This blog is really the result of Whopper Investments post about merits of writing a blog to improve investing skills and accelerate learning. I am a value investor focused on investing in companies with a sustainable competitive advantage at fair / low prices. I have learnt enough about myself to know that I am not that good at sticking with distressed investments/ net-net investments. I prefer to buy really good companies at fair prices and then have the patience to hold for long periods of time.
I have tended to identify companies in a formulaic manner. While my performance so far has been average, I feel the strong need need to move to a more concentrated portfolio with higher amount invested per position and fewer positions. I'd like to have conviction to put at least 20% of my portfolio into a single idea. My present approach involves identifying businesses with long term competitive advantage through financials. It does not identify the specific advantage and whether the next 10 years will look like the past 10 year. Without this knowledge I am forced to diversify. As I look back at my past investments, a few ideas have generated substantially higher returns - not an uncommon occurrence. If I can get closer to understanding the business better, I can increase amount invested per position and improve returns in the process. The outcome should be higher returns with lower risk - Risk being defined as not know what I am doing.