Combining the experience and expertise of the co-founders in entrepreneurship and investing, the Company was founded on the principles that merge long-term business fundamentals with financial discipline. First and foremost, we view ourselves as a part owner of the businesses we invest in, not just a holder of an investment security. As an owner, we focus on the underlying business and its long-term value, not the market price at any given time. Our permanent capital gives us the holding power to withstand market volatility and the luxury to increase our investment when the prices drop in the short term. Short-term financial performances do not influence our investment decisions. We make a clear distinction between temporary losses and permanent losses. Temporary losses are tolerated, while permanent losses are avoided.

As a long-term business owner, we avoid using financial leverage and complex financial instruments to increase our return, and prefer to invest directly in common equities without any leverage. Adhering to the owner’s approach requires us to develop a high level of conviction in the long-term potentials of a company, which can only be achieved by thoroughly and rigorously analyzing the company, the industry and its long-term trends. Ideally, we look to invest in a business that has an attractive and scalable business model, is run by a capable and credible management, enjoys a significant moat against its competitors, and last but not least, is well positioned to take advantage of certain long-term fundamental shifts in economic and technological trends.

As a result of the owner’s approach and the conviction devoted to each investment, the Company maintains a concentrated portfolio. We aim to minimize risk by developing profound understanding of all the investments we make. From 2010 till now, the team has achieved compound annual return of close to 30%, far outperforming S&P500. We believe this is due to our strict adherence to the investment principles outlined above that enables us to select long-term winners and minimize impacts from short-term volatility. We cannot guarantee future returns, but we believe these principles will continue to guide us towards rational, consistent and successful investments.