Latest insights
INVESTMENT PHILOSOPHY
Concentration
Less is more. Avoiding over diversification with a portfolio of 15-20 great companies is optimal.
Conviction
Let winners compound to outperform. The longer the time horizon, the lower the probability of losing money. The average investor holds for 5.5 months.
“If you know how to analyse businesses and value businesses, it's crazy to own 50, 40 or 30 stocks.”
WARREN BUFFETT
Commitment
Best ideas outperform. Alpha generated from a first idea is greater than that from the tenth idea. Growth outperforms significantly. Illiquid best ideas outperform. No need to buy the Index. Buy the best.
“I don’t like even looking for exits. I’m looking for holds.”
CHARLIE MUNGER
INVESTMENT THESIS
Families Outperform
Family and Founder-owned businesses outperform, most prominently in Asia, among first and second generations. Families are excellent capital allocators, investing for the long term, while avoiding excessive leverage.
Brands Outperform
Strong brands outperform. Powerful assets are beacons of trust, and are resistant to inflation and disruption. National champions are being built while global brands are expanding their reach into new markets.
Governance Outperforms
Strong governance is a significant differentiator during times of drawdowns. Great companies which exceed regulatory requirements, win both the trust of consumers and investors.
INVESTMENT THEMES
Formalisation
A rapidly growing middle class – 1 billion people being added - is driving a huge structural shift from the informal to formal sector, creating economies of scale and value for money.
Nationalisation
Rising wealth is moving consumers up the value chain from unbranded to branded products, and from mass to premium products. Innovation and data are driving new brand offerings.
“A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital.”
Warren Buffett
Premiumisation
Government reforms are facilitating national expansion, accounting for localisation and regional tastes, expanding the addressable market for domestic companies.
“All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.”
Warren Buffett
INVESTMENT APPROACH
Index Independence
Breaks from traditional index-driven approach to focus on a companies true economic strengths. Avoids index over-diversification, index weighting pitfalls (such as TSMC 52% weight in MSCI Taiwan) and legacy index members.
Inclusive Ideas
Targets future Asian icons, inspired by their Western counterparts, adapted for the domestic consumer, and poised to dominate their markets.
Identifies Innovators
Includes Viet Nam's untapped potential, and avoids China’s governance risks. Adjusts for unrepresentative country weightings where India accounts for 2% of MSCI ACWI yet 4% of global GDP and 8% global PPP. Captures ASEAN champions such as Sea Limited and Grab, which are absent from relevant country indices.