We like to buy beach balls being underwater with water levels rising.
Protect capital against:
Grow capital by:
In order to protect capital, you need to invest, equities gives higher rates of return
Measure ourselves over a period of time that's appropriate, we feel real way to measure yourself is over a very long time period important one and we believe from one market peak to another market peak.
Investment Strategy: Desired Investment Attributes
a. Business with high ROTAs( returns on tangible assets) b. Example consumer staples, low price used on regular basis. They have edge because they can manage capital much efficiently. c. High market share and keeping the capital working you can make lots of money. d. Eg: John Deere tractor business 17 years life cycle whereas toothpaste lasts only a month. So consumers companies handle well.
Investment process of management of the company, when you buy equity, some part you get as dividend and other retained by management for reinvestment that's the wildcard. For long term second part is more important as it gives you more return. Management has 5 basic options on how to use the retained money,
Low Purchase Price