Value Investment Philosophy

Like the Boab tree, our corporate symbol, Clime aspires to adopt a very patient and value-based approach to investing. Our goal is to make the most of opportunities to profit when they arrive, and educate and position our clients so that they may survive the inevitable periods of less-than-ideal-conditions.

At Clime, we are acquirers of stakes in businesses, rather than traders in shares. We will only buy shares in outstanding businesses at discounts to our estimate of intrinsic value.

Our goal is to invest in a concentrated portfolio of businesses that can generate high rates of return on equity, are run by honest and capable management and can be purchased for fair prices. We are not interested in short-term gyrations in a share’s price. Instead, we concern ourselves with changes in the intrinsic value of companies. Unless sound investments can be made using our proprietary definitions for excellent businesses and wonderful value, we will continue to maintain large cash holdings.

We spend our time first understanding the drivers of a business’ economics and then estimating its value. Because price and value have no relationship, we ignore as inputs such items as price earnings ratio and weighted average cost of capital. We don’t bother estimating the value of every business listed on the Australian Securities Exchange - only those with wonderful economics, honest and capable management and bright prospects.

This patient and disciplined approach allows our clients to benefit from investments in businesses that are out of favour or facing setbacks of a temporary nature.

We firmly believe, over the long term, a company’s share price will ultimately be guided by its economic performance. We firmly hold the view that over short periods of time, price swings are largely random and neither support nor dispute our investment decisions. For this reason we do not panic over short-term price changes.

While our performance is ultimately compared by industry peers to the overall performance of the stock market, we are not interested in following it blindly, and are therefore best described as pure ‘stock-pickers’. We maintain a view that a consistent and disciplined strategy over long periods of time will provide superior returns for our clients.

Learn more about Clime’s range of managed investment services
Clime Education
Contact Clime