NAFA Asset Managers

"Good" companies bought at "average" valuations, "average" companies at "bad" valuations, "bad" companies at "bankrupt" valuations create wealth. Error of omissions is deadlier than error of commissions, so the firm holds close to 40 stocks and embraces diversification. Balance sheet investing supersedes P&L investing when valuations are in favour. There are no minimum ROE/ROCE filters: a company lifting ROCE from 8% to 12% can outperform one slipping from 50% to 45%. Alpha creation need not come only from selecting winners; it is created by avoiding losers as well. No tactical cash calls are made on global or local macros, yet no strategy works forever, so the firm stays nimble-footed. Rigorous fundamental research is overlaid with a macro view and screened against the firm's quantitative framework (high growth, high ROCE, high cash-flow conversion, low leverage) and qualitative framework (corporate governance, promoter track record and promoter share pledges).