F E AT UR E D A RT ICL E
Discovering a Wealth Creator Portfolio
D
n BY MANEESH NATH
70
MicroCap Review Magazine
ue to the ongoing COVID-19 crisis, investors have nearly $5 trillion in money markets, surpassing the peak of the financial crisis, as they are wary of stocks. While building my investment framework two decades ago, I used to make sure that even if a major event like the dotcom bubble, the credit crisis, or the current health crisis takes place in the future it shouldn’t change my core investing principles and investment strategy. To see what has worked in the past, I went ahead and studied the past one hundred years of US business history. I also studied the investment process of legendary investors of the 20th Century. Then, I analyzed the characteristics of great companies that created shareholder’s value and the qualities of successful investors who did well for their investors over a considerable amount of time. After a lot of brainstorming, it was evident that a company which has shown remarkable growth in the past decade, which is run by a capable leader and is bought at a reasonable valuation has a good enough chance to become a wealth creator for the portfolio. So, if I can create a framework through which I can consistently come up with several wealth creators, the portfolio is going to compound at an above-average rate and will out-perform the market both on absolute and relative terms. The second part of the investing equation was to master the behavioral finance aspect. So, if using my framework, I spot a company which is going to be a wealth creator in the next decade, I then need to stick with it and
not let the markets decide my buy or sell decisions. So both of the above points tie-in together because if the investment process is robust enough to spot great companies then the subsequent portfolio out-performance will help to dampen the turbulence when the
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Renewable Energy Group Inc
OESX
Orion Energy Systems Inc
MHH
Mastech Digital Inc
MED
Medifast Inc.
FFXDF Fairfax India Holdings Corp RCM
R1 RCM INC
VCTR
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ELA
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VNDA Vanda Pharmaceuticals Inc GRVY
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STC
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VRTU
Virtusa Corp
MITK
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CNXN
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