Our investment objective

KCML's  investment objective for all assets under management  is to achieve capital preservation and longer term capital appreciation by applying  the principles of "value investment", a system which has generated substantial capital appreciation over long periods for investors and fund managers who have practiced its disciplined approach to investment.

The origins of value investment

Most of today's value investors take the principles of their approach from Benjamin Graham, who practiced this style of investing from the 1930s on and communicated it widely through his class at Columbia university and through his seminal books " Security Analysis" and " The Intelligent Investor". Graham used to invest in companies which his analysis indicated had intrinsic value that appeared to have been overlooked or undervalued by the market.

Value investment today

While the returns of various value investors have varied from year to year, their overall record has been one of steady performance and limited experience of capital loss. Perhaps the best known such value investor today is Warren Buffett, whose conservative and business oriented application of value investment principles over the last four decades has created substantial wealth for many investors in Berkshire Hathaway, Inc.

Investors like Buffett and his partner Charlie Munger have now developed this strategy in a way that focuses on buying businesses with long-term sound economics and potentially high returns on capital, which have a defensible competitive advantage, and which have honest management teams that think and act like owners. In addition to Warren Buffett there are a number of seasoned value investors who have generated superior and consistent returns.

What we look for

Value investors typically invest in companies which for a variety of reasons are misunderstood or are out of favour.  If a company's difficulties prove to have been blown out of proportion or are temporary, the value investor stands to profit when the market in general adjusts its perception to the underlying realities. This means that value investors are often contrarian. Such an attitude also means that value investors typically avoid following the herd and sit out the many bubbles which inflict damage on the wealth of generations. As Warren Buffett put it, they try to be "greedy when others are fearful and fearful when others are greedy."

Value investment is about investing in companies for the long-term, focusing on the fundamental value of the underlying business. As these businesses grow and their value becomes fully understood by the market the value investor makes his returns.