Goal is to construct reasonably diversified (approximately 20 stocks), long term oriented portfolio adhering to the value investing philosophy. Value investing has come to have a broad meaning in today’s investment vocabulary. We subscribe to the idea that margin of safety remains a central tenet. Margin of safety is the idea that our estimates of company’s future financial performance must be significantly less demanding to justify today’s price. As Benjamin Graham has said “The function of margin of safety is, in essence, that of rendering unnecessary an accurate rendering of the future.”

The criterion for buying a stock

(1) Understandable business

(2) Competent and honest management/promoters

(3) Company with sustainable competitive advantage (preferred but not compulsory)

(4) Price which provides a margin of safety

The criterion for selling a stock

(1) Initial thesis is not playing out in business performance

(2) Other stock is providing a superior risk adjusted return opportunity

(3) The stock is significantly overvalued against our estimates of intrinsic value