HOW IS OUR PROCESS DIFFERENT ?
- NO MACRO OVERLAY - Purely stock specific
- NO PREDETERMINED IDEA OF COUNTRY / SECTOR VIEW OR WEIGHTING - Purely defined by our investment process
- WE RELY ON CONSENSUS DATA - Not our own valuations. This way we are never standing against the market
- NEVER LOOKING FOR INVESTMENT IDEAS - Purely decided by our unique proprietary valuation system
- UNIQUE PROPRIETARY VALUATION SYSTEM - This is NOT a function of prioritizing the importance of specific data. i.e. It does not place more importance on EPS growth than it does on say PE ratio. Nor is it a function of lining up a list of financial ratios and ticking a box if the stock meets that criteria and obtains a score of say 9 out of 12 at the end. Instead we have constructed a mathematical formula which encompasses various financial ratios / data to blend them together into a meaningful ratio.
- LONG POSITIONS ARE NOT HEDGED BY SHORT POSITIONS - each are run as separate books, both designed to produce Alpha
- PURE EQUITY INVESTMENT - No Futures, ETF’s or any other kind of derivatives are used for hedging purposes. However, we do use Zero strike SWAPS for shorting the underlying equity in some markets as is common practice
- WE HAVE 2 STOP LOSS CONTROLS - we use an absolute stop loss of 15%. We also use a 15% High Watermark Stop loss which is designed to preserve capital
- POSITIONS INITIATED WITH A MEANINGFUL WEIGHT - Each position is initiated at 3.5% weight of the fund. It is then left to run its course. The only time we would trim a Long position is if it was more than 4.50% weight and had less than 20% upside to our price target. In this case it would be cut back to 3.50% weight. For a Short, we would only ever add to a position if it fell to less than 2.50% weight due to its price action and there was more than 20% downside to our price target. Here we would bring it back up to a 3.50% weight
- NO AVERAGING DOWN OF OUR COST PRICE - If a position is going against us, even though our process still says that the trade is good, we do not buy or sell more to make our cost price more attractive. The position would be run until it is stopped out by either the 15% absolute stop loss or by its 15% High Watermark stop loss providing it still meets our investment criteria.