“Investing isn’t about beating others at their game. It's about controlling yourself at your own game.” – Benjamin Graham
Freebird Capital is a private asset management organization that specializes primarily in corporate investments.
If you want to become a successful investor, you should first know what the basic strategies of investing are and how they are characterized. In this respect, we have taken up the value projection and derived an individual strategy from it.
The primary objective of our dividend growth and income strategy is to build a diversified portfolio of equities guided by a long-term, intrinsic value approach. We focus on a predictable stream of income by attractive, consistent and growing dividends. The game aims at price and value and the secret sauce is to find companies with above-average value growth potential and secure and growing dividends. Moreover, it is also important to make sure that we invest in a great business only when valuation is attractive and a margin of safety is given.
In summary, the crux of the matter consists of the following factors:
Benjamin Graham and Warren Buffett taught us to buy stocks at a significant discount to intrinsic value. Intrinsic value is mostly defined as the net present value of all future cashflows to shareholders. "The investor simply focus on two variables: Price and Value" said Benjamin Graham. If you want to become a sucessful individual investor, you have to understand the principle of intrinsic value.
The Margin of Safety is used to hedge against mistakes in assessment or unforeseeable developments in value investing. It describes the difference between the purchase price and the actual value of the company. If the price is below the current value, the investor has a certain safety buffer. Warren Buffett discribes the margin of safety as the most important words in investing: "The 3 most important words in investing are Margin of Safety". For this purpose, a fundamental stock analysis is prepared. In the following we will take a closer look at our individual process steps.
For an intelligent guess about the future of a business it is necessary to understand how a company generates sales, incurs expenses and produces profits. That's why we examine wether the underlying business model is simple, understandable and stands out from the crowd. And of course, we also include important fundamental key figures and macro-economic trends in our considerations.
Because of a targeted safety margin and a balanced combination of growth an income charackteristics, our investment process usually results in a less volatil overall portfilio. From our point of view, long-term success results from the consistent application of four stages you can find below. The progress begins with generating of ideas in the first step is screening:
The investment process entails a number of guidelines and decisions. The trick is to regulate our behaviour in such a way that we remain true to the principles of our investment philosophy. The portfolio manager must have the emotional strength to maintain the course even in phases of underperformance or self-doubt. It is precisely this process that gives us a better chance of making consistently good decisions over a market cycle.
Finally, the investment process consists of a series of inputs aimed to achieving an output, a satisfactory return on investment.