Our proven approach is implemented through disciplined and rigorous selection and valuation processes focusing on our nine key investment criteria that a company should exhibit before being considered for investment.

We believe that a company’s share market price is rarely an accurate reflection of its value to Growth Equities. Although the terms ‘price’ and ‘value’ are often used interchangeably, they do not have the same meaning when used in the context of investing. The market, whether it is the whole Australian Securities Exchange or the market for a particular company’s shares, is purely a mechanism to facilitate transactions. A share’s price does not necessarily equate to its worth to us as an investor.

We believe that a well managed company that has superior business economics will deliver above average investment returns to its shareholders. The vagaries of the market mean that these company’s shares may be purchased at ‘prices’ well below their ‘assessed value’. In the long term, the superior qualities of the business are expected to be recognised by the market, causing its share price to be pushed higher.

This process delivers two sources of return generation; return on shareholder’s funds generated by the company and the increase in the market price generated by its share market.

To capture both sources of return, we buy businesses that are excellent in all respects when their share price is well below its value to us.

Our methodology focuses on the following principles:

Capital preservation		We assess the potential profit as well as the potential loss of an investment and ensure the balance of probabilities is strongly in favour of profit.
Disciplined		Each investment must pass through our rigorous selection and valuation processes by achieving minimum levels of specific financial ratios. In addition, we apply a strict risk management checklist as a further check.
Avoid Fads		We are not ‘fad’ investors or influenced by the 'crowd'. We do not change our investment approach or processes to suit any particular market. Our approach is based on proven and enduring rational business facts.
Selective		We only invest in companies that at least achieve our selection and valuation criteria as those that do not meet these criteria are less likely to perform as well. We only want the very best.
Understand the business		By understanding the operations of our target investments we may more accurately assess the risks and opportunities available to it and us.
Stick to what you know		We avoid commodity based companies because we cannot forecast commodity prices with any degree of comfort and therefore, we cannot value these companies accurately. Our investment methodology requires that we assess accurate intrinsic values.
Patience		We cannot expect the market to recognise a company’s value as soon as we have purchased it, this sometimes takes years. But we are content waiting for this re-rating as we expect it will bring substantial returns because we believe we have purchased a superior business. Likewise, we are content holding cash until we can find an investment that meets our criteria. The returns from superior businesses purchased cheaply are worth the wait.
Stay fully invested		You need to be invested to receive returns. We take advantage of opportunities as they arise, but remember to be selective. We are content holding cash until we can find an investment that meets our criteria. The returns from superior businesses purchased cheaply are worth the wait.

We believe this investment methodology is the only way to consistently achieve above average investment returns.