Beating the index only as a byproduct
“We expect to beat the index handsomely over time, but only as a byproduct of our absolute return orientation.”
Business
Frequent reports may prove counterproductive
“Nomad’s orientation is genuinely long term, and more regular reports, daily, weekly, monthly or otherwise, are likely to be of little value to you, and may even be counterproductive for us.”
Three things sought in an investment
“When we evaluate potential investments, we are looking for businesses trading at around half of their real business value, companies run by owner-oriented management and employing capital allocation strategies consistent with long term shareholder wealth creation.”
Freedom to pass on misfits
“We can look far and wide for candidates and simply are not required to invest in anything that does not fit.”
Consolidation strengthens bargaining power with broadcasters
“International Speedway has grown through building and buying circuits throughout the south east and more recently elsewhere in the US. But the real prize from consolidation is that the firm has substantially improved its bargaining position with the broadcasting companies.”
Most professional investors look short term
“Cash flow growth will likely be cyclically subdued in the near term and investors with a short-term time horizon, which appears to us to be the majority of professional investors, will have little to excite them.”
No hurry to invest idle cash
“Whilst we are conscious that holding cash does not meet our long-term investment goals (to say little of earning our incentive fees) we are in no hurry to invest the money in companies that do not meet our criteria.”