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Investment Philosophy
Inspired by the laws of the natural ecosystem of the Himalayas, our investment activities operate according to the unifying philosophy that follows:
Importance of Risk control
The force of nature ravages those who over utilize its resources, the same way financial markets react and penalize irrational exuberant risks takers. We pride ourselves to deliver superior performance in low-periods and also prove that high-period gains were earned through skill, not simply the acceptance of above average risk. Instead of merely searching for prospective risky profits, we place the highest priority on preventing losses.
Primacy of market inefficiency
The way the Himalayan glacier systems readjust themselves to temperature changes, so does the ecosystem of financial markets to relevant/non relevant information and price movements. These readjustments create a cycle of inefficiencies between them. We feel that skill and hard work can lead to a “knowledge advantage,” and thus to potentially superior investment results. Our clients hire us because of our superior knowledge advantage and rational application of hard work and effort leading to potentially superior investment results.
Negation of market timing
Financial markets also exhibit a similar pattern of hydrologic cycles. These cycles can be defined as business cycles, economic cycles, inflation cycles and interest rate cycles. Financial markets reflect the same analogy as the force of gravity, it’s the psychological gravity that keeps pulling back the markets from the top of a pinnacle to the bottom of a pit. We at Himavan leverage these phenomenons/ psychological forces and invest in these market conditions leading to exponential returns for our clients.
Value oriented investment approach
A dominant business is built with the same analogy of that of a river formation.
Using the same ideology we at Himavan scout for investment opportunities by identifying businesses which serve millions of people by solving complex problems around the world only due to their dominant nature. These businesses are profitable due multiple revenue streams and having a competitive advantage over their peers.
Margin of safety
Mountaineers emphasize on margin of safety while going out on their expedition. It is so critical that it can impact their life. Similarly, while investing in financial markets, margin of safety provides a cushion against errors in calculation of intrinsic value of businesses. With our research methodology we are able to provide consistent protection of their capital with superior returns in bad times. We utilise overall portfolio structuring as a defensive tool to help us mitigate dangerous outcomes, thereby delivering more value on what we do best.
Theory of Compounding
“He who understands it pays it, he who does not pays it”.
Rivers originating from the Himalaya’s are perennial in nature and it’s water contains all the vital elements necessary for survival of mankind. We at Himavan also believe in perennial returns over a lifespan of our investments compounding at a rate which is greater than the index and we work hard to get those elements and achieve them.