Investing is key to growing capital (whether for savings or for securing retirement income). We do so by investing in stocks. The stockmarket provides us the opportunities to put capital into productive assets in Singapore and elsewhere. The value that we offer clients are :
Managing investment risk
Risk is highest when an investor overpays for an investment. This is unfortunately quite common. Market psychology favours stocks that have already done well and have become ‘popular’. It also makes it emotionally challenging to invest in stocks which have not done well. We make it a point to navigate through these psychological headwinds.
We minimize our investment risk by avoiding ‘popular’ stocks. Our focus is on finding value from areas of the market where we can underpay i.e. pay less for the asset than what its intrinsic worth should be. We then go beyond conventional wisdom to look for turning points that will change current perception. Not all investments will pan out the way we anticipate; but made at a low price, they are unlikely to be costly mistakes either.
Keeping cost low
We do not charge a management fee. Our fees come from a 20% profit sharing arrangement with clients that is calculated annually, subject to a hurdle rate and a high water mark. Just as we take a long-term view of our investments, we also take a long-term view with our clients. We only get paid after our clients have made a return on their capital.
Clients do not bear the set-up and running costs of a fund, each have their own separately managed account.
Pathfinder also keeps its overheads low with a lean cost structure. We have a functional office that is conducive for what we do, which is reading and thinking.
Skin in the game
We believe investment managers should have ‘skin in the game.’ Our capital is also invested in any investment that we make for you.