The goal of every enterprising investor is to achieve attractive absolute returns and to outperform a passive index approach over time. The best way to achieve that is to focus on the least efficient segments of the stock universe. As Seth Klarman wrote in Margin of Safety, “ample investment opportunities may exist in the securities that are excluded from consideration by most institutional investors. Picking through the crumbs left by the investment elephants can be rewarding.” In other words, we should fish where others are not.

That is the basis of how we manage money. We spend our time looking at the most ignored segments of the market - companies with small market capitalizations, spin offs, misunderstood mid and large caps, stocks trading under $5 per share, and unlisted companies. We then look for cash flow generators, since we believe that free cash flow is essentially what the investor is buying.