We focus on opportunities among consumer-driven growth companies that will make us proud in the next 10 years or longer. Our contrarian approach drives us to invest our capital in companies that the stock market hates at the moment. Our investment process consists of the following three steps.
I. Find a great company
This is the most crucial part of making a successful investment. Using our Q.B.P. consumer model, we identify companies that best deliver what consumers want from its products or services. We expect these companies to grow both revenue and profit substantially in the next 10 years with limited competitive risk .
II. Price the company
Our focus on valuation is to find the company's minimum value even in the worst case scenario. This conservative pricing approach minimizes the chance of getting a deal at unattractive cost and maximizes return on investment.
III. Buy as the company gets cheaper
As a contrarian investor, we invest when the stock market hates the stock for the wrong reasons, thus deeply discounted. Like fishing, we place buy orders (lure) in advance at or below the conservatively calculated minimum value. We typically catch a lot of fish in situations when the backward looking, myopic stock market becomes highly irrational, misses the big picture and sell off shares of the great company to us.