrarian tilt. We believe in tactical strategies directed towards taking advantage of market mispricing that lead to value opportunities. Asset prices reflect expectations for future risks and financial performance. Our task and objective is to anticipate revisions in those expectations, and to understand the components that are “priced in”.
Our investment process focuses primarily in:
Fundamental analysis
Corporate value drivers
Industry analysis
The economics of strategic behavior
Company analysis and sources of competitive advantage
Credit analysis and company valuation
Identification of mispriced expectations
Macro analysis
Macro analysis
Global and local monetary policy
Economic fundamentals (GDP growth, credit and business cycles, FX, interest rates, inflation, energy prices, productivity, trade and current account balances, etc.)
Behavioral analysis
We try to identify the psychological flaws and behavioral weaknesses inherent in the investment process that could be a largely self-imposed handicap when it comes to making an investment decision.
“Plumbing”
We are monitoring inherent technical factors that might affect the value of an asset. Financial markets are complex systems in which one has to analyze the interconnected relationships between the actors in the systems. We refer to “Plumbing” to describe “what is going on underneath the lid” in these complex systems.