Our Investment Process

Buy Criteria:

•Identify candidate companies whose earnings appear mispriced, and therefore undervalued.

•Apply fundamental research: company has the potential to improve financial outlook.

•Apply quantitative assessment: verify relative and absolute valuation anomalies.

•Apply qualitative overlay: company has the potential for improvied market perception and appreciation.

Sell Criteria:

•Upside achieved – narrowing of identified valuation gap.

•Deterioration in company’s fundamental and financial outlook.

•Deterioration in macroeconomic, geopolitical conditions.

Portfolio Characteristics:

• 20-30 stock portfolio.

• Individual position varies from 2 – 10%.

• Sector weights vary from 0.5x to 2x compared to the S&P500.

• Cash reserve ranges from 0 – 10%.

Top-down approach: Select sectors of the economy that is most appropriate for the near-term economic outlook.

Bottom-up approach: Within each sector, select companies with strong business fundamentals, high competitive moats, reputable management.

Quantitative approach: To optimize the weighting of each stock in the portfolio, we use an advanced mathematical modeling tool called Monte Carlo Simulation. Here's how we applied this model to optimize individual stock weighting.