Investment Philosophy

Our Investment Philosophy

From our point of view, an investor can only be successful if he has developed an investment style that is coherent with his personal interests and his psychological constitution.

We believe it does not work to mimic specific techniques or copy select investors. But, we can say – after deep study and much trial-and-error – that we feel closest to Warren Buffett and Charlie Munger.

Our principal duty is to identify a) the intrinsic value of a company or more generally speaking of an asset and b) a discrepancy of this value compared to the current market price. As a general approach, we will develop different future state scenarios for the company and assign probabilities / likelihoods. We will then aggregate this into an expected value for the company. The difference of the current market price to our expected value is our Margin of Safety. The market should correct the mispricing in the long run and therefore generate a handsome return for us as investors. The Margin of Safety should also protect us from unforeseen negative evolutions or any mistakes in our initial assessment.

We will pay special attention to situations where the market price reflects all negative scenarios for the company but neglects potential positive evolutions. If we identify these situations, we might well invest a significant share of our portfolio. These investments have a strong upside potential with limited downside risk.

We believe that companies can – at least temporarily – be mispriced. We therefore prefer to invest in a very focused way, i.e. in a small number of companies… our best ideas. We will monitor these companies very closely and continuously challenge our investment case. We will typically invest in 10-20 companies at a time and we do not actively seek a diversification across sectors. This has two main reasons: Firstly, we would not be able to cover more companies as closely as we want. Secondly, we do not want to invest our limited resources in our 21st best idea. We want to invest heavily in our best idea.

We have one objective: long-term wealth creation. Investors with a short- to mid-term horizon or a wealth protection mindset would certainly apply a different investment strategy.