Investment Framework

We focus our investments in the following business:

 

  • The firm foundation of business makes the long-term sustainable growth of value, the future cash flow
  • The business that grows with the secular trend of the ecosystem of economic capital
  • Fundamentals, not speculative market behaviors, drives market price dynamics
  • Large to mid-cap companies in the developed market

AFIRI (Artificial Fundamental Investment Research Intelligence): BALANSTONE ZERO

 

  • A fundamental investment recommendation engine developed and built on the successful integration of DNN & ML algorithm and the insights from intensive fundamental equity research and value-oriented approach for long-term investment.
  • BALANSTONE ZERO discovers the companies with strong structure and value generation capability, resulting in a superior return on equity investment.
  • Tested and proved to work for all major public equity market.

(*) For the disclosure of backtested information, please refer to this page

Growth Capital

The companies that grow equity capital faster through organic growth than other businesses. The high rate of growth is driven by strong revenue growth and above average capital reinvestment. We exclude the companies with the strong influence from the swing of price and the market expectation when selecting a group of the businesses in this category. As a result, the companies tend to be in the group of above-average growers, but not in the fastest group of growth.

Persistent Value

Fundamentals growth shows a robust and sustainable trend, which has a longer duration and predictability because of a resilient business foundation. The length of investment horizon is a primary driver of underlying persistent value of the investment. Predictability and manageability of a velocity of the business dynamics characterize the business model.

Shareholder Return

The group of companies that achieves moderate capital gains. They have the business and financial model that utilize the invested capital very efficiently. Excess return provides steady and satisfactory cash flows and above average shareholder return consistently. Capital investment requirement is measurable and stable. The financial structure can be accommodative when any unfavorable events happen.

Low Price

The price of equity is low because of unfavorable expectation, while the business is not structurally in a decline in the long term or a pure cycle-driven leveraged business. This is not a regular investment chance but an opportunistic and tactical one. The herding bias overreacts to broadly and easily recognized negatives, which provides positively biased return opportunity, despite the required patience and volatility as an investment.

Equity Investment Process

Construction

Managed in Accordance with The Target Portfolio Risk Profile

Risks Balanced to Maximize The Expected Return From The Portfolio

Risk Model as a Rough Guide Not as a Measurement and Control Tool

Monitor The Source of Long-Term Return

Direction of The Management: Strategy and Tactics
Execution, Operating Results and Financial Management
Industry and Competitive Dynamics & Forces

 

Don`t copy text!