Find and invest in great businesses
that can produce exceptional long-term return
What is the Problem?
Most professionals (> 90%) underperform the overall market*
This fact is true in the US, and true in other countries as well
Most people don’t have the time or expertise to figure out how to consistently invest in a profitable manner
Traditionally, professionals will tell you to diversify to reduce risk
What is the Solution?
We take a different approach:
Instead of diversify, we focus, we focus on finding a few great businesses with wide and deep moat, because we focus, we can build a deep understanding of the business itself
We invest in them when market price is significantly below their intrinsic value
…able to understand business economics and to find five to ten
What is Little Oak Capital?
The Vision
Our vision is to become a value investing firm with a community of people who are sticking to the value investing principle and driven to achieve excellence in their work
The Mission
Our mission is to find and invest in great businesses that can produce exceptional long-term returns
We aim to outperform the general market over the long-term.
We do not have short-term performance goal
Investment return will come as a result of:
- Realization of the difference between market price and intrinsic value
- Value creation from the growth of business itself.
What is the investment theory?
Great business
Find a few great companies
…If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing. you don’t even have to think about
Margin of safety
Buy a dollar for 50 cents
…You don’t try to buy businesses worth $83 million for $80 million. You leave yourself an enormous margin. When you build a bridge, you insist it can carry 30,000 pounds, but you only drive
Circle of competency
Know our circle of competency and only invest in businesses we can understand. Know what you know and what you don’t know is critical for making rational investment decisions
…You don’t have to be an expert on every
What are our core values?
Passion
Have belief: a belief in value investing, even when everybody else thinks it will not work
…I tap dance to work. I do business with people I like, respect and admire. (Buffett)
Focus
…focus investing – which implies ten holdings, not one hundred or four hundred. The idea that it is hard to find good investments, so concentrate in a few, seems to me to be an obvious idea. But 98% of the investment world does not think this way. (Munger)
Patience
…waiting for the fat pitch
The stock market is a no-called-strike game. You don’t have to swing at everything—you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, Swing, you bum！ (Buffett)
Rational
…Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands. By having confidence in their own analysis and judgment, they respond to market forces not with blind emotion but with calculated reason. (Klarman)
Discipline
- Stick to value investing principle
- Follow a checklist of
do and not do - Execute a pre-written investment plan to avoid being influenced by Mr. Market
What are the Investment Scenarios?
The ignored small companies
…The discarded, ignored, under the radar, misunderstood and esoteric – the exact place to find hidden gems. For those willing to dig deeper, get their hands dirty and search in places rarely trafficked by larger funds, the opportunities are endless. (Joe Greenblatt)
Examples: ATAI
The beaten-down big companies
Well-established businesses with proven business models
Negative events and media coverage cause their stock prices to fall significantly below their intrinsic value
The problem is temporary and can be resolved
The inherent business model and economic moat remain intact
Examples: Netflix, CMG