Investment Philosophy

Cheetah Capital Management Group’s value-oriented investment philosophy and approach differ from that of other hedge funds or private investment funds in the fundamental belief that it is possible to deliver superior returns to our partners/investors without employing significant leverage. We believe that delivering long-term market-beating performance can be done with less risk.

Value-oriented Investment Philosophy that Emphasizes Risk Management and Margin of Safety

Cheetah Capital has built an investment organization on risk-aversed, value-oriented asset picking on both the long and short sides across all asset-classes, rather than market timing and speculation, as the key to our success. Cheetah Capital Management Group (CCMG) adheres to value investing philosophy:

• We focus on business operating performance of individual companies, not on the general stock market movements and various economic predictions

• We always apply "Margin of Safety" on every capital allocation decision to minimize downside risks; Warren Buffett once said: "Rule No.1: Don't lose money. Rule No. 2: Don't forget rule No. 1."

• We are patient investor and believe that in the short term the market is psychologically driven but in the long term, it will reward great businesses or assets selling at discounted price.

• We are flexible in buying and selling our investments based on overvaluation and undervaluation; at some point either due to the size of market saturation, even a seemingly great high-growth business may generate very dismal stock performance for the next 10 years due to overvaluation.

• We avoid businesses in which managements only enrich themselves rather than their companies' shareholders (afterall, shareholders are the ultimate owners of the company). 

"An investment operation is one which upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative." ~ Benjamin Graham

Significant Focus on both Preservation and Growth of Capital

Prudent risk management and margin of safety are the cornerstone of our investment philosophy and process, and therefore our funds invest with a significant focus on both preservation of capital and growth of capital.

Cheetah Capital runs concentrated, long-biased hedge funds that emphasize both significant margin of safety and upside:

• We focus heavily on protecting our downside.

• We believe that taking significant positions in well-researched investment opportunities provides the best opportunity for outperforming the equity markets over time.

• Our short program is primarily used as prudent risk management tools to hedge the portfolio using individual securities, options, and ETFs.

• Our requirement for any investment is a minimum reward/risk ratio of 3:1, whereby the upside potential of an opportunity has to be at least three times what we determine to be the worst case scenario on the downside.

• Our value-oriented investment philosphy reflects in our fundamental approach and risk management focus.

• We only invest in situations we fully understand. We never buy just because something is "cheap" on an absolute or relative basis.

• We aim for long-term absolute outperformance vs. all major market indexes over the long-term.
  

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is." ~ Warren E. Buffett

Disclaimer:

The information, articles, writings, or documents posted online on the website (www.cheetahcapital.com) or offline (printed material) contains the past and/or current opinions of the author(s) but not necessarily those of the Cheetah Capital Management Group ("Cheetah Capital"). The author’s opinions are subject to change without notice. This article is distributed for educational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Cheetah Capital Management Group. To request persmission, please send us email at contactus@cheetahcapital.com and describe the request in detail. Cheetah Capital Management Group may or may not process or approve the request.

The material (published either online or offline (printed)) is intended solely for your general information. It is not intended as a recommendation and should not be construed as an offer to sell or the solicitation of an offer to buy any fund, hedge fund or security. Hedge funds are generally available only to specific classes of sophisticated investors who meet prescribed guidelines. Hedge funds are not suitable for all investors and the risks of hedge funds should be weighed against the potential rewards. This material is not intended to address every situation, nor is it intended as a substitute for the legal, accounting or financial counsel of your professional advisors with respect to your individual circumstances. Any entity referenced herein is solely for your information and does not constitute a recommendation or endorsement by Cheetah Capital Management Group. ©2010 Cheetah Capital Management LLC. All rights reserved.