The Fund's philosophy is based on two concepts:
- we believe an entity's underlying value (intrinsic value) can, with thorough analysis be estimated; and
- in our experience, security prices fluctuate far more than the underlying values of the businesses they represent in the short to medium term.
Consequently, we consider that securities in entities can, at certain points in time be purchased at a discount to their intrinsic value due to a number of factors. These factors may include macro market issues generally, management changes, country specific issues, market's view that the business model is broken (at least in the short-term), lack of sell-side research due to size or free float and more generally, short-term negative investor sentiment.
We believe that holding a portfolio of securities in entities trading below their estimated intrinsic value provides investors with the best opportunities for superior positive long-term returns.