Moat Investing adheres to the principles of Value Investing, a renowned school of thought in the investment world. Our investment process is meticulously designed, encompassing the following steps while incorporating the rich history of value investing.
Research and Screening: Drawing on the wisdom of value investing pioneers such as Benjamin Graham and Warren Buffett, we conduct extensive research and screen the market to identify promising investment opportunities. By seeking companies with robust competitive advantages (Moats) and undervalued assets that have the potential for long-term growth, we follow in the footsteps of those who recognized the significance of a company’s intrinsic value
Fundamental Analysis: Once potential investment candidates are identified, Moat Investing performs detailed fundamental analysis. This includes assessing the company’s financial statements, evaluating its business model and competitive positioning, analysing industry trends and dynamics, and understanding the company’s growth prospects.
Moat Identification: We place a strong emphasis on identifying companies with durable competitive advantages. These moats can come in various forms, including strong brands, proprietary technology, economies of scale, or high barriers to entry. By investing in companies with robust moats, we aim to capture long-term value and shield our portfolios from competitive threats.
Intrinsic Value Calculation: Moat Investing estimates the intrinsic value of the identified investment opportunities. Various valuation methods, such as discounted cash flow (DCF) analysis, earning power value (EPV), valuation ratio comparisons, or other appropriate models, are used to determine the fair value of the assets.
Margin of Safety: Moat Investing emphasizes the importance of a margin of safety in their investment decisions. They seek to purchase assets at a significant discount to their estimated intrinsic value to provide a buffer against potential errors in the valuation process and market fluctuations.
Long-Term Investment Horizon: Moat Investing adopts a long-term investment horizon. They aim to hold investments for an extended period, allowing sufficient time for the market to recognize the underlying value and for the investment thesis to play out.
Risk Management: Moat Investing pays close attention to risk management. They conduct a comprehensive assessment of the risks associated with potential investments, including financial risks, industry risks, and company-specific risks. Risk mitigation strategies, such as diversification and ongoing monitoring, are employed to manage potential downside risks.
Portfolio Construction: Moat Investing constructs a diversified portfolio based on the identified investment opportunities. They carefully balance the allocation of investments across different sectors, industries, and market capitalizations to manage risk and optimize potential returns.
Ongoing Monitoring: Once invested, Moat Investing continuously monitors the portfolio holdings. They stay informed about changes in the underlying companies, industry dynamics, and market conditions. Regular performance evaluations and reassessments are conducted to ensure the investment thesis remains intact and to make adjustments if necessary.