We follow a value oriented investment approach:
- We distinguish between value and price ("Price is what you pay and value is what you get" - Warren Buffett). The value approach inherently rejects market efficiency which assumes that price equals value.
- We buy with a margin of safety by selecting the most undervalued companies.
- We accept Value Investing as a relative as well as an absolute concept.
- We focus on facts instead of estimates.
- We focusing on free cash flows.
- We define risk by permanent loss of capital; we evaluate the degree of business and balance sheet risk.
Throughout the investment process we assess companies' fundamental information, competitive positions, and their business models. We look for fundamentally sound companies which also offer a relative valuation discount.
"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."
- Benjamin Graham -
For genuine pearls one has to dive deep. Our bottom-up investment is named "CHICCO" (Cash In - Cash Out) and starts with approx. 18,000 companies worldwide which we systematically filter and compare. This is elaborate but well worth it in the end. During this process - and this is where we differ most from other investment managers - we continuously raise the question:
"Would I buy the whole company at this price?"
- Lingohr & Partner -