Investment Strategy

Intelligent Investor Funds Management places no emphasis on predicting short-term price movements or the direction of markets. The focus is on valuing securities and attempting to buy them for substantially less than their underlying value. In theory, any financial security can be valued by adding up the value – in today’s dollars – of all the future cashflows the security is expected to provide to its owner.

In practice, all businesses operate in a dynamic, rapidly changing and potentially unstable environment. Their future cashflows can be impacted by a large number of factors both within and outside of management’s control. Competitive markets can be transformed overnight and once thriving businesses can disappear from the corporate landscape. This makes valuation an inexact science.

Our approach is to be patient, selective and only invest in opportunities where the gap between its estimate of value and the current security price is significant enough to compensate for the large degree of uncertainty inherent in valuing any security.

You will find many examples of this strategy being put into practice by working your way through the Quarterly Reports from the past few years.