We would like to reiterate that we firmly believe in the strategy of investing in high quality business at the right price with a view of holding such stocks for long time (ideally forever).
We have differentiated ourselves from most of the existing funds and listed below are four ‘T’s which will help you understand why :
Never try to time the market. Once we find a high quality business available at a reasonable discount, we invest in it and most likely reinvest if the price goes down further.
It is impossible to time the market and buy anything at the bottom and we do not waste time trying to predict the bottom.
Similarly, we do not try to time the market when we decide to sell a stock.
The reason we buy a stock is because we believe in the long term sustainable growth of the company and with a view of holding it for at least 3 to 5 years, ideally forever.
In our three years of existence, we have done less than ten trades per year and have just sold 6 stock in the last three.
We do not believe in trading in and out of any stock and thus have a negligible transactional cost.
We also do not follow the stock price on a daily or even monthly basis. However, what we follow is all the portfolio companies and their competitors as well as industry news on a very closely.
Since we generally invest in a business when there is temporary ‘bad’ news, we are mostly in a situation that we are buying when the market is selling.
This contrarian approach requires us to build a deep and thorough understanding of the businesses rather than follow the general opinion in the market.