Investment Philosophy

“What the ancients called a clever fighter is one who wins his battles by making no mistakes. Hence his victories bring him neither reputation for wisdom or credit for courage.”

Sun Tzu, The Art of War, 5th Century BC

Capital preservation

Our investment philosophy recognises the need for a balance between wealth creation and wealth preservation. A key tenet of our philosophy is the principle of avoiding or minimising mistakes in order to maximise returns. The best way to do this is to buy quality companies, with an easily understood business model, at a discount to their intrinsic value. This approach underpins our stock selection and portfolio construction process. This minimising of mistakes is consistent with our belief that we are the Stewards of the money our investors entrust to us. In our view, investment risk is investing in companies that you don’t understand.

Successful investing requires a balance between art and science

The quote at the top of the page is instructive in that we believe success in investing depends on strategy and tactics; minimising or avoiding mistakes, flexibility, commitment to action, nimbleness, intuitiveness and expertise. Prime Value has exhibited these characteristics consistently since 1998.

High conviction investment

It is our view that markets are inefficient and therefore provide opportunities for active investors. We can be considered a high conviction, benchmark unaware manager.

When evaluating investment opportunities, we focus on quality companies priced at below their intrinsic value. As well as traditional fundamental analysis we seek to identify the long-term macroeconomic, market and industry based themes at play both domestically and globally.

As a style neutral manager and all-cap investor, we look at opportunities to invest across the ASX Universe. We don’t rely on “value” or “growth” labels in selecting companies to invest in. We seek to identify investment opportunities based on a combination of fundamental stock research and our top down macroeconomic and thematic framework.

Alignment of interests

As a measure of our confidence in the success of our investment strategies, we back our decisions with our own investments and share the risks and rewards along with our investors. ‘Building Wealth Together’ is more than simply a slogan; it is a statement of our personal commitment and confidence, which has helped to drive our past and continuing success.