How we turn conviction into controlled exposure.
An approach that reads the cycle before it picks a stock, and a process that turns an idea into a position only once it has earned its place.
Top-down context. Bottom-up rigour.
Cycle-level view tells us where to look. Company-level research tells us what to own. One without the other is guesswork.
We buy in before the market is fully paying for the growth we expect. That gap is our margin of safety.
- Getting the macro call and the stock right, together, is where most of our excess return comes from — either alone leaves return on the table.
- Liquidity matters to us because it is what lets us exit a mistake before it compounds. It shapes both how we size a position and how we manage risk.
- We never borrow to size up a single stock position. Every position stands on its own, without leverage.
Three things have to clear.
Growth, price and corporate governance. A business can be excellent and still fail one of them, and one failure is enough.
Growth
Is there real headroom in the industry, and is the business funding its own growth out of margins and cash rather than from outside?
Price
Are we paying before the market is, or after? A good business at the wrong price is a bad position.
Corporate governance
Capital allocation, related-party behaviour and disclosure quality. This is a gate, not a consideration.
Five stages, and each one can stop an idea.
Nothing skips a stage. An idea that fails at four does not get to five because we like it.
Where are we in the cycle, and which sectors stand to benefit?
Is this durable, or is it cyclical noise?
Is there a durable edge, and will it still be there in ten years?
What return can this generate from here?
How much do we own, and how do we get in?
We won't own a business whose growth is funded by issuing new shares rather than its own expanding margins and cash generation.
A company that needs external equity to grow is diluting you in order to do it. If the growth is real, it should show up in margins and in cash. This is the one screen we don't negotiate on, and it rules out businesses that look excellent on every other measure.
How a decision actually gets made.
All of it converges into one decision, and one person owns it.
Does the evidence hold up
against the same framework
as everything else?
Can the analyst defend it to
the room?
Does it beat what we already
own?
Portfolio Entry
The Fund Manager owns the risk · Conviction is built through execution, not assumed at entry
90% of our alpha comes from picking the right businesses, not from timing sector weights. Selection is how we generate return; allocation is how we protect it.
