How we invest your money.
We base our investment decisions on the goals we set for our investors – never lose capital, beat the risk free rate of return, and beat the equity index rate of return, in that order of priority. The first goal, of not losing money, leads to the discipline that is the cornerstone of our investing philosophy.
As value investors, and followers of Benjamin Graham and Warren Buffett, the principles guiding our choice of investments are very simple – buy high quality companies at great prices. What is a high quality company and what is the right price to pay for it?
Read moreBuying the business.
Let’s assume that your friend asked you to invest in his business, and that the business was not listed on the stock exchange. In the absence of a share price to guide you on the worth of the business, how would you judge whether it make financial sense to invest?
You would probably base your decision on the financial health of the business, it’s future prospects, and your trust in your friend’s competence and honesty to ensure that your investment remained safe and healthy.
Why should investing in a company listed on the stock market be any different?
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The myth of taking high risks to yield a high return
A commonly held belief is that risk and rewards go hand in hand. The higher the risk you take with your investments, the higher would be your reward.
We beg to differ. In our experience, the companies that have returned the highest yields over a long period of time are those that have carried low risks.
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