Our Principles

An important pursuit

The firm’s
raison d’être

At Starvine, continuous improvement is the most important pursuit. The firm’s raison d’être is to achieve compounding for clients through research and stock selection. With compounding, wins and losses are cumulative over time; every action has a permanent consequence on the investment strategy’s track record. Therefore, learning from mistakes is as critical as being innovative in finding the next winning idea.

Long term
success and results

Starvine equates its success to the long term, absolute results delivered to clients rather than the firm’s ability to grow in size or profitability. While market fluctuations preclude the ability to predict one’s investment returns over any short time period, we can be consistent in how logic is applied to make decisions. Moreover, through truthful refection on past errors, we can identify the roots of our mistakes. In doing so, each future decision becomes a benefactor.

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Three Attributes
to Achieve Excellence
It is one’s core principles that provide constancy in an ever changing world that is filled with randomness. In order to achieve excellence, three attributes must be intertwined:

Independent Thinking

The markets are constantly charged with emotion. Investors who have the necessary know-how to do their own homework, and moreover are comfortable standing apart from the crowd, have a real edge in investing.

PASSION

To excel in any field, passion is a critical ingredient. Besides being passionate about studying quality companies – ideally trading at a discount to intrinsic value – an investor should enjoy the work so much that he strives to continually expand his knowledge and skills.

CLARITY

Passion for investing is critical, yet a system of decision making must be employed that emphasizes objectivity or the omission of emotion. Market fluctuations render quarter-to-quarter consistency difficult to achieve; however, one can still strive to be consistent in applying logic to decisions.

  • Continuous Improvement
    One is either moving forward or backward.

    If an investor is not continously learning, his knowledge will become obsolete. Principals remain constant, but technology and other disruptions can quickly change the validity of any investment analysis.

  • Patience
    A necessary ingredient.

    Patience is the glue that holds everything together in investing, especially for value investors. The willingness to commit to a situation with no clear prospect of a big payoff in the near term – so long as the conviction is based on sound logic and/or a favorable price – can be a competitive advantage in a world where most investors are short term in nature.

  • Pragmatism
    Balance ideals with practical thinking.

    Successful investing requires that one is committed to doing the right thing at the right time. That includes not hesitating to sell when prices rise above intrinsic value or when it is realised that a mistake has been made. It also means having sound risk controls that force accounts to be rebalanced when specified limits have been breached.

  • Value
    Price is what you pay, value is what you get

    True value investors have a deep conviction that price movements in themselves are not at all indicative of what a stock is worth. Each publicly traded stock represents a real company, the value of which is dependent on its earnings power and asset value. By buying stocks at a price below what is justified by the underlying company’s earnings power, one can hypothetically protect from true downside while creating potential for profit.

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