Investment Strategy & Methodology
At Maxima, our approach to investing is based on innovation, conviction and discipline. We are convinced that long-term wealth accumulation and preservation can best be attained using a blend of attractive valuations and thorough assessment of the potential areas of growth.
Our long term fundamental investing approach demands deep diligence, fundamental research and an independent analysis of the investment opportunities. Determined to achieve long-term goals, we recognise that short-term price fluctuations do not always reflect an asset’s value, which is why our investment strategy is based on the conviction that markets are inefficient in the short term. We see volatility as an opportunity to capitalize on mispricing through our structured investment process.
Our quality checks include profitability, earnings stability, low debt and efficient use of assets. The objective is to produce attractive risk-adjusted long-term returns investing in understandable assets whose return generating capacities are mispriced. Great importance is placed on assessing risks and in-depth research is used to gain detailed insight into the assets invested in.
- Global Macro Economic overview
- Top down approach on geographies and sectors
- Asset Class identification and prospects analysis
- Initial screening to identify investible universe
- Identification of potential areas of growth
- Integration of technical and fundamental analysis to obtain conviction
- Analyze growth inflections and probabilities thereof
- Analyze probable departure from expected growth and apply score on magnitude and duration of departure
- Relative valuation assessment (industry, peers and historical multiples)
- Sensitivity and Exposure Analysis:
- Fundamental outlook change
- Political landscape change
- Technical signal change
- Risk analysis inclusion
- Reference to initial statement of investment principles
- Return impact of inclusion of investment idea in client portfolio (alpha generating capabilities)
- Risk impact on client portfolio
- Impact on diversification goals
- Impact on portfolio volatility
- Final inclusion or rejection