Investment Objective & Strategies

Objective:

To generate superior returns through capital gains & recurring dividend cash flow by investing in the equity of growth companies with superior business models, management, predictable cash flows and based primarily in Asia.

Strategies:

BRKets attempts to achieve the investment objectives by investing primarily in selected Equity securities through a bottom-up thoroughly researched selection process. The BRKets Investment philosophy is highlighted by the following characteristics.

• Invest in companies that possess Durable Competitive Advantages (DCA). The stronger the DCA factor, the higher is the predictability of cash flow & earnings power of the business.
    
• Invest in companies with Superior Business Models (SBM).This follows Mr Buffett's advise that "it is far better to own a Great business at a fair price than to own a FAIR business at a great price". The difference between GREAT & FAIR businesses allows for investors to buy businesses at even slightly higher prices to intrinsic values instead of scraping the barrel for bargains and yet delivers superior returns over the longer term.
    
• Competent management with nonnegotiable integrity that runs the business with a focus on return in equity. This singular focus is the key to a financially well run company.
    
• Companies must not be excessively leveraged. The guiding factor is that debt should not be more than 1 year's earnings. This maximizes the chances of companies not going bankrupt in their attempt to expand their business.
    
• Management aligns its interests with shareholders, by having significant stakes in the business. Management must also manage the excess cash flow of the business to maximize returns on equity. This can be achieved by returning excess funds to shareholders either by buying back stock of the company where shares are trading below intrinsic value or by paying high levels of dividends.
    
• We are keen followers of Mr. Munger's advice to use multiple mental models in life - either to analyze businesses or to approach life. Thus we appreciate the differences in business models rather than approaching investing with the philosophy that "To a man armed with a Hammer, every problem looks like a nail.' We are keen to meet management and understand their business models rather than blindly follow some specific method to arrive at intrinsic values.
    
• Finally BRKets follows the self named SOYA (Sit On Your Ass) style of investing which requires one to invest for the long term in outstanding businesses and hence benefit from cumulative returns generated by businesses that have a superior business model and run by competent management. We are more than happy to align our interests over the longer term with competent management of outstanding businesses than to trade in & out of stocks. We would rather 'marry' a few companies than, as Warren Buffett once remarked, behave like 'oversexed guys in a harem'.