Strategy and Philosophy
At Lingren Larsen Kapital, we consider the wealth entrusted to us with the utmost responsibility. To us, these are funds that our partners don't need immediately, but they absolutely cannot afford to lose. This principle forms the bedrock of our philosophy.
We deeply value simplicity. Our belief is anchored in the idea that true mastery is about distilling even the most intricate of disciplines into simple, understandable concepts. So, how do we navigate the intricate world of investing? It's simple. The daily turbulence of the economy and financial markets doesn't phase us. We remain singularly focused on companies offering good products capable of yielding stellar returns.
In today's fleeting world, our distinctiveness arises from our commitment to the long haul. Unlike most, we don't lose sleep over the daily, monthly, or even yearly fluctuations of a stock. Yes, in the short run, our performance might swing in either direction, but our conviction remains firm on the long-term trend. We believe that if we have a competitive edge, it's nurtured by the patience and trust of our investors. This patient perseverance is our secret recipe to outdo the market.
The realm of information is vast. That is why we only focus on the crux, the truly valuable intel. More information doesn't necessarily lead to better decisions. It's the caliber of that information that counts. Sifting through the noise, we distinguish fact from fable, ensuring that our decisions remain unswayed by baseless speculations. This insistence on rationality and grounding decisions in fact, more often than not, leads to favorable outcomes.
At our core, we're contrarians. While many seek comfort in the crowd, we find solace in solitude. Our most cherished investments are often discovered in the overlooked corners, among companies that, for one reason or another, are temporarily undervalued. We're no fans of the herd mentality. In the quest for sustained wealth generation, one cannot merely follow the masses.
UNLOCKING THE SECRETS
PHILOSOPHY UNVEILED
STEERING CLEAR OF DISASTER
AVOIDING TAKING ON ANY FORM OF DEBT
AVOIDING INVESTING IN INSTRUMENTS OTHER THAN STOCKS
AVOIDING INCURRING UNNECESSARY EXCESSIVE COSTS
Our strategy is laser-focused, yet elegantly simple:
TACTICS FOR TRIUMPH
WE SCOUT FOR STANDOUT BUSINESSES
EXERCISE DISCIPLINE TO ACQUIRE THEM AT A SENSIBLE PRICE
PLAY THE LONG GAME, HOLDING ONTO THESE GEMS HOPEFULLY FOREVER
Although the final two points are clear, what defines a standout company is not as obvious. To be considered a standout business and receive our investment, a company must successfully pass our comprehensive five-pronged test.
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They must operate in markets known for secular growth.
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Leadership that is not only honest but also owner-centric.
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A management that executes strategies aimed at creating long-term shareholder value.
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Solid financial health — impressive profit margins, stellar return on capital, and a robust, prudently managed balance sheet.
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A competitive edge, ensuring the company retains its exceptional performance and remains shielded from rivals far into the future.
Our investment portfolio is an embodiment of our confidence. We channel the majority of our funds into the ideas we truly believe in. No preset restrictions guide our investments. This approach will lead to a focused portfolio comprising, on average, 10-15 positions. Our intention is to distribute our capital equally across these selections, while retaining the discretion to let our investments run, and not cut them, if they grow into a significant size of our portfolio.
Geographical boundaries don't constrain us. We're on a relentless quest for value, and this journey takes us across continents. But, we're cultural chameleons. When assessing foreign companies, we don't superimpose our cultural norms. Instead, we strive to understand and appreciate local traditions and practices.
Yes, our strategy may seem volatile. But fluctuations in market prices don't faze us. We have a firm grasp of a company's value, which isn't swayed by transient market dynamics. We favor a roller-coaster ride with higher returns over a tame, predictable one. If a company's value dives below our intrinsic value estimate or even our purchase price, it's not panic stations for us. Instead, it's an opportunity to invest even more.