VADEVALOR SEARCH MANAGERS
IDENTIFYING THE BEST FUND MANAGERS
Vadevalor is an Independent Global Investment Research Company. Our goal is helping savers make better investment decisions. With our simple rating criteria, our focus at Vadevalor is on the long-term results of fund managers who have shown high levels of transparency and communication.
INDEPENDENT GLOBAL COMPANY
RATING THE BEST IN THE INDUSTRY
VALUE BASED CRITERIA
QUALITY RESEARCH & DISTRIBUTION
LONG TERM VISION
Consultancy Services for Asset Managers
We provide consultancy services for asset management firms and independent market research.
Distribution Services for Listed Firms
We provide independent distribution services for listed companies and support them to be better known in the market.
Basic Investing Concepts
Learn basic concepts that revolve around the stock market; developing a long-term thinking strategy.
At Vadevalor, we have invested time in preparing the ‘Key Concepts’ section, where you will find information on the stock market, value investing and much more explained in simple terms.
Know your Fund Managers
View detailed information about top performing fund managers and learn who have beaten the benchmark to add long-term value.
Astonishingly, when we started awarding our ratings in Spain, we realised that out of the 20 fund managers who achieved the best long-term returns, only 4 had funds with 5 star rating on other platforms. Vadevalor focuses on historical long-term results of each individual professional and not just on the returns of the current funds they manage.
Patiently teaching everyone, including those with no financial background, what should be simple concepts but come across as difficult in the industry due to complex financial jargon, hidden fees, etc. Subsequently, allowing money to flow to the best professionals in the industry.
VADEVALOR Principles on Successful Investing
Easy and Predictable Forecasting
Finding businesses which are easy to understand and predictable. An investor must focus on companies in which it is possible to make solid future forecast from observing the past and present.
Doing research to know the business inside out. Reading the public filings, talking to managers, customers and suppliers, reading analyst reports, company news and anything else useful. The process is easier if you are already a customer of the company.
Finding companies with competitive advantages. Competitive advantages allow a small number of firms to retain above-average levels of profitability for many years. Those companies offer a high return on capital. They have pricing power and a strong market position, which can be given by strong brands, lower cost of production, access to resources, superior production technology, patents, switching costs, network effects and so on.
Concrete Financial Profile
Finding companies with a solid financial profile. Debt magnifies financial results when things are going well, but excessive debt can cause a lot of trouble in periods of instability. That is why it is better to be conservative and avoid companies with too much debt
Value for Shareholders
The company management team must generate value for shareholders, have a good track record allocating capital and be honest. In many companies there are huge conflicts of interests between shareholders and management – investors should avoid those firms. There are usually less conflicts of interests in family companies or business with a strong long term investor.
Margin of Safety
Having a margin of safety. The difference between the market price and the estimate of value is the margin of safety. It is possible to compensate uncertainty by buying stocks only when they are trading for much less than the estimates of what they are worth. That will soften the effect of possible analysis mistakes or unforeseen future scenarios. Therefore, an investor not only needs a good company and a good management team, but also an attractive buying price. Great companies are only cheap when there is bad news about the company, its sector or the economy. It is important to understand how these factors are going to affect the future performance of the firm and take advantage of the situation if the market is overreacting to short term negative circumstances to invest for the long term.
This could be the most important principle and it is related to the previous principle. Never paying more than what you think the business would be worth in a very bad scenario.
Holding for Long Term
Trading frequently results in commissions and more taxes and expenses that could have been compounded. Also, your investment period should be at least longer than 5 years (ideally more) and you should only invest the money you know you are not going to need in that period.
Knowing When to Sell
There are four main reasons why an investor should consider selling their part of the company (shares): If they missed something when they first evaluated the company, if the fundamentals have deteriorated, if the price of the stock has increased above the intrinsic value or if there is a better investment possibility.
Short Term Decline
Being prepared to bear a big short term decline in the value of their investments in the short term. Those who could not bear it should NEVER invest in the stock market. Even if the analysis is right and the company performs the way investors expect, the market can panic in the short term and stocks can decline by more than 50% in a short period of time. Historically, that has happened in some occasions and will surely happen again. Investors should stick to their valuations and if they are right about the money which the business is going to generate, their long term returns will be as good as they expect, or even better if that allows them to buy more shares or if the company decides to do opportunistic acquisitions or buy back shares.
Co-founder Javier Ribas writes the foreward for the latest publication of Capital Returns, a book that we consider a must read for professional investors & business individuals.
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Vadevalor Foundation is a virtual space where we provide information about charities and support various efforts globally. In addition, we also distribute at least 20% of Vadevalor profits to the same.