CHAKARA SISOWATH, chief investment officer at Comgest - a boutique, research-based institutional fund manager - believes in taking time over investment decisions. He says Comgest typically waits for between six and 18 months to buy a stock, once a company has been identified as an attractive target.
'We wait to see if our assumptions about the company are correct. Sometimes we might miss the first 20-50 per cent of the stock price rise, but we are very-long-term investors. If our assumptions and our scenario is correct - and if indeed the company can grow its earnings by 15 per cent every year - you can miss the first 30 per cent and you will get good performance anyway.'
From Hong Kong, Comgest invests throughout Asia, including Japan. The firm has assets under management of about US$2.3 billion, of which about 40 per cent is managed in Hong Kong and the remainder in Europe.
It picks stocks based on a five-year forecast of earnings and dividends. Unlike many other fund managers, Comgest generally shuns cyclical stocks, including property conglomerates, and avoids most of the financial sector. This is because of the difficulty it sees in forecasting the operating environment for banks and other financial companies.
Illustrating this investment philosophy of sticking to the predictable, Comgest has Cafe de Coral in its Hong Kong stock portfolio, but not Cathay Pacific. Mr Sisowath says the fast-food chain has shown its talent in meeting customer tastes and sourcing low-cost products, while airlines, however well managed, operate in an uncertain market.
Comgest has earned a reputation as a defensive investment house, according to Mr Sisowath. 'We want to control risk. We want to be really cautious investors, very defensive. So we want to be sure that a company we invest in delivers what it promises. In Asia there are a lot of companies promising to do a lot of things and there has been pretty poor execution. Sometimes it is because of poor markets, but sometimes they never had any intention of doing what they said. I think time is a good filter. That is why we never make fast investment decisions.'
