168 Equity Management Utilizes Weight-of-Evidence Approach.
168 Equity Management adopts a weight-of-evidence approach which combines the three holy trinity of investment approach: fundamental analysis, technical analysis and more recently flow analysis. Our belief is that convergence of conclusion from various investment styles will result in a higher probability of investment success. 168 Equity Management agrees with both Charlie Munger and Mohnish Pabrai’s statements that investment is a game of probability and various indicators pointing out to the same conclusion sums up to higher probability.
168 Equity Management believes that fundamental analysis is still credible from the point of view that expectation on future earnings may impact the movement of security prices, however making investment decision based on financial reports are folly as financial reports are subject to subjectivity of management due to agency problem and conflict of interest, and also subject to financial shenanigans.
Our foundation is still value investing. However, 168 Equity Management sees that valuation based on absolute value (intrinsic value) is subjective and sensitive on few parameters. Therefore, 168 shifts ‘value’ with combination on the perspective of technical analysis. We view that there are some areas that are ‘value’ to make purchases, hence the utilization of supply and demand zones within the concept of technical analysis. Furthermore, on crucial areas, Mr. Market will usually give out clues to further strengthen buy or sell decisions.
Flow analysis is utilized as fine tuning for 168 Equity Management. Pareto Principle (80/20 principle) holds true in many aspects in life including composition of security holders. Flow analysis is used to analyze the action of the ‘20% holding the 80%’, therefore our investment decision mirrors the action of those 20%, hence going with the flow. Understanding the real intention of the smart money may help navigate the vagaries of day-to-day price movement.
When most of these analyses point out to the same conclusion, it increases the degree of probability of investment success. This is the philosophy that 168 Equity Management adopts. Disclaimer that this method description is not intended as investment advice and following this philosophy may cause in investment loss and 168 Equity Management does not take any responsibilities in losses caused by following this weight-of-evidence investment approach.
168 Equity Management Utilizes Weight-of-Evidence Approach.
168 Equity Management adopts a weight-of-evidence approach which combines the three holy trinity of investment approach: fundamental analysis, technical analysis and more recently flow analysis. Our belief is that convergence of conclusion from various investment styles will result in a higher probability of investment success. 168 Equity Management agrees with both Charlie Munger and Mohnish Pabrai’s statements that investment is a game of probability and various indicators pointing out to the same conclusion sums up to higher probability.
168 Equity Management believes that fundamental analysis is still credible from the point of view that expectation on future earnings may impact the movement of security prices, however making investment decision based on financial reports are folly as financial reports are subject to subjectivity of management due to agency problem and conflict of interest, and also subject to financial shenanigans.
Our foundation is still value investing. However, 168 Equity Management sees that valuation based on absolute value (intrinsic value) is subjective and sensitive on few parameters. Therefore, 168 shifts ‘value’ with combination on the perspective of technical analysis. We view that there are some areas that are ‘value’ to make purchases, hence the utilization of supply and demand zones within the concept of technical analysis. Furthermore, on crucial areas, Mr. Market will usually give out clues to further strengthen buy or sell decisions.
Flow analysis is utilized as fine tuning for 168 Equity Management. Pareto Principle (80/20 principle) holds true in many aspects in life including composition of security holders. Flow analysis is used to analyze the action of the ‘20% holding the 80%’, therefore our investment decision mirrors the action of those 20%, hence going with the flow. Understanding the real intention of the smart money may help navigate the vagaries of day-to-day price movement.
When most of these analyses point out to the same conclusion, it increases the degree of probability of investment success. This is the philosophy that 168 Equity Management adopts. Disclaimer that this method description is not intended as investment advice and following this philosophy may cause in investment loss and 168 Equity Management does not take any responsibilities in losses caused by following this weight-of-evidence investment approach.