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Investment Philosophy
Cheetah Capital Management Group’s value-oriented investment philosophy and approach differ from that of other hedge funds in the fundamental belief that it is possible to deliver superior returns to our investors without employing significant leverage. We believe that delivering long-term market-beating performance can be done with less risk. 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
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.
Prudent risk management & margin of safety are the cornerstone of our investment process, and therefore our funds invest with a significant focus on preservation of capital.
"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is." ~ Warren E. Buffett
