Buy great businesses
We invest in companies with successful record of capital allocation (average age of the portfolio is 40 years+) with durable “moats.”
We focus exclusively on high ROCE which dramatically reduces the pool of possible companies to follow.
Apply a devil’s advocate approach
Hill Fort's investment process includes a Devil's Advocate approach. For every high-priority idea, one analyst would become a ‘Pro’ and another would become the ‘Con’.
The con analyst challenges assumptions to avoid rationalizing concerns as ‘noise,’ ensuring rigorous reviews and guarding against blind spots.
Stay focussed
We have a single-minded focus on one approach. We believe that owning 15-20 businesses in the strategy at any given point in time allows for great time and energy to be devoted to a limited set of opportunities.
Every new idea must fight for its spot in the portfolio.
What We Don’t Do
Work is usually defined as “doing something” and for investment firms, this usually equates to trading. We are however convinced that trading detracts value from performance over the long term and therefore fight hard to not get swayed by market sentiment.
We have learnt that cheap businesses in India are cheap for a reason; they are usually bad businesses. They either have a broken business model or shady corporate governance standards or poor execution capabilities. We are therefore willing to pay fair prices for our businesses. Our starting point for evaluating new investment ideas is not whether it is a great price but instead if it is a great business.
Over the years, we have come to appreciate our inability to forecast what Mr. Market is going to do. We therefore don’t play “Stock Market” in our portfolio and tend to stay fully invested. Our average cash position over any long period of time is expected to be less than 5%.