I invest (technically) part-time, but I love the markets and immerse myself in them daily. I enjoy writing about my investment ideas as it helps me to organize my thoughts and I am happy to share if it helps others. I invite criticism as it will help sharpen my ideas, so please tell me where, in your opinion, I am going wrong.
I operate a small hedge fund for family members and friends. The portfolio is valued oriented, un-levered, and has concentrated long positions. The fund has no management fee. And charge a 20% fee on returns above 6% (Hurdle Rate). I write investor letters every half year.
I'm a financial auditor that holds a BA in accounting and a MBA. I'm interested in where value can be realized. This could be a small or large cap company selling at favorable EV/EBIT or a special situation/event driven investments. Warren Buffet once said, "You have to turn over a lot of rocks to find those little anomalies" and I hope to do just that.
10 years of buy-side investment experience.
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My work consists in procuring investment situations for clients where the estimated monetary value of a quoted financial security is significantly higher than its market cost; thus establishing a margin of safety in investments that allows for market outperformance and a lower risk profile in the long term. During this time I have successfully identified and invested in inefficiently priced financial securities that with few exceptions have outperformed global equity markets.
My experience is further divided into two types of investments:
1.) General Equity Investments: Investments in companies whose true value is unrecognised by equity markets.
+Asset Value. Shares of companies selling for much less than their net asset value, liquidation value or those that have substantial hidden assets.
+Earnings Power Value. Shares of companies selling for much less than their cost of capital times their earnings, normalised earnings or their earnings potential.
+Great businesses at great prices. Shares of companies with excellent ROIC levels and competitive advantages selling for a price unreflective of such characteristics.
2.) Special Situations: Financial opportunities characterised by an unlocking of value via a complicated or uncommon financial structure that tend to be disregarded by market participants.
To realise the aforementioned investments, I read a great number of financial documents, reports and news articles daily and analyse and model my findings. While doing so my strategic framing and approach is two-fold:
+ Defensive Strategy: Monitoring and analysing the composition of the client’s securities portfolio and acting accordingly when the estimated value of a financial security changes.
+ Offensive Strategy: Exploring the global marketplace in search for investment opportunities, analysing them quantitatively and qualitatively and comparing them to the client’s opportunity cost (i.e. cash, current portfolio positions or other potential investments).