We believe in making returns for our investors by investing in good quality companies and staying with them for a long period of time. Our investment philosophy has four legs to it. External Opportunity, Business, Management and Valuations.
During stress, we give time to our investments to bounce back and only exit if our thesis goes bad. Example of such behavior can be seen from our portfolio companies.
“The big money is not in the buying and selling, but in the waiting.” – Charlie Munger.
- External Opportunity: We like to own companies which have a huge room to grow i.e. they are a very small player in the industry but they are the best in their business and have shown promise to become very large.
- Business: We like to own companies which have created huge fences around their business and the same is demonstrated in numbers. These companies are consistently able to generate ROCE>COC
- Management: We want our businesses to be run by ethical and honest management who have ears on the ground and is nimble. Management, especially in India has a huge impact on how capital is deployed in the business and that is what decides the fate of the company in the long run.
- Valuation : We continue to look for stocks available at a cheap or a reasonable price but not at the cost of quality. Quality of business and management precedes valuations. “Its better to buy a good company at a reasonable price than to but a bad company at a cheap price” - Buffett