FINDING THE FACTORS THAT REALLY MATTER FOR VALUE INVESTING
We believe in the principles of value investing
- Investing is buying a share of a real business (not just buying a piece of paper).
- Businesses have an intrinsic value which may be different from their temporary market value.
- Investing in a company might make sense when its market value is below its intrinsic value with a sufficient margin of safety.
Stock screeners are a good first step approach but not sufficient
- Stock market screeners following value investing principles are an efficient way to select a short list of investments.
- Investors using those screeners will pick the stocks from pools that have good « base rates ». This « base rate » increases the investor’s chances to perform well on the long run.
- Successfull investing requires « manual » further investigation of the short listed investments: go the extra mile !
Keep it simple !
We are not smart enough to apply fancy math or forecast the future
- The best investment strategies are simple.
- We are not smart enough to use fancy tools. Derivates are « weapons of mass destruction » and we do not understand them, hence do not use them.
- Let’s try to sleep well and avoid leverage. It’s not a hedge fund strategy.
- The future is unknown. We cannot forecast indexes, market prices nor the behavior of other investors. Rather, it is about regression to the mean....