The Investment Process

Investment philosophy 

Our investment philosophy is the result of years of work and experience, and we strive to improve it every day. The field of finance is constantly evolving; we must therefore remain humble, adapt quickly, and always have a critical mind.

We have developed a simple and very disciplined investment approach, which has been tested and has outperformed during the different market cycles in past years, while being less volatile.

Our philosophy and primary focus for our clients are capital preservation, while combining growth and income when needed.

Diversification and Risk Management are very important to us in order to reach our goals of exceeding our benchmarks with lower volatility. We aim to participate in market upside and minimize downside exposure.

We favor a contrarian approach in portfolio management and are very independent in our decisions. Our portfolios are unique, and their composition differs a lot from the indices and the assets held by the average manager.

The stocks we follow in each industry have been carefully selected. We aim to select high-quality stocks that should appreciate faster than their peers. They are leaders in their respective industry, holding long-term competitive advantages, healthy Free Cash Flow and exemplary governance.

Our investment style is anchored in two tenets:

• A rigorous top-down process, including an assessment of global fiscal & monetary conditions, projected economic growth and inflation, as well as the expected course of interest rates, major currencies, corporate profits, and stock prices.
• A bottom-up disciplined approach to equity selection, which relies on fundamental, and technical analysis to corroborate the outlook of a stock and to determine entry and exit levels.

We identify the macroeconomic themes that will, according to us, be significant in the near future. We then analyze how each stock we follow should behave according to the different scenarios, and we adjust quickly as needed. The way stocks behave relative to a theme change frequently, so we must always stay alert.

Stocks will either be stable or cyclical. Stable stocks won’t get affected much by the macro scenarios we identified. Cyclical stocks will either benefit from one macro scenario or not.

Here are our core principles in investing:

• Favor discretionary and active management. Timing has a big impact on performance therefore we must use it to our advantage.
• Invest directly in the equity markets, in companies that are easy to understand and have long-term competitive advantages.
• Be contrarian. Do not follow the common opinion.
• Diversify across all sectors to reduce risk.
• Keep things simple and avoid hidden fees and tax-inefficient products.
• Avoid trendy companies that have negative cash flow or trade at a level higher than 10 times sales.
• Never trade at market prices.
• Not hesitate to take profits or sell a position if needed. Never fall in love with a stock.
• Not hesitate to have cash when the market is expensive.
• Not be passive in fixed income and currency management.